China is set to introduce stricter standards for cheese by the end of 2022.
The updated national standard however should help the industry to develop more cheese categories.
Based on the new rules, cheese products need to have 50% or more raw cheese to be considered processed cheese. Those that have 15% to 50% of raw cheese can be sold as cheese or cheese products. Before this, even the latter category could be identified as processed cheese.
China cheese market is growing rapidly. Cheese production is expected to reach 500,000 tons by 2025, and the retail market is expected to cross Rmb 30 billion (US$4.3 billion), according to report by the Dairy Association of China. A large number of brands have entered the lucrative cheese market due to the relatively loose national standard and the low industry threshold, which resulted in severe competition. China currently has 1,490 cheese-related domestic firms, according to data from Qichacha.
The new requirements should increase companies’ production costs, which in turn raise industry access barriers. Also, as there is a relatively big difference between domestic and overseas customers’ requirements on flavor, the new rules will enable more product innovations.
Consumer lifestyles are changing rapidly amidst the pandemic. The frequent lockdowns have caused an uptick in cheese consumption in China, according to Euromonitor International. But China’s per capita cheese consumption is still lagging behind Japan and South Korea. This signifies huge growth potential as Chinese consumers start to appreciate the different varieties of cheese. Convenient cheese format like cheese sticks is also fast picking up by consumers.
