【Inventory】Domestic dairy industry in 2020:leading dairy companies to accelerate the distribution of milk sources; fierce competition in market segments
By: Date: 2021-02-12 Categories: chinesefood Tags: ,
  Food Partner Network News In 2020, the global outbreak of new crown pneumonia will occur. Against this background, major domestic dairy companies are At the same time, constantly seeking development and various actions, leading dairy companies are accelerating the distribution of milk sources, and competition in market segments is fierce.

   Leading Nipple Enterprise Accelerates Milk Source Layout

   Milk source is the key to determining the quality of dairy products. Milk source has always been the battleground of major dairy companies. In 2020, major dairy companies will continue to expand The strategic layout of milk sources, while building high-quality milk source bases by itself, has rapidly realized the expansion of milk source layout through mergers and acquisitions.

   In 2020, Mengniu Dairy will continue to make efforts in the distribution of milk sources, build its own milk source, and acquire downstream assets of China Shengmu. In terms of self-built milk sources, in May 2020, Mengniu Group’s”China Dairy Industry Park 300,000 milk source base construction project” started laying the foundations in Bayannaoer, Hohhot, and Tongliao. On September 29, 2020, the People’s Government of Lankao County, Henan Province, Mengniu Dairy Group and Huahuaniu Dairy Group signed a strategic cooperation agreement at the Department of Agriculture and Rural Affairs of Henan Province. The three parties will jointly promote the construction of a 200,000 dairy cow breeding base in Henan Province. On November 1, 2020, Qiqihar Beiyuan Development Zone and the District Development and Reform Bureau invited Song Hui, general manager of Mengniu Dairy’s milk source business department, to exchange views on the new 100,000 farms of Mengniu Dairy during the”14th Five-Year Plan” period. To build 3,000 large-scale tourist farms, in-depth planning will be carried out in terms of cooperation methods and site selection, and the construction of milk source bases will be fully promoted. In addition, in 2020, Mengniu Dairy acquired the downstream assets of China Shengmu. Following Mengniu’s acquisition of a 51%stake in Shengmu High-tech Dairy in December 2018, on January 22, 2020, China Shengmu issued an announcement disclosing that its wholly-owned subsidiary Shengmu High-tech has agreed to sell Shengmu High-tech Dairy to Mengniu 49%equity, at a consideration of RMB 8 million, Mengniu holds 100%equity in Shengmu High-tech Dairy. On the evening of July 28, 2020, China Shengmu issued an announcement stating that it had obtained a subscription of approximately 1.197 billion shares by a wholly-owned subsidiary of Mengniu Dairy at HKD 0.33 per share, involving an investment of HKD 395 million (approximately RMB 357 million). After the completion of the transaction, Mengniu Dairy’s shareholding increased from 3.83%to approximately 17.8%of the enlarged share capital, becoming the company’s single largest shareholder.

   In 2020, Yili Group will also launch one after another to speed up the layout of milk sources. In 2020, Yili has launched strategic cooperation with Henan, Shaanxi, Ningxia, Shandong and other places to build industrial cluster projects. On April 9, 2020, the Zhumadian City Government, Suiping County Government, Xiping County Government and Yili Group signed a strategic cooperation framework agreement to invest 3 billion yuan to build a high-end dairy industry cluster base in the local area. On April 29, 2020, Shaanxi Province and Yili Group signed a strategic cooperation framework agreement. On May 13, 2020, the Ningxia Hui Autonomous Region government and Yili Group signed a strategic cooperation framework agreement to jointly build Ningxia Yili’s 100 billion yuan milk industry chain cluster project. On August 27, 2020, the Weifang Municipal People’s Government and Yili Co., Ltd. signed a strategic cooperation agreement. It plans to build a comprehensive planting, breeding, and integration integration by building a modern demonstration farm with 100,000 heads and an intelligent dairy processing plant with a daily output of 3,600 tons.化 item. In addition, industrial cluster projects in Inner Mongolia have been successively put into construction. At the same time, on November 26, 2020, Jiangsu Agricultural Reclamation Group Co., Ltd. and Inner Mongolia Yili Industrial Group Co., Ltd. signed a memorandum of strategic cooperation. The two parties will work together to build the largest high-quality milk source base in East China, to achieve more than 100,000 dairy cows, and to better serve the high-quality life of consumers in Jiangsu and East China.

   In addition, Yili is also stepping up the layout of the upstream milk source industry chain, investing in shares and offering to acquire Zhongdi Dairy. On August 3, 2020, Yili shares announced that its wholly-owned subsidiary, Hong Kong Golden Port Trading Holdings Co., Ltd., intends to subscribe for approximately 433 million shares of Zhongdi Dairy at a price of approximately HK$203 million. After the subscription is completed, Golden Port Holdings will hold 16.6%of Zhongdi Dairy. Less than two months after the equity investment in Zhongdi Dairy, Yili announced on September 27, 2020 that it intends to acquire shares of Zhongdi Dairy, a Hong Kong-listed company, through a tender offer through its newly established holding subsidiary Wholesome Harvest Limited.

