Zhongtai: From Nutritional Supplementation to Precision Functionality - A New Engine for Structural Growth in the Dairy Industry

Zhongtai released a research report stating that as dairy companies continue to iterate and mature in technology, new functional products such as high-protein and lactose-free options are emerging, with composite functional products becoming increasingly diverse. Functional dairy products are expected to maintain a growth rate that consistently surpasses that of the broader market. Dairy companies that can explore new scenarios, expand their customer reach, and drive repurchase through quality may benefit; it is recommended to focus on Inner Mongolia Yili Industrial Group (600887.SH), MENGNIU DAIRY (02319), and New Hope Dairy (002946.SZ). The main points from Zhongtai are as follows: Market Landscape: Low Temperature as the Main Focus, Breaking Through Adversity The overall Chinese dairy market is forecasted to be under pressure by 2025, while the functional dairy segment is expected to break through and become the industrys biggest highlight. From the perspective of category structure, the low-temperature segment leads growth with a share of up to 78%, with online sales of low-temperature milk reaching 3.96 billion yuan, a year-on-year increase of 15.8%, showing a rise in both volume and price; online sales of low-temperature yogurt reached 999 million yuan, with a year-on-year increase of 27.1%. The core drive for functional dairy products mainly comes from the resonance between upgraded health awareness on the consumer side and product innovation on the supply side. On the demand side, consumers are shifting from basic nutritional supplementation to a pursuit of fresh, active nutrition with precise functions. According to Qince Consumer Research data, functional dairy products are expected to maintain a compound annual growth rate of 15%-20% from 2026 to 2029, potentially exceeding 140 billion yuan in market size by 2029. Core Segment Analysis: The core components of functional dairy products mainly include A2-casein, probiotics, lactoferrin, and organic ingredients. 1) A2-casein: Contains only A2 type -casein and no A1 type; its molecular structure is closer to that of human milk, making it easier to digest and absorb. About 25-30% of consumers report digestive discomfort related to regular milk, making A2 milk a core solution. The global A2 milk market is expected to reach 1.371 billion USD by 2025 and expand to 2.81 billion USD by 2034, with a compound annual growth rate of 8.3%. 2) Probiotics: Active probiotics such as bifidobacteria and lactobacilli regulate gut flora and promote digestion and absorption. The Chinese probiotic industrys market size is expected to reach 117.1 billion yuan by 2025, with the dairy category projected to be 84.8 billion yuan; dairy products account for 78% of the probiotic market, making it the most important carrier of probiotics. 3) Lactoferrin: A core immune protein in human milk, promotes iron absorption, has antibacterial properties to protect the gut, and enhances immunity. The addition of lactoferrin in infant formula has become standard, with adult dairy products starting to incorporate it as well. 4) Organic Certification: Organic certification throughout the entire process from grass planting to cow rearing, free from antibiotics, hormones, and pesticide residues, meets the dual demands of high-end consumers for food safety and sustainability. From the perspective of technological barriers, the technical barriers of functional dairy products mainly include three dimensions: strain R&D, protein separation, and active ingredient retention. As technologies such as flash evaporation, ultrafiltration, and ceramic membrane microfiltration mature, breakthroughs in ambient active probiotic technology expand consumption scenarios, and the industry is likely to continue maintaining high-speed expansion. Risk Warning: Weak macro consumption, deterioration of the competitive landscape, tightening of regulatory policies, risks of technological iteration, untimely updates of research report information, distortion of third-party data, and deviations in market size estimation.