Following the publication of Shangyin Society's article "The Chinese Yogurt War," extensive reader discussions were sparked, with many readers expressing that a small cup of yogurt contains so many invisible "tricks."
Some friends familiar with the yogurt industry also joined the discussion—including practitioners from traditional dairy brands, operators of emerging yogurt brands, pioneers of niche yogurt brands, researchers who have followed the dairy industry for years, and seasoned "yogurt enthusiasts" who know every brand intimately.
Through broader and deeper understanding, we realized that the yogurt industry still has many "truths" unknown to ordinary consumers. Calling them truths is not because they are shocking or alarming, but because they are common industry knowledge rarely reported by the media or systematically analyzed together, causing us to overlook the complexity within simplicity and the essence within complexity.
We spent over a month extracting more valuable information from more than a dozen yogurt industry practitioners, which we have analyzed and compiled into this article.
This article will tell you why milk sources are the "lifeline" for many dairy companies, why bacterial strains can be seen as the "chip" of the yogurt industry, and how foreign capital has quietly infiltrated China's dairy supply chain.
New Brands Take Center Stage, But the "Twin Stars" Still Lead by Far
According to the "2021 Yogurt Consumption Trend Report," among dairy products consumers preferred to buy in 2021, yogurt ranked second with 85%, just behind fresh milk at 86%.
Notably, on the supply side, the number of yogurt products online in 2021 far exceeded fresh milk and milk beverages, with consumption scale growing by 90% over two years.
As more emerging yogurt brands like Jane, Le Pure, Classy·K, Beihai Pasture, and Wudao enter our view, many consumers also notice that in the low-temperature yogurt sections of Hema, convenience stores, and some large supermarkets, traditional brands like Mengniu and Yili seem to be tucked away in inconspicuous corners, with center stage firmly occupied by new brands.
Thus, many people wonder: Do the dairy "twin stars" Mengniu and Yili have a low presence in the low-temperature yogurt segment?
In the face of sales data, this question seems not to hold.
In 2021, the domestic low-temperature yogurt market sold a total of 50 billion yuan. Mengniu achieved sales of 7.851 billion yuan, and Yili 7.573 billion yuan. Third-ranked Junlebao was nearly halved, with only 4.823 billion yuan.
The twin stars may seem to have low visibility, but they win with long product lines—Mengniu has Guanyiru, Chunshen, and Telunsu; Yili has more, including Changqing, Xinquduo, Pariti, Cheesepoint, Yixiao, QQ Star, and Big Fruit Granules—claiming to cover low-end, mid-range, mid-to-high-end, high-end, and so-called "ultra-high-end markets."
However, the problem is that their products targeting high-end and ultra-high-end markets are not on the same level as those of new brands; the twin stars do not even have high-protein low-temperature yogurt products similar to pure raw milk.
This does not prevent the twin stars from relying solely on scale advantages to lead far ahead in this track they disdain to enter.
The reason is simple: this is a too insignificant niche market. The total sales of low-temperature yogurt nationwide in 2021 were 50 billion yuan, which sounds impressive but only accounts for 1/2 of Yili's annual revenue and 2/3 of Mengniu's annual revenue.
Currently, the low-temperature yogurt market is mainly dominated by products retailing below 3 yuan, with the entire consumption band at a relatively low level. Relying on products like the 3-yuan eight-cup pack, Mengniu and Yili have crushed new brands in revenue.
On the other hand, this alley that giants have no time for leaves room for new brands and small enterprises to survive.
Many new dairy companies are taking the OEM route—first creating a brand, then finding suitable large factories for contract manufacturing. As Li Zhengyun, vice president of Qingtong Capital, said:
"The yogurt industry chain is very mature; brand owners do not need to own pastures or processing plants. With mature supply chain and industry chain support, startups can easily enter this business. But for startups, they can only go for high-end yogurt, as high unit prices are needed to cover costs. "
Others are transformations of local leading dairy enterprises. With their own pastures and factories, these transformed new dairy forces have a slight advantage in product strength and cost control.
