China to drive growth for the global cheese trade, according to new report

Date: 29.01.2024Source: Rabobank

According to a recent Rabobank report, between 2012 and 2022 Chinese cheese demand grew almost 200,000 metric tons. The report anticipates further growth at a 9.1% compound annual growth rate (CAGR) from 2023 to 2030, with total cheese demand reaching 495,000 metric tons in 2030. As the domestic supply cannot satisfy increasing local cheese consumption, global cheese traders will have plenty of opportunities in the coming years to capture this rising demand.

Said Michelle Huang, Dairy Analyst, Rabobank: “Low per capita consumption, expansion of quick-service restaurants, bakeries, and tea shops, and product innovation provide a platform for a gradual increase in Chinese cheese demand.”

China’s annual per capita cheese consumption is only 0.2kg, much lower than neighbouring Asian countries like Japan (2.5kg) and South Korea (3.7kg). With an estimated 9.1% annual volume growth, cheese consumption is expected to outpace the overall dairy category, already projected to grow on average 2.4% annually between 2023 and 2032.

Added Huang: “However, weaker economic conditions pose downside risks to demand growth. Although cheese consumption has a long runway for growth, it will be sensitive to prices and consumer purchasing power.”

China will remain a growth engine for the global cheese trade, as domestic supply cannot satisfy increasing local cheese consumption. Domestic cheese production is likely to account for 35% to 45% of total cheese consumption, leaving a 55% to 65% share from imports.

Continued Huang: “We estimate China’s annual cheese imports will reach 270,000 to 320,000 metric tons in 2030. Although trade opportunities remain favourable, the potential for increased domestic cheese production could impact our import growth forecast.”

The Chinese cheese market is seeing a healthy pipeline of investment activity, with local dairy companies investing in both onshore and offshore cheese capacity and global companies investing in local manufacturing capacity to support their growth strategy.

Chinese cheese demand posted a 16% CAGR between 2012 and 2022, increasing from 57,600 metric tons in 2012 to 254,000 in 2022. Drivers of this growth include a rise in disposable income among middle-class consumers, the growing appetite for Western-style quick-service-restaurant chains, and novel uses of cream cheese and mozzarella, which led to the rising popularity of cheese in the foodservice channel.

From 2012 to 2022, foodservice cheese sales accounted for 60% to 75% of total cheese consumption, with 2022 sales reaching 154,000 metric tons.

Concluded Huang: “We estimate cheese sales growth in the foodservice channel to average 10.3% annually between 2023 and 2030, with demand reaching 375,000 metric tons by 2030.”  For more visit Rabobank.com

David Cox / IDM

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