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Dairy snacks lead growth of US processed food exports, particularly in China

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Mary Ellen Shoup

By Mary Ellen Shoup+

Last updated on 22-Mar-2017 at 15:31 GMT2017-03-22T15:31:30Z

Dairy products are the fastest growing segment of the overall US food export market. ©iStock/szefei
Dairy products are the fastest growing segment of the overall US food export market. ©iStock/szefei

Dairy products are expected to be the fastest growing segment of US shipments of processed foods due to rising consumer demand for snacks with more natural ingredients and higher amounts of protein, according to a report released by Freedonia Focus Reports.

Between 2006 and 2016, US output of dairy products rose 4.9% annually and exports are expected to rise at a CAGR of 3% to reach $95.5bn by 2021.

According to USDEC, China has increased its dairy imports from the US by 73% over the last eight months.

China relies on US for food safety

During the past decade, US producers expanded their presence in export markets, bolstered by their reputation for product safety and quality.

“Exports of dairy products to China rose vigorously as food safety scandals in that country made consumers wary of Chinese brands,” the report stated.

Due to this China has come to rely on international dairy brands to fulfill consumer demand for dairy snack products such as cheese and yogurt.

New Zealand dairy producer Fonterra sold 72m gallons of milk in consumer and food-service products to China in the third quarter of 2016, representing a 36% from the same period last year.

Cheese and yogurt register strong growth

Dairy subsegments such as yogurt, dairy product substitutes, and cheese registered robust growth, according to the report.

“The cultural ubiquity of cheese as a component of meals and snacks will support advances as the population continues to grow,” the report stated. 

Yogurt is also leading the trend of dairy exports from the US to the rest of the world as consumers look for healthier products to eat throughout the day, especially ones with protein. The report indicated strong opportunity for Greek yogurt in other countries outside of the US.

According to Kristi Saitama, vice president of export marketing ingredients at USDEC, health conscious adults and seniors as well as “middle-class fitness enthusiasts” in China are driving the demand for dairy products with functional benefits like protein.

For this same reason, US dairy producers have had to contend with declining per capita consumption of certain products such as ice cream. 

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