High-end low-temperature yogurt is an industry with high entry barriers. In this niche track, big brands may not necessarily do well, and small brands may not necessarily do poorly.
How difficult is high-end low-temperature yogurt?
If only differentiating by flavor, that would be fine, but if pursuing functionality, there are at least two major mountains in the long R&D journey—milk sources and bacterial strains.
The "Lifeline" of the Dairy Industry: Milk Sources
Let's start with milk sources.
High-quality raw milk resources upstream are extremely scarce, which is a critical lifeline across the entire dairy industry.
In the collective memory of Chinese people, 2008 is a particularly special year, not only for the pride of the Olympics but also for the lingering pain of the melamine incident, whose long-tail effects in the industry continue to this day.
After the melamine incident, consumers instinctively became wary of domestic dairy products, and imported dairy brands seized the window period to dominate the domestic market and reap huge profits.
In fact, after 2008, domestic pastures, having learned from the pain, began a large-scale transformation. To this day, the proportion of large-scale pastures exceeds 90%. Raising cattle has evolved from individual smallholder behavior to scientifically managed corporate behavior.
In the era of smallholder individual workshops, dairy farmers could only increase income by cutting corners in various ways, such as feeding cattle less forage or adding water to milk. After the transformation to large-scale pastures, the direction of profit shifted to healthy competition.
Healthy competition is not profound; the logic for high milk production is simply two aspects: creating a comfortable environment and continuous genetic selection and iteration.
A comfortable environment is reflected in details such as temperature regulation and manure treatment. Modern pastures are like "postpartum care centers," prioritizing the health of dairy cows.
One important indicator of cow health is called "somatic cell count." When a cow's udder is injured or diseased, the immune system secretes a large number of white blood cells to clear the infection, causing the somatic cell count to rise sharply, milk production to decline, and the quality and flavor of raw milk to be affected.
With specific testing standards, scientific breeding can enter assembly-line management.
Consumers' romantic imagination of modern domestic pastures mostly stays in the beautiful scenes shown in TV ads—blue sky, green land, cattle and sheep strolling, natural pastures. In reality, grazing on the prairie is the model of the UK and New Zealand, while domestic practices follow the US and Israel model—centralized confinement management.
Under centralized confinement, cows are divided into different pens based on their physique and breeding cycle, fed with different ingredients and ratios of feed to achieve the most efficient output.
The process is roughly as follows:
Cows in the breeding period are in one pen, those in the perinatal period in another; after calving, calves are placed in one pen, and mother cows, being weak after birth, need extra antibiotics and cannot be milked together, so they are placed in another pen for separate feeding;
After a few days, as the postpartum cows gradually recover, once all indicators return to normal, they are first transferred to a low-production pen, and after recovering to a daily output of 30 kg, they are transferred to a high-production pen. Low and high production are cyclical, requiring constant monitoring and timely transfer;
One month after calving, the cow is artificially inseminated again and enters the breeding pen, still producing milk;
After seven months, artificial intervention stops milking for fetal development, and the cow is sent to the perinatal pen again, continuing the cycle.
It may sound like there's no "cow rights," but the results are obvious.
In the late 1990s, individual farming produced only 10 to 20-plus kilograms of milk per cow per day, with low indicators—protein content hovering between 2.8g and 2.9g per 100g. Now it has doubled, with daily output reaching over 40 kg, and some even reaching 45 kg. Protein content can reach at least 3.2g or 3.3g, with high levels at 3.4g, 3.5g, or above.
Now for genetic selection, which involves both cows and bulls.
In the animal world, reproduction is the primary productive force, and males are far less valuable than females. Sex control in pastures is a necessity, with the proportion of cows controlled above 90%.
Among this 90%, further scientific genetic selection is carried out.
For example, Pasture A purchases 1,000 cows. After observing their milk production over a year, it finds that under the same conditions, 300 are particularly high-yielding, 300 are normal, and 100 are particularly low-yielding. The top 300 high-yielding cows become the focus of genetic selection, bred with high-quality bulls to produce more offspring.
