Naturally good

Irish dairy exports to China are strong, with certain categories performing better

than others. Suki Wu, Bord Bia Dairy Specialist, outlines the ongoing activity in the region, sharing the message of Ireland’s natural, sustainable dairy produce.

 

China is a market of growing importance for Irish dairy exports, taking 7% of all volume Ireland exports in 2020. This makes it Ireland’s third most important market by volume for dairy, and the first for infant formula. Dairy is the biggest category of Irish food exports to China market.

Between 2015 and 2020, China dairy imports grew steadily, with annual growth rates of 22%. In 2020, China imported 3.28m tonnes of dairy products in total. In value terms, imported dairy products reached €9.78bn, a 5% increase, year-on-year.

Much of the narrative around China and Ireland focuses on the infant formula business, but we have seen exports of other dairy more than double, from 31,000 tonnes in 2016, to 64,000 tonnes in 2020. This has been driven by whey, skimmed milk powder, and UHT milk and cream. Covid-19 has created challenges and we have seen some of the import premium disappear as China consumers look to local production as safer.

 

MARKET SHARE ​

In 2020, imports of bulk milk powers and infant formula dropped by 3.5% and 3% while imports of whey power, cream, cheese and milk all grew significantly. Last year, Irish dairy exports to wider China reached €553m. Exports of milk and cream, whole milk powder and casein increased but whey, cheese, butter, milk protein concentrate, and fat-filled milk powder dropped by a large margin.

But Irish dairy exports to mainland China saw an 8% increase, reaching €490m, with growth across infant formula, milk and cream, butter, skim milk powder, whole milk powder and casein. However, exports of cheese, whey, milk protein concentrate, and fat-filled milk powder were reduced.

Between 2014 and 2020, cheese exports to mainland China grew tenfold, from less than €1m to over €10m. Milk and cream exports also enjoyed significant growth, reaching €21m last year with a 21% growth year-on-year in value terms. Butter exports grew sevenfold, reaching €2.8m last year with a 2% increase year-on-year. Our largest export category to the mainland market, infant formula (IMF), grew by 10% in value terms last year, reaching €363m, in the face of Covid uncertainties and the fast-growing domestic IMF brands.

 

IN-MARKET ACTIVITY​​

Over the last year, we have executed a number of online and offline promotional and marketing activities to continuing growing our business and reputation in past year. As well as traditional channels, we are also trying to reach out by diversifying into channels for wider groups.

Bord Bia China office held seven market promotional events in the second half of last year: five offline events and two online events. Through kinds of market activities, we worked with Irish dairy companies together to bring our premium dairy products to the market and have better engagement with our audiences.

On market communications, based on initial perception of that Ireland is natural and green, we would hope to explore further and dig deeper on consumers and industry professionals’ educations. Based on a three-pronged approach, we would plan to work with master chefs, multi-channel medias, KOLs, KOCs and industry experts to generate a broader awareness of our distinct natural attributes, advanced technologies and strict food safety standards.

 

FUTURE FOCUS ​

2020 was a challenging year for most of us with many uncertainties caused by Covid-19. In 2021, we will continue to host various online and offline campaigns and help Irish dairy companies to grow their business in the market. So far this year, we have hosted two offline dairy trade events in the southern and western regions of China. Next, we will host more online and offline events targeting different channels and these include an Ireland dairy technology seminar, business match talks, chef demos and attending different professional trade shows etc..

From a communications perspective, with messaging around natural attributes, science, technology and sustainability for Irish dairy, we hope to further enhance our reputation both at trade and consumer levels. Towards the end of the year, Ireland’s national grass-fed standard will be launched in the market.

China had played an important role for Irish food and drink in the past and will continue to in the future. We would hope to bring more premium dairy products to Chinese consumers.