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Text | Chen Xiaojiang
Source | Mantis Finance (ID: TanglangFin)
It takes many years to build trust, and it only takes a moment to destroy it.
After Ruixing and Haokai continued to expose their financial reports for fraud, the crisis of trust in the Chinese stock market was detonated. Its scope is far more than these two listed companies, but the group of listed companies in the Chinese stock market, as well as the road to listing of unlisted companies.
This can't help but remind people of the "melamine" food safety accident that was detonated by Sanlu milk powder in 2008, which caused the domestic milk powder brands to almost collectively fall for more than ten years.
Today Sanlu milk powder is no longer there, but the aftermath of the impact of "melamine" on domestic infant milk powder brands has not gone far.
1. Domestic baby milk powder brand has not escaped the "Taxi Tuo trap"
Once bitten, twice shy.
In this regard, Chinese parents who buy domestic milk powder have a deep experience.
In 2018, 10 years have passed since the domestic milk powder pollution accident in 2008, but domestic consumers are still worried.
According to the survey data of AiMedia Consulting, in 2018, Chinese consumers still have insufficient confidence in domestic infant milk powder, their willingness to buy is still not strong, and the gap between brand recognition and imported brands is obvious.
Among them, the purchase intention of consumers in first- and second-tier cities is only 12.5% and 16.5%, and that of third- and fourth-tier cities is only 28.1% and 28.9%. This is in stark contrast to imported brands.
In terms of brand recognition, the top 5 Chinese infant brand recognition in 2019 are Abbott, Nestlé, Mead Johnson, Flying Crane and Wyeth. The domestic brand Feihe only occupies one seat.
In fact, the quality of domestic milk powder for infants and young children is not worse than imported brands. In recent years, the passing rate of random inspection has been stable at more than 99%, and it is better than imported milk powder in many key indicators.
According to Chen Shaozhou, deputy director of the Food Safety Sampling Inspection and Monitoring Department of the State Administration of Market Supervision and Administration, as of December 13, 2019, a total of 2358 batches of national food safety supervision and sampling of infant formula milk powder were completed, and 5 unqualified samples were detected Batch, the pass rate is 99.79%.
Among them, 114 enterprises in the domestic spot check produced 1,721 batches of samples, which were 100% qualified.
However, consumers seem to have fallen into the "Taxi Tuo trap", and the willingness to pay for domestic milk powder brands is still not high. Imported milk powder, mainly high-end products, still accounts for up to 80% of the first and second-tier markets.
The so-called Tacitus trap, from "Tacitus History", is what Tacitus said when evaluating the Roman emperor. "Once the emperor becomes an object of hatred, the good and bad things he does will also cause people to treat him. Disgust ". Later, it was described as a social phenomenon that lost credibility.
This is the case for domestic infant milk powder.
Since domestic milk powder became an object of hate in 2008, it seems that no matter how much it is done, it has not yet restored the hearts of consumers.
2. The milk source is directed from the left to the right, and the layout of domestic baby milk companies is different
How can the domestic baby milk powder brand be laid out in order to restore the consumer's favor?
Because consumers are mainly concerned about three aspects when purchasing infant formula milk powder: first look at the milk source, second look at the formula, and third look at the craft.
Among them, the milk sources are best distinguished, the formulas are also very good, and the process is relatively complicated. Therefore, milk sources and formulas have often become the main selling points of major dairy companies, as well as the main direction of the layout.
Based on the different characteristics of the major dairy companies, domestic baby milk powder brands also have their own emphasis on the layout. "Mantis Finance" found that it can be roughly divided into three categories:
The first category of brands is more focused on milk sources.
The current purchase of milk powder fever is mainly a source of milk.
The reason why foreign-funded milk powder can occupy more than 80% of the market share in first- and second-tier cities is far higher than that of domestic milk powder, because consumers in first- and second-tier cities pay more attention to milk sources.
Therefore, if domestic milk powder brands want to shorten the gap with foreign milk powders at the milk source level, the use of imported milk sources is a shortcut. Many domestic milk powder brands are also "imported milk source" brands.
For example, Synbiotics, its infant milk powder brands Beixing, Paixing, and Alphastar milk sources are all in France, and goat milk powder brands can be seen in Australia. 100% European original can imports and Australian original can imports are its main selling points.