Genetic selection is not a one-day effort but a long-term endeavor. Through generations of iteration, by the third or fourth generation, the entire pasture's milk production will see a qualitative leap. This is only the system for cows.
Cows alone cannot constitute the necessary elements for reproduction, and keeping bulls that provide intermittent one-time help is an extra expense, so bull frozen semen technology was naturally introduced. Bull frozen semen has been selected and researched abroad for many years, with a very mature industry, while domestic development is still in its infancy, relying on imported frozen semen.
When mentioning dairy cows, people's first impression is the black-and-white spotted breed, which is the earliest origin of dairy cows—the Holstein, bred in the Netherlands for milk production, with a history of over a hundred years and a deeply ingrained image. Subsequently, countries around the world introduced and improved them, conducting further breeding and reproduction according to their own national conditions and industrial needs.
For example, New Zealand and Australia, both major dairy countries, have cows with their own strengths.
New Zealand cows, through generations of optimization, have evolved into a breed with small body size, relatively low milk yield but rich milk quality, with significantly higher milk fat and protein content than ordinary cows.
How low is the milk yield of New Zealand cows? Only 27-28 kg per day.
This serves New Zealand's special national conditions: with a total population of just over 5 million, domestic direct consumption of raw milk is very limited, but the demand for exported milk powder, cheese, and other refined dairy products is huge.
For these industrial products, the water in milk is the least valuable, while nutritional components are the real necessity. "High nutrition, ultra-concentration" is also why New Zealand milk powder has long been favored by domestic parents.
Australia is completely different, with a population of 25.7 million, whose remainder exceeds New Zealand's total, so domestic demand for milk is high. Thus, Australian cows are characterized by large size, high feed intake, and high milk yield, contributing to direct economic benefits.
As people's health awareness continues to strengthen, the pursuit of nutritional components is becoming mainstream.
After the large-scale transformation of domestic pastures, the raw milk produced can now match foreign standards in various indicators.
For example, Jersey cows raised on some domestic high-end pastures produce raw milk with superior dry matter, milk fat, and protein content compared to Holstein cows, inheriting the characteristics of New Zealand cows, with protein content as high as 3.8%, far exceeding the 3% of Holstein cows.
The "Yogurt War" Starts at the Source
From pasture to factory, fresh milk undergoes very strict standards at every step, racing against time, which naturally raises costs.
One way to significantly reduce yogurt costs is to use milk powder, also broadly known as "milk powder."
"In our industry, we used to use milk powder only when there was a milk shortage," revealed D, a former quality inspector at a leading dairy brand.
Reconstituted milk made from milk powder is one of the relatively inferior raw materials for yogurt. The eight-cup pack, as a low-end product, is cheap for a reason—it's all reconstituted milk with a long list of additives, essentially just a flavored beverage.
Common sense agrees that the fewer processing steps food undergoes, the better it retains its original flavor and nutrition. Milk powder is the product of multiple processing steps from raw milk, and when reconstituted with water, it compresses costs, sacrifices nutrition, and buys time.
Practitioners like D refer to imported milk powder as "bulk powder," and in her experience, bulk powder is relatively cheap. According to data from the General Administration of Customs, in 2020, the ratio of imported bulk powder to domestically produced raw milk was 40:60.
Imported milk powder is cheaper than domestic brands. This is a fact that surprises many who have never been mothers. Most importantly, the protein and other indicators of bulk powder generally just meet the minimum standards.
For example, if foreign standards require 24g of protein per 100g of milk powder, then bulk powder will meet the standard, but just barely, never significantly higher. Domestic milk powder indicators, on the other hand, are generally higher.
D has many friends in Shenzhen, Guangdong, who, once bitten, twice shy, and due to geographical advantages, always choose foreign milk powder brands for their children.
