Oat Milk Is Ready to Conquer China

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China has the third-largest dairy industry in the world. That’s a very new development; dairy was highly localized and not very popular nationwide in China up until the Soviet influence of the 1950s.

Since then, however, dairy has become a massive force in Chinese agriculture—despite most of the country’s population being lactose-intolerant. Enter oat milk. At least, that’s what oat milk producers like Sweden’s Oatly hope, according to a great article in the South China Morning Post.

Chinese milk producers have, since the 1950s, been aggressive lobbyists, with articles in state-run newspapers urging children to drink more milk, and with government subsidies aimed at increasing the scale and size of the industry. But while the Chinese dairy industry has swelled dramatically, it’s far from stable. A tainted milk scandal in 2008 killed six infants and sickened hundreds of thousands. Dairy in China, as in the US, is struggling to make ends meet with ever-increasing production and decreasing demand.

And the population of China, largely, is lactose-intolerant. Lactose intolerance isn’t the easiest thing to measure—it operates on a spectrum—but most estimates place the incidence of lactose intolerance in China at somewhere north of 80 percent. Caucasians tend to be much more able to digest dairy products; Russia, for example, has a lactose intolerance rate of about 13 percent. Milk is a nutrient-rich food, but there isn’t really anything in it that can’t be found elsewhere. Much of Chinese cuisine, for example, gets its calcium from seafood sources like fish sauce.

But the efforts to push dairy, and products containing dairy, in China have opened up a door for milk alternatives. Soy milk, of course, actually comes from China, but is not always considered a replacement for dairy milk. Cow’s milk, being essentially a foreign food, is usually used in Western dishes and beverages, like coffee. Soy milk, being a Chinese product, has its own uses, and is not usually used in Western foods.

That opens the door for non-Chinese plant-based milks. And the trendiest of all is oat milk: tasty, low-impact environmentally, and mixes well with coffee (unlike soy milk, which separates). It’s not really grown in China; the largest global producers are Russia, Canada, and Poland. But Oatly, the best-known oat milk producer, thinks China could be a perfect fit. To that end, the company has even created a Chinese character for their product, combining the characters for “plant” and “milk.”

Oat milk is already available in Hong Kong, especially in the ever-present Starbucks there. But ramping up production to match demand has been an early problem for Oatly and other oat milk producers. A new, massive facility in New Jersey should help the situation in the United States. What’s the New Jersey of China?