   In addition to the two giants Mengniu and Yili, dairy companies such as Bright Dairy and China Feihe are not far behind and have accelerated their milk source layout. On June 17, 2020, Bright Dairy signed a strategic cooperation agreement with Ningxia Zhongwei Municipal Government and Ningxia Agricultural Investment Group Co., Ltd. to jointly build a 100 billion-level industrial cluster in Ningxia’s high-quality milk industry; July 2020, Bright Dairy and Yinbao Group Join forces to establish Jiangsu Guangming Yinbao Dairy Co., Ltd. and Jiangsu Yinbao Guangming Animal Husbandry Co., Ltd. respectively. In 2020, China Feihe will fully acquire Original Ecological Animal Husbandry, which will consolidate the stability of the upstream milk source supply and increase the upstream milk source layout. In October 2020, Yili Control’s Youran Animal Husbandry and Sanyuan took over Fonterra China Ranch. In May 2020, New Dairy disclosed that it intends to acquire 100%equity of Huanmei Dairy for 1.711 billion yuan to consolidate the milk supply chain.

  Milk companies have launched new products, and the market segment is highly competitive

   In 2020, dairy companies will launch new products one after another, especially in the milk powder market. More brands will focus on subdivided areas. Many dairy companies will compete in the children’s milk powder market, leading brands Get together and deploy A2 protein milk powder, and the adult milk powder market is highly competitive.

  In the milk powder market, on March 6, 2020, Abbott announced the launch of the 3-7 year old Jingzhi 4-stage organic milk powder for children; May 15, 2020, Wandashan’s children’s milk powder brand Zhuge Xiaojiang series formula milk powder was officially launched; on June 15, 2020, Ausnutria launched a new category:Nellido mother formula milk powder, Nellido child growth formula milk powder, and will enter in 2020. During the Expo, two Australian-made camel milk powders for adults were launched; on the evening of June 30, 2020, Wyeth released a new ultra-high-end infant formula milk powder brand, Zhenlang; on July 6, 2020, Feihe Dairy announced the promotion of nursing and learning The four types of”Zhuo Ran” series of children’s milk powder and formula milk products of Nursing, Zhuang Nu and Bei Hu; In July 2020, Mengniu Group announced the launch of Gabello Probiotic Goat Milk Powder; on August 5, 2020, Yilixin Live Shu Sugar meal base formula milk powder was launched; on August 8, 2020, Junlebao launched the first full-dimensional nutrition children formula milk powder-Xiaoxiao Luban Chuanweiai children’s formula milk powder; August 11, 2020, Wandashan The Dairy Industry officially released the organic A2 series of products and the functional products of bovine colostrum; on August 17, 2020, Newrich launched the new product of Zhiyoubei A2 milk powder; on November 6, 2020, Mengniu Yashili announced its infants Two new products of the formula goat milk powder brand Dora Lamb were first launched, including Xinchen children goat milk powder and cross-border goat milk powder; in November 2020, Feihe launched the Xingfeifan A2 series; December 12, 2020, Yili The group announced the launch of three new products-QQ Star Hazelnut Milk Powder, QQ Star Organic Milk Powder, QQ Star Goat Milk Powder, etc.

   In addition, in 2020, many dairy companies such as Bright and Yili have launched new products such as milk, flavored milk and yogurt. In July 2020, Bright Dairy announced the launch of a new product of Bright Eye Master Flavored Fermented Milk, and in the same month, it launched a new product, Youjia Yigu milk; in November 2020, Bright announced the launch of room temperature yogurt research, and in the same month, Bright Dairy’s vitality probiotic flavored fermented milk Listed. In July 2020, Yili launched a new product of Jianhu Mom’s children’s yogurt under its children’s brand QQ Star; on August 1, 2020, Yili Wei Ke Zi small bottle limited fruit flavor milk was launched; August 18, 2020, under Yili The organic milk brand launched the children’s version of Jin Xiaodian organic milk; in the second half of 2020, Yili launched Beihuan high-protein yogurt, and its yogurt brand Amushi launched new ginger-flavored yogurt. In December 2020, Wandashan Dairy officially launched the four new products of Heiwo series A2β-casein organic pure milk, low-fat high-calcium milk, organic pure milk and 3.8g pure milk.

   In addition to the above developments, in 2020, Mengniu Dairy has completed its cheese business layout. In July 2020, Mengniu Dairy and Arafozi Co., Ltd. (Arla) will be a joint venture A cheese company was established. Arla and Mengniu jointly created the Aishi Chenxi brand focused on cheese, which was operated by a joint venture. In October 2020, Coca-Cola and Mengniu Dairy jointly funded the establishment of Ke Niu Le Dairy Products Co., Ltd. to create a brand new low-temperature milk brand. At the same time, Mengniu Dairy’s capital operation has not stopped, strategically taking a stake in the”first share of cheese” Miaoke Landuo, becoming Miaike Landuo’s controlling shareholder. In November 2020, Yili’s Youran Animal Husbandry disclosed a prospectus on the Hong Kong Stock Exchange and plans to raise funds and go public. In addition, in 2020, Fonterra continued to reduce its holdings.

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