When D moved to a third-party testing agency, friends sent their purchased foreign brand milk powder for testing, and the results were almost identical to domestic milk powder. Sometimes, from a visual perspective, there were even clumping issues rarely seen in domestic brands.
This is just milk powder; making yogurt from milk powder requires reconstitution with water. In normal raw milk, the more dry matter the better, typically 12% to 14%, but reconstituted milk is only adjusted to 12%.
In the past, yogurt was defined as a beverage, and only pursuing taste and flavor could create hit products and build a product matrix, which could be satisfied with reconstituted milk or ordinary raw milk;
Today, high-end yogurt has ingredients close to fresh milk, with minimal processing and additives, combining health and functionality. To this end, yogurt companies need to seize the advantage at the source, putting great effort into the supply chain that was previously only emphasized by fresh milk brands.
Large dairy companies have strong financial resources and their own milk sources. Here, milk sources do not entirely mean direct pastures, but rather contracts with many dairy farmers, first ensuring supply for their own high-end flagship products.
Milk production in China follows a pattern of more in winter and less in summer. This is related to the living environment of dairy cows, which are cold-resistant but not heat-tolerant, with an optimal temperature of 12°C–14°C. Excessive heat causes heat stress reactions in cows, severely affecting milk production, and this is a nationwide decline.
The relatively milk-scarce summer is the peak sales season for low-temperature dairy products, while the milk-abundant winter is the off-season. To cope with this anti-human dairy cycle, foreign dairy brands generally adopt a model of growing together with pastures. In China, however, it's a different scenario, with dairy farmers and dairy brands often cooperating in confrontation.
Government regulation of reconstituted milk is becoming increasingly strict, and trade uncertainties mean that future upstream raw milk supply will mainly rely on domestic sources. High-quality raw milk is the cornerstone of product upgrades.
Even so, dairy farmers have remained at a relative disadvantage in years of transactions. Paradoxically, this disadvantage does not diminish with the scale of the pasture; rather, the larger the pasture, the lower the bargaining power.
Because traditional dairy giants like Mengniu and Yili have already occupied a very high position in the domestic dairy market, other dairy companies are just small players, and there are no other factories that can process 300-400 tons of raw milk daily. Even local leading dairy enterprises have a limit of just over 100 tons per day.
Traditional dairy giants generally have their own pastures. For example, after a series of acquisitions and mergers, Mengniu and Yili's large-scale pasture share exceeds 40%, but this is far from meeting the huge domestic market demand. Therefore, both actively and passively, most small-scale pastures or dairy farmers choose to rely closely on the dairy giants for survival.
Of course, they could also choose to supply local dairy companies other than Mengniu and Yili. In this case, besides being unstable and having unpredictable revenue risks, they might occasionally land big orders during the off-season.
For example, southern dairy brands like Guangdong Classy·K, Fujian Changfu, Guangdong Yantang, Guangxi Huangshi, and Hong Kong Vitasoy, because the local climate is not suitable for raising cattle, often need to purchase milk from the north at high prices. Including freight, there can be a 1.5 times or more premium. Often, these dairy brands can generously prepay millions in cash, saving dairy farmers the pain of year-end debt collection.
But nothing is perfect. In 2019, Kedi Dairy owed huge milk payments for up to 19 months, which still troubles many dairy farmers and leaves them with lingering fear. After all, dairy farming is a capital-intensive industry, and the large amount of feed consumed daily by cows is a high fixed cost.
Moreover, the freight for "north milk to south supply" ultimately comes out of the consumer's pocket. From the consumer's perspective, it's naturally more cost-effective to choose dairy brands located in the north.
So, all in all, such favorable opportunities are generally unstable, and dairy farmers remain in a very passive position overall.
Fonterra is New Zealand's largest enterprise, contributing annually to the New Zealand economy an amount equivalent to one-tenth of its GDP, undoubtedly a pillar industry. Yet even this company, after investing in pastures in China, found that farming costs far exceeded those in its home country.
