No kidding! British goat’s milk conquers Asia6th Feb '17
Chinese lactose intolerance and a taste for luxury has boosted Delamere Dairy. Continuing our Routes to Growth series, Rebecca Burn-Callander finds out how the company expanded east
Company: Delamere Dairy Trading in: China, Malaysia and Singapore Sector: Dairy
Sometimes products seen as humdrum by consumers in one part of the world can have a very different reception elsewhere. That’s what Delamere Dairy discovered when it began selling goat’s milk in China.
The Cheshire-based business focuses on selling goat’s milk, butter and cheese to people in the UK, where it’s seen by many as a fridge staple. But in China, goat’s milk is considered so unusual and exciting that it is bought by affluent shoppers – often as a gift.
“The population in south-east Asia is growing by 250,000 babies each day”
“Goat’s milk is bought for events and celebrations,” says managing director and co-owner Ed Salt. “It’s expensive to export goat’s milk to China so it has a premium price.”
The phenomenon was unexpected, he admits, but Delamere has responded by repackaging a growing proportion of its long-life milk exports into 200ml packs for gifting. “If you turned up to a dinner party in the UK with a carton of milk you’d probably be looked at quite differently,” he laughs.
Not all of Delamere’s Chinese consumers are buying milk for its novelty value. The main reason people all over the world try goat’s milk is for health reasons. A large proportion of China’s population is lactose intolerant and goat’s milk – closer to human milk in its chemistry – is easier to digest.
“We covert people on the health benefits,” Salt says. “And they tend to become evangelical about the milk after that, in China and elsewhere.”
Delamere, which has a Queen’s Award for export, was the first dairy to send its goat’s milk to China – and even helped the authorities create the regulation to allow its sale in the country.
The process was arduous, says Salt, but the size of the potential market was too big to be ignored. China added the equivalent of Turkey's entire economy to its GDP in 2015 and now represents around 12 per cent of the value of the global economy, according to HSBC. “The population in south-east Asia is growing by 250,000 babies each day,” says Salt.
“Traditionally people in China don’t have dairy; only 5 per cent of the population consume milk, cheese or butter. It’s the last dairy frontier.”
Delamere opened an office in Hong Kong in 2011 to help it tackle the market and sales across nearby Malaysia and Singapore are also rising.
In 2015, Delamere generated £3m of its £21m turnover from overseas sales, spread across 20 different territories. In the coming years, Salt predicts that 30 per cent of sales will derive from exports. The Sunday Times has hailed the business as one of the UK’s fastest-growing small food and drink exporters for two years in a row.
There is a lot of domestic competition in China, however, which is the third-largest producer of milk in the world. But Western products have been favoured by consumers since an infant formula scare in 2008.
The dairy has experimented with different ways of getting its wares in front of Chinese consumers. Delamere sold 20,000 litres in 30 minutes when it appeared on a TV shopping channel, Shanghai’s version of QVC. “We’ll continue to explore TV shopping and we could try that route with other, larger cities in China.”
It can be difficult to get consumers to try goat’s milk for the first time, Salt admits, because of how people think it will taste. “Cow’s milk doesn’t taste like stilton but there’s still the perception that goat’s milk will taste like goat’s cheese,” he says.
But with more and more people keen to experiment with alternative milks for health reasons, goat’s milk could be about to have its day. “We expect revenues to grow to £24m in 2016 and there will be further growth over the coming years,” Salt says. “We’re lucky in the food industry – everyone has to eat!”