(Yicai Global) Sept. 6 -- China's cheese market should become more differentiated with higher standards to be introduced by year-end, according to industry insiders.

The updated national standard should help develop more cheese categories, Yicai Global learned from experts. 

Based on the new rules, products need to have 50 percent or more raw cheese to be considered processed cheese. Those that have from 15 percent to 50 percent of raw cheese can be sold as cheese or cheese products. Before this, even the latter category could be called processed cheese.

The market is growing. China's cheese production will reach 500,000 tons by 2025, and the retail market will be worth over CNY30 billion (USD4.3 billion), the Dairy Association of China proposed at the 2022 China Cheese Development Summit that opened yesterday. 

A large number of brands have entered the cheese market due to the relatively loose national standard and the low industry threshold, which resulted in severe homogeneous competition, said Song Liang, an independent dairy industry analyst. China currently has 1,490 cheese-related domestic firms, according to data from business information platform Qichacha.

The hiked requirements should increase companies' production costs, which in turn raises industry access barriers, several insiders said. Also, as there is a relatively big difference between domestic and overseas customers' requirements of flavor, the new rules would enable more variance.

Lifestyles are changing amid the Covid-19 pandemic. Lockdowns have caused an uptick in cheese consumption in China, a senior head of consulting at Euromonitor International said. But China's per capita cheese consumption is still behind those of Japan and South Korea. With the changing of people's habits and preferences, and the accelerated deployment of dairy companies, the market potential is gradually being released, she added. 

Chinese consumers boosted their purchases of dairy products, driven by the rising awareness of the benefits of healthy eating and some popular products such as cheese sticks, an industrial professional said.

On average, each Chinese person consumed 6.5 kilograms more dairy products in 2021 than they did in 2019, Yicai Global learned from the 13th Dairy Conference China which opened yesterday.

China's cheese consumption tallied CNY13.1 billion last year, up 66 percent from 2019, according to data from Euromonitor International. The consumption of processed cheese almost doubled to CNY9.7 billion (USD1.4 billion).

Editors: Shi Yi, Emmi Laine, Xiao Yi