"What we produce in China is the most expensive milk in the world," Fonterra once publicly stated. Under continuous losses, at the end of 2020, Fonterra decisively abandoned its unprofitable business in China, selling its self-owned pastures in China to Yili and Sanyuan for a total price of about 2.5 billion yuan, focusing its efforts on profitable sectors.
Even Fonterra can't make money raising cattle in China, let alone ordinary pastures and dairy farmers?
Many dairy farmers are disheartened: "Raising dairy cows has no future; you can't make money, just working for big dairy companies for a lifetime."
The "Chip" of the Yogurt Industry—Bacterial Strains
Next, let's talk about bacterial strains.
Fresh milk does not require high R&D; securing a good milk source upstream is half the battle, and with cold chain infrastructure support, it's basically done. But yogurt is another matter. In this field, what is compared to the importance of chips is the bacterial strains in yogurt.
Yin Ye, CEO of BGI, attracted countless fans with his brilliant remarks on genetic diversity in the fifth season of "Round Table Talk." In the 70 minutes full of quotable lines, Yin Ye mentioned several times the importance of microbiota in human inheritance—a social person inherits not only bloodline but also cultural and microbial lineage. While breastfeeding, a large number of microbiota are passed to the next generation.
Besides inheritance, dietary habits also directly affect the microbiota in the human body.
Some have said, "If Denmark, Sweden, France, and the US stopped exporting fermentation cultures and probiotics, domestic consumers might not even be able to drink a cup of yogurt. " This may be an exaggeration, but domestic dairy companies do lack bacteria.
Saying "lack bacteria" may not be accurate; what we truly lack are strains with independent intellectual property rights.
Domestic dairy companies basically use probiotics as a selling point. For example, Mengniu's Guanyiru uses the flagship strain BB-12 from Denmark's Chr. Hansen, and Jane's LGG probiotic naked yogurt also uses LGG from Chr. Hansen.
Yili did develop a probiotic with independent intellectual property rights in 2020—Bifidobacterium lactis BL-99. But this is its only achievement in strain research after years of sitting firmly in the top 5 of global dairy groups.
This situation may be understood from an insider's perspective.
Y worked as a product manager at Yili for nearly two years, specializing in functional strain screening. Before that, he studied at China Agricultural University and Nanyang Technological University in Singapore, and after returning to China, he worked as an associate researcher at the Shanghai Advanced Research Institute of the Chinese Academy of Sciences. Then, with great enthusiasm, he went to Yili, but after only a year and a half, Y left disheartened.
Because he found that strain R&D is not the top priority for Yili's current development, and the same applies to Mengniu and many other dairy companies. For many dairy companies, especially the giants, expanding scale and occupying more lower-tier markets is the urgent task.
Jiangnan University, which supports half of the domestic new consumer brands, is one of the institutions with the most thorough research on microbiota and fermentation in China.
The probiotics laboratory at Jiangnan University independently developed Lactobacillus plantarum CCMF8610, which can scavenge reactive oxygen species induced by cadmium exposure, regulate immune responses in HT-29 cells, inhibit apoptosis, and protect cell activity, thereby alleviating cadmium-induced cytotoxicity. It has received widespread acclaim both domestically and internationally.
In 2018, Lactobacillus plantarum CCMF8610 was launched on the market, and in cooperation with a traditional dairy company, a fermented milk product called "Gold Digger" was introduced.
The name "Gold Digger" is somewhat obscure, but it subtly implies flushing out heavy metal residues from the body, as such suggestive advertising is strictly prohibited in China.
Logically, appropriate brand promotion has a positive effect of educating the market. For example, a recent milk powder ad mentioned containing active nutrients RRR and GOS.
Without reading the product details page, over 90% of consumers would not know what RRR and GOS are, far less well-known than DHA. But many target audiences still pay for it, following the simplest logic—what the brand specifically highlights must be good.
However, it cannot be ignored that many brands exaggerate or falsify their claims.
In 2010, Danone was targeted by the government for advertising that its yogurt could prevent colds and aid digestion, ultimately paying $21 million in fines and pulling the ads.
