China’s milk production dipped last year for the first time in five years, after years of steady growth, as shifting consumer preferences outpace the industry’s ability to adapt. The key to reversing the trend lies in closing the gap between traditional dairy offerings and the evolving demands of modern consumers, industry insiders said.
China’s liquid milk production slumped 2.8 percent last year from the year before to 27.4 million tons in total, according to data from the China Dairy Industry Association. Prior to this, output had been growing at more than 2 percent a year for the past five years.
Dairy producers above a designated size across the country logged a drop in dairy product production of 1.9 percent in 2024 year on year to 29.6 million tons, according to data from the National Bureau of Statistics. This is the first negative growth in recent years and is in stark contrast to 2022 and 2023, when output expanded by 2 percent and 3.1 percent respectively.
This has had an impact on revenue. The top three dairy companies, namely Yili Group, Mengniu Dairy and Bright Dairy, all logged a dive in earnings of between 8 percent and 10 percent last year from a year earlier. Yili posted revenue of CNY115.8 billion (USD16 billion), Mengniu reported CNY88.7 billion (USD12.3 billion) and Bright Dairy logged CNY24.3 billion.
There are two main reasons behind the slump, Liu Jiangyi, chairman of the China Dairy Industry Association, said at the association’s annual meeting recently held in Nanjing. First, a complex domestic and foreign economic environment has led to a slowdown in consumer spending, and second, the market is reflecting both a drop in demand for regular milk and a dependence on imported premium dairy products.
China’s dairy industry has been dominated for a long time by different types of liquid milk, but consumption is now on the decline. Last year, the average Chinese person consumed 41.5 kilograms of dairy, a 5.6 percent drop from the year before.
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