(Yicai) Dec. 13 -- Chinese dairy companies are turning to more nutritious products as sales of their usual full-fat milks, yoghurts and cheeses hit a ceiling and consumers become more health conscious, industry insiders said.

Dairy firms Inner Mongolia Yili Industrial Group and Mengniu Dairy Group have both unveiled new energy drinks and are hiking investment in research and development in fields such as probiotics and health supplements for the middle aged and senior citizens, they said.

The Covid-19 pandemic is still having a big impact on consumption trends in the fast-moving consumer goods sector, according to the China Shopper Report 2023 compiled by UK market research firm Kantar Worldpanel. And health-related products have great growth momentum.

China’s health-related consumption is becoming more refined and discerning, Xie Weibo, president of Danone China, North Asia and Oceania, told Yicai. The middle aged and elderly are paying more attention to their health. And young people are also pursuing healthy lifestyles while enjoying tasty products.

Overseas dairy producers are also latching onto the new trend. Nestlé and Danone both showcased a number of new healthy products at the sixth China International Import Expo held last month.

Mead Johnson is accelerating its R&D of nutritional products targeting adults in China, said Jiao Yan, the executive in charge of the corporate affairs division at the US infant formula maker’s China arm.

Before, competition among Chinese dairy producers mainly focused around marketing, Tang Hong, general manager at Beijing Sanyuan Foods, recently said at an industry forum. But in the future they will look to improve their price-performance ratio as well as leverage unique features and other aspects to satisfy market demand.

Revenue growth at China’s big dairy companies has been slowing down since the beginning of the year. Hohhot-based Yili’s earnings expanded 3.8 percent in the first three quarters to CNY97.4 billion (USD13.6 billion), much slower than the 10.4 percent clip a year ago.

Bright Dairy’s revenue dipped 3.4 percent over the period to CNY20.7 billion (USD2.8 billion), a widening of last year’s 3.1 percent drop, while New Hope Dairy’s earnings increased by 9.6 percent to CNY8.2 billion (USD1.1 billion) whereas last year they expanded 12.4 percent.

Editor: Kim Taylor