Core Insights - The domestic dairy industry is shifting focus from liquid milk to high-value products like butter, cream, and cheese, which are becoming new growth opportunities for companies [1][4]. Group 1: Market Trends - The competition in the dairy sector is expanding from the consumer retail market (C-end) to the food service industry (B-end), with "butter, cream, and cheese" becoming a key battleground for dairy companies [1][4]. - The domestic market for cheese has seen significant growth, with the penetration rate increasing from 8% a decade ago to around 30% currently, indicating substantial future potential [6]. Group 2: Product Development - Domestic companies like Miaokelan Duo and Yili are launching new products targeting the B-end market, including various types of cheese and butter, to compete with foreign brands [2][3]. - Miaokelan Duo has introduced its first domestically produced mozzarella cheese, which is expected to enhance its service capabilities for B-end clients [3]. Group 3: Financial Performance - Despite a decline in liquid milk revenue, companies are reporting over 20% growth in high-value dairy products like cream and cheese [4]. - For instance, Miaokelan Duo's cheese business generated 3.3 billion yuan in revenue in the first three quarters, reflecting a year-on-year growth of 17.4% [4]. Group 4: Import and Consumption Trends - In the first nine months of 2025, China imported approximately 2 million tons of dairy products, with liquid milk imports decreasing by 6.1%, while imports of cream and cheese increased by 36.3% and 17.8%, respectively [6]. - The shift in consumer behavior from drinking to eating dairy products is creating a larger market for "butter, cream, and cheese," which is expected to expand significantly in the coming years [6][7]. Group 5: Industry Dynamics - The rapid development of the "butter, cream, and cheese" sector is beneficial for the upstream raw milk industry, helping to mitigate cyclical fluctuations by redirecting fresh milk resources to high-value, longer shelf-life products [7].