Another example is Ausnutria Dairy, which started with infant milk formula in cooperation with Australian milk powder processing plant Tatura.
After 2011, it has accelerated the deployment of high-quality milk sources in the Netherlands, Australia and New Zealand. As of the end of 2019, the Ausnutria brand has 9 milk powder processing plants (including joint ventures) in the world.
There are 2 domestic (Changsha), 7 overseas factories, 5 in the Netherlands, 1 in New Zealand, and 1 in Australia.
According to Euromonitor data, Aoyou Dairy's share of the Chinese infant milk powder market has risen from 2.0% in 2016 to 3.9% in 2018, ranking ninth in the market and fourth in domestic milk powder brands.
This is inseparable from its layout in the world's high-quality milk sources.
The second category of brands focuses more on formulas.
Because the type, quantity and proportion of nutrients in milk are very different from breast milk, it is not conducive to absorption and digestion by infants and young children. Therefore, milk needs to be adjusted according to a certain formula and nutrients to be a substitute for breast milk. So the recipe is critical.
Whether the milk powder is good or not depends not only on the formula (nutrient composition table), but also whether it is easy for children to digest and absorb-that is, whether it is suitable for the baby's physique. This is why the same milk powder behaves differently in different infants and young children.
In view of the differences in body constitution, living environment, and eating habits of foreigners and the country, good milk powder that conforms to foreigners is not necessarily the most suitable for the Chinese people. Therefore, many domestic infant milk powder brands use "The recipe is a selling point.
One of the most successful domestic brands is Feihe. Its "Xingfeifan" series was used as a selling point and was a great success. It became the only domestic single product with annual sales exceeding 5 billion yuan.
Unlike Ausnutria Dairy, which buys and buys global milk sources, Feihe invests more in research and development.
According to financial reports, Feihe's R & D expenditures in 2019 reached 171 million yuan, a year-on-year increase of 57.1%.
For example, Feihe built the industry's first dairy engineering academician workstation; from different regions of the country, through the collection of various physical and dietary mothers, more than 1,500 samples of breast milk were collected to establish a comprehensive Chinese breast milk database.
It is through focusing on various researches and developments including formulas that are “more suitable for Chinese baby physiques” that Feihe has now become a leading domestic infant milk powder industry leader.
The third type of milk source and formula take into account, and also play the process and the whole industry chain model card.
In fact, all domestic milk powder companies will work hard on formulas and milk sources.
Taking Beinmei as an example, it has the Super Crown series “developed specifically for Chinese babies”, as well as the “Love + Series” that uses imported milk from Ireland (Beinmei Green Love, Beinmei Red Love etc.).
In addition to milk sources and formulas, process and industrial chain optimization is also a direction.
Take Junlebao as an example, its main industry model is the whole industry chain. Through the self-built milk source base, the infant milk powder traceability system was improved to make the production process 100% controllable, and the information of each can of Junlebao milk powder was transparent. Allow consumers to see such things as production date, integrity evaluation, quality inspection report, ingredient list, etc.
In terms of technology, many domestic dairy companies, including Junlebao and Beinmei, etc., are using raw milk to make milk powder through a wet mixing process.
Compared to the foreign-funded milk powders that generally use the base powder dry blending process to produce milk powders, the raw milk + wet blending process has two major benefits.
First of all, the freshness of the product is guaranteed, and the nutrients can be better retained;
Secondly, the liquid milk is mixed with the added nutrient elements, the product is homogenized better, and the intermediate process of possible contamination is reduced.
Of course, the production of a jar of good milk powder is indispensable for good milk source, good formula and good craftsmanship. Domestic dairy companies may each have their own focus at the moment, but in the end they still have to make up for the shortcomings and highlight their advantages in order to achieve sustained recovery.
3. Three major directions for domestic baby milk powder brands from foreign milk powder
According to Nielsen's "Insight of the Chinese Infant Formula Milk Powder Market Environment 2018" report, in 2018, the market share of domestic milk powder was 43.7%.
There is still a gap between the domestically-made infant milk powder set by the country and its efforts to win a 60% market share.