In October 2021, Blueglass yogurt's affiliated company, Beijing Yuehuo Catering Management Co., Ltd., was fined 60,000 yuan by the Chaoyang District Market Supervision Administration for violating Article 28, Paragraph 2, Item (4) of the Advertising Law, which prohibits "fabricating the effects of using goods or receiving services in false advertising."
By the end of October 2021, promotional phrases on Blueglass yogurt's WeChat mini-program such as "super antioxidant effect," "enhance immunity," "beauty and skincare," and "delay aging" had been removed. However, in subsequent promotions, suggestive language like "double collagen brings a hydrated and bouncy skin experience" could still be seen.
After witnessing the "money power" of new consumer brands in creating concepts and aggressively promoting them, to ensure the normal and rational development of the market, the state's regulation of brand promotion must not relax even a little.
Reflected in the market, some brands have become more cautious. For example, a niche yogurt brand focusing on functionality has a yogurt containing a certain Lactobacillus plantarum strain with fat-lowering properties, but considering regulation, the brand only slightly emphasized this in naming the product, without excessive mention.
Its founder W said that besides R&D and sales, educating the market and users is an important but easily overlooked task. Brand promotion is important, but it must also comply with national regulatory requirements.
This process is very slow, but after direct communication with many users, he was pleased to find that some people's awareness of bacterial strains is increasing, and demand in this area is growing.
W also mentioned that Japanese yogurt brands Meiji and Morinaga are masters in bacterial strains. This is partly due to Japanese dietary habits and partly because Japanese consumers have a broad awareness of functional yogurt, allowing each strain to be marketed as a separate yogurt product, with the strain's function as the selling point.
For example, Meiji's LG21 yogurt is named after the developed LG21 probiotic, which has the effect of inhibiting the growth of Helicobacter pylori in the body.
Morinaga's Bifidobacterium longum BB536, developed in 1969, is one of the most thoroughly studied probiotic strains in the world, with over 50 years of research. It mainly aids intestinal regulation, has no side effects with long-term use, and is used in various foods.
This has led to a relatively low incidence of Helicobacter pylori in Japan, at only around 20%. In contrast, the average infection rate in China is as high as 59%, and most people are completely unaware.
It was only before 2022 that Chinese people began to learn about "Helicobacter pylori" on a large scale, because the US listed it as a clear carcinogen, and media reports led to a rush on detection kits, which sold out on shopping websites.
In fact, it is difficult to quantify the specific effects of probiotics in yogurt. Except for relatively obvious effects on intestinal function, many functional strains are hard for consumers to see tangible results, leading to accusations of "IQ tax."
A report analyzing 41 mainstream products found that 80.1% (33 products) had bacterial content below 10 billion; 13 products did not indicate bacterial content; 36.6% (15 products) contained only fermentation cultures, not probiotics; and 14 products contained only 1-2 probiotic strains.
The R&D cycle for probiotics is long, and most are monopolized by foreign companies. Domestic dairy companies face high procurement costs, and whether they can get enough quantity is basically a matter of luck.
From the perspective of industry insider K, except for vertical brands specializing in functional yogurt, the probiotics claimed to be added in most yogurts are just marketing gimmicks.
In the previous article "The Chinese Yogurt War," it was mentioned that when Mia used finished yogurt as a starter to ferment yogurt at home, she found that Jane's yogurt fermented the thinnest, but its taste was the best. From this, she speculated that Jane sacrificed the fermentation degree or activity of the strains for taste.
Many brands, to prevent probiotics from continuing to ferment and affect taste after leaving the factory, will re-sterilize the fermented yogurt, euphemistically called "passivation," which actually partially kills the active probiotics in the yogurt.
Additionally, an easily overlooked point is that the optimal state for probiotics is actually freeze-dried. Other forms of strains may have viability concerns during improper disinfection and long-distance transportation.