Among them, foreign milk powder accounts for more than 80% in first- and second-tier cities, while domestic milk powder's market share is more in third- and fourth-tier cities and townships. There is also a price difference of 40-50 yuan / Kg between domestic milk powder and foreign milk powder .
Therefore, from the perspective of "Mantis Finance", from the perspective of market share or profit, if domestic baby milk powder wants to grab the baby's bottle from foreign milk powder, there are three main directions that are feasible.
1. Diversified categories
Due to the continuous decline of China's birth population in 2018 and 2019, the number of newborns in China has entered a declining stage.
In addition, the country is vigorously promoting breastfeeding, and the infant milk powder market in China is already a stock market.
Under the stock market, it is a major direction for domestic milk powder to break new markets and diversify its product layout.
Take Aoyou Dairy as an example. In addition to milk powder, its development in goat milk powder is also very eye-catching.
In 2019, the income of Jiabeite goat milk powder under Ausnutria reached 2.9 billion yuan, making it the largest brand of goat milk powder. According to customs data, it accounts for 61% of the total imported goat milk powder, and has not lost to foreign goat milk powder.
In addition, Aoyou monopolized more than half of the goat milk supply in the Netherlands through the acquisition of Hepkano, which will also be a major advantage for its subsequent development.
2. High-end products
According to the Frost & Sullivan report, from 2014 to 2018, the market size of domestic high-end infant formula milk powder surged from 35.3 billion yuan to 92.9 billion yuan, with a compound annual growth rate of 27.3%. And far exceeded 11.2% of the overall market.
Seizing the trend of high-end milk powder and developing high-end milk powder is another major direction for domestic milk powder to break through, of which Feihe is the best example.
In 2015, Feihe took the brand positioning of "more suitable for Chinese baby's physique" as its brand positioning and created the first domestic "Xingfeifan" series of high-end milk powder containing bionic breast milk ingredients.
In 2017, Feihe launched the "Zhenzhi Organic" series of ultra-high-end milk powder (organic milk powder).
By 2018, the annual sales of "Xingfeifan" series products will be 5.11 billion. With a market share of 24.7%, Feihe has become the first place in China's ultra-high-end infant formula milk powder market.
From 2014 to 2019, the revenue of Feihe's high-end and ultra-high-end products increased from 1.586 billion yuan to 9.411 billion yuan, and their share in the company's total revenue increased from 42.6% to 68.6%.
Through the high-end product strategy, Feihe's gross profit margin increased from 54.6% in 2016 to 70.0%, and its net profit margin increased from 10.9% to 28.7%.
In addition to Feihe, domestic dairy companies such as Mengniu, Yili and Ausnutria are also deploying high-end products, especially organic milk powder.
3. Functional subdivision
With the popularization of parenting knowledge, consumers will purchase milk powder more targetedly.
For example, according to the changes of trace elements in babies in different periods, choose milk powder that prefers to supplement certain trace elements. Therefore, the introduction of more subdivided milk powder is also the direction of domestic brands.
Taking Beinmei as an example, in response to the increasing incidence of allergies in children year by year, the company launched the "Shu Haomin" hypoallergenic comfort nutrition formula milk powder;
Launched special medical formula milk powder for premature / low birth weight infants in Bessin;
Bein Meiguanbao series for efficient calcium supplementation, and Beinmeihong love series for iron supplementation, etc.
In addition to the main products, expanding more functional subdivision products can also help domestic milk powder win more market share.
Write at the end
2020 is a crucial year for self-certification of domestic infant milk powder brands.
On the one hand, the registration system has been implemented for more than two years. Other policies, such as the Action Plan for Domestic-made Infant Formula Milk Powder released last year, are also being gradually implemented, and the overall industry environment is improving.
On the other hand, the occurrence of the New Coronary Pneumonia pandemic has hindered the production and circulation of foreign milk powder, and domestic milk companies have resumed work early. Since infants and young children cannot cut off food, they inadvertently provide a superior opportunity for domestic milk powder.
The domestic baby milk powder brand has become more mature in terms of milk source, formula and technology in recent years, and its products have gradually improved in terms of diversification, high-end and refinement.
Next, can we take the opportunity to prove ourselves, complete the brand remodeling, and revitalize the domestic milk powder, may wish to wait and see!
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