Although there is considerable research supporting the probiotic functions of dead bacteria, the metabolites of dead bacteria are called "postbiotics," and some strains, after sterilization, enter the intestine with live bacteria, showing no significant difference in function. But overall, global research on probiotics is still quite limited, and there is a huge gap between scientific achievements and actual market application.
A few strains are lucky, such as LG21 and BB536, which have been thoroughly researched and applied thanks to the strong support of Morinaga and Meiji. In China, the only giants comparable to Morinaga and Meiji are Mengniu and Yili, but both are relatively lax in strain R&D.
An Industry Heavily Penetrated by Foreign Products and Equipment
Beyond the scarcity of strains with independent intellectual property rights, what makes K even more sigh is that "the entire domestic dairy industry is monopolized by 'foreign capital.'"
This may sound confusing at first—China has large pastures and many strong dairy companies, so it seems unrelated to foreign monopoly. But the facts are right there.
Let's start with the pasture side.
From breeding, the aforementioned Jersey cow is currently a top dairy breed in China, but it is not independently developed domestically; it is an imported breed from Jersey Island in the English Channel, a precious breed protected by British government decree. Other breeds are imported from New Zealand and Australia. Frozen semen is also necessarily imported, from the US, Canada, Israel, etc.
Farming is the same.
If forage is only from Xinjiang or Zhangbei, the quality is insufficient; good forage must be imported from US Stanley or ACX alfalfa, combined with Australian oat grass.
Corn silage (preserving immature corn stalks through special processing for use as livestock feed in autumn and winter) can use domestic corn, but the machinery for making corn silage is best from Germany's CLAAS, and the film for sealing and protecting corn silage from haze is best from US DuPont.
With various forages, rationing is needed. TMR feed mixers from brands like Dutch Tulip, Dutch Trioliet, and German Schneeberg are favored for their stability, and dairy farmers love them.
For the healthy growth of cows, in addition to feed, veterinary drugs and trace elements are needed, and imported products are relatively better. There are also good domestic products, but they are more for health care, such as cleaning the cow's body and wiping the udder.
In milking equipment, including digital detection devices like pedometers for cows, most are imported from Germany, the US, and Israel, and the annual software licensing fees account for a significant portion of pasture construction costs, especially for large pastures housing thousands to tens of thousands of cows, which cannot be avoided.
Now for the factory side.
The filling machines used by dairy companies, except for a few from Central Asian brands, are mostly imported for high speed, stability, and sterility. Factory production lines and wastewater treatment equipment are also imported, as are fermentation cultures and probiotics, and even good fruit jams are mostly imported.
This has led to the awkward situation of "Chinese shell, foreign core"—the cows are imported, the feed is imported, the milking equipment is imported, and the milk processing lines are imported. Therefore, the cost of domestic milk production is very high, and it's not an exaggeration to call it "chokepoint."
Conclusion
In China, the dairy industry is a full-chain industry spanning the primary, secondary, and tertiary sectors.
From the continuous optimization and iteration of pasture farming, to the upgrade of factory assembly lines, to the R&D and innovation of bacterial strains, all aspects are interconnected and crucial to the quality of yogurt.
Currently, China's low-temperature yogurt market has reached a scale of 50 billion yuan and is in a rapid growth phase, but from the understanding of the entire industry chain, there are still significant problems.
The key to solving these problems is still R&D investment. Only through dairy technology upgrades can we bring more and better possibilities, such as helping more people understand the mysterious role of microbiota in the human body, thereby pursuing a healthier life.
But for now, R&D remains a shortcoming for many dairy companies. Even the giants have R&D expenses accounting for less than 1% of revenue, and R&D personnel account for less than 1% of total employees.
In the yogurt field, what many emerging brands need to do is perhaps to position themselves with clear differentiation, be sufficiently focused, specialized, and "small but beautiful"; while strong large enterprises may need to take the lead in finding more technological support points for China's dairy industry, mastering some core technologies, and while improving themselves, also empowering the entire industry chain, so that consumers can buy truly good products without spending so much money.
Source: Shangyin Society (ID: shangyinshecj)
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