Imported milk powder has collectively fallen into a "low growth rate", and domestic milk powder can better cater to market demand

The industry reshuffle is accelerating, can imported milk powder continue to "sell"?

In 2020, when the epidemic is sweeping the world, major milk powder manufacturers are facing considerable growth challenges, especially foreign brands, which have been hit hard.

It can be seen from the financial reports of foreign dairy giants such as Danone, Abbott, and Nestlé that their milk powder business has declined to varying degrees, facing the dilemma of a narrowing of the Chinese market share.

Purchasing channels have become the main cause of dragging down the performance of imported milk powder

Purchasing channels have become the main cause of dragging down the performance of imported milk powder

It is understood that a2, Danone, and Bubs are all trapped in the quagmire of "cold purchasing channels".

Judging from the financial reports disclosed by the above three:

a2 In the six months ended December 31, 2020, it achieved total revenue of 677.

4 million New Zealand dollars, a year-on-year decrease of 16.
0%.
Among them, the sales of infant nutrition products with English version and other labels were 103.
5 million New Zealand dollars, a decrease of 35.
5 %;

Danone achieved sales revenue of 23.

6 billion euros in 2020, a year-on-year decrease of 1.
5%.
Among them, the sales of the professional special nutrition business segment where Aitamei is located fell 0.

For the six months ended December 31, 2020, Bubs' loss increased by 71% to A$12.

9 million, and revenue fell 33% to A$18.
29 million.

Talking about the reasons for the performance loss, the above three dairy companies all attribute the problem to "the interruption of the purchasing agent channel caused by the new crown epidemic and the impact of cross-border e-commerce channels.

"

Source: Network

After understanding, it is found that Daigou and cross-border purchases are one of the important sales channels for Danone, a2, and Bubs in the Chinese market, and they have become engines that drive corporate performance.

Earlier, Danone’s Chief Financial Officer Cécile Cabanis revealed to the outside world that at present, direct channels (general trade channels, maternal and infant stores, and e-commerce) account for about 60% of China’s milk powder business; indirect channels (cross-border purchases, purchasing agents, etc.

) Etc.
) Revenue accounts for 40% of Danone’s infant nutrition business in China.

Similarly, many of the high performance of a2 in the past have also come from purchasing channels.

UBS Group has analyzed that personal purchasing agents and enterprise-level purchasing agents accounted for 37% and 20% of a2 Australia and New Zealand milk powder sales, respectively.
In addition, Bubs, which has been active in cross-border e-commerce platforms and purchasing channels, let alone.

Although the purchasing channel can be a way for companies to open up sales, increase popularity, and seize the market, the epidemic has also made it clear to the public that the high-selling products in this channel hide high operating risks.

Under the prevention and control of this epidemic, many countries across the country have adopted methods such as closing border ports and suspending some inbound flights, which has led to a sharp drop in the number of overseas inbound and outbound people, and has caused a huge impact on retail trade companies that mainly rely on purchasing channels.

Source: Network

The decline in performance is only one aspect, and more importantly, the poor performance of the market is behind it.

The decline in performance is only one aspect, and more importantly, the poor performance of the market is behind it.

This means that, in the case of enterprises relying too much on the purchasing agent channel, once there are problems such as logistics and obstruction of exit, the enterprise will face the risk of forced surrender of market share.

It can be seen that a2, Danone, and Bubs are not suddenly broken.

In addition, the impact of cross-border purchases and purchasing agents on enterprises continues.
Danone and a2 both said that although the business of cross-border sales channels has improved on a month-on-month basis, they are still affected by continuous border epidemic prevention measures and travel restrictions.

In fact, in addition to purchasing agents, these three dairy companies also need to face other problems.

For example: Wyeth, Nestlé, Danone, Mead Johnson, Junlebao and other dairy companies have successively deployed A2 milk powder, and the monopoly of A2 has been broken.
Then how will it shape its core competitiveness in the future? In 2019, a joint venture company was established with Beinmate.
How can Bubs, which is used for product sales and promotion, break the situation when its performance is sluggish and its market share is not high?

Danone has set a recurring operating profit margin higher than 15% in 2022.
The medium-term goal is to increase sales by 3% to 5% year-on-year.
The recurring operating profit margin will remain at a double-digit flag, and it will report in the third quarter of last year.
After the release, it began drastically reshaping major businesses, but after the sku cut and high-level turmoil, can Danone successfully achieve its goals?

Source: Network

In addition, recently, a2 and Danone have announced changes in their internal executives.

Among them, a2 recently appointed Bessie Lee as the new independent non-executive director after announcing that Jesse Wu, a director in charge of China business, will leave last year; Danone also recently announced that it will separate the positions of chairman and chief executive officer.
Danone has started the process of recruiting a new CEO, and Fan Yimou will continue to serve as the non-executive chairman.

In fact, in the past six months, many dairy companies have experienced turmoil in their senior management, from Bao Xiufei to Wu Songhang to Zhu Dingping.

There is a saying on the football field: changing coach is like changing knife.

This is even more true if you put this sentence in the fast-moving food consumer industry, which needs to face the ever-changing consumption trend at all times.

Regarding the above-mentioned personnel changes, some people in the industry speculate that it may be related to poor performance, but can substitutions change the status quo?

Mei Su Jiaer and Mead Johnson were strategically evaluated successively

Mei Su Jiaer and Mead Johnson were strategically evaluated successively

Following the online report that Mei Su Jiaer was about to be sold, Mead Johnson was also caught up in the strategic assessment of its parent company, Reckitt.
According to the recent financial reports released by these two dairy companies:

Friesland’s 2020 revenue fell by 1.
4% year-on-year to 11.
14 billion euros and 1.
4% year-on-year, and its annual profit fell by 71.
6% to 79 million euros.
Among them, the income of the professional nutrition products of Mesocare dropped to 1.
119 billion euros;

Mead Johnson’s parent company Reckitt’s sales in 2020 was 13.
993 billion pounds, an increase of 11.
8%; while Mead Johnson’s nutrition business net income was 3.
287 billion pounds, a flat year-on-year growth, but the decline in the infant nutrition business in Greater China offset the Airborne brand The growth brought by more than 100% results.

Regarding the pressure on the growth of the milk powder business, both Friesland and Reckittmann said it was affected by factors such as cross-border trade restrictions in Hong Kong, China and currency conversion.

Due to poor performance, Li Jie Shi announced that it would conduct a strategic evaluation of its infant formula business in Greater China.

Prior to this, Laxman Narasimhan, the global chief executive of Reckitt, had impaired the goodwill of Mead Johnson of 5.
037 billion pounds.

The financial report shows that the infant powder business in Greater China accounts for 25% of Reckitt’s nutrition business and about 6% of the group’s revenue.

Regarding this move, some insiders speculate that Li Jie may consider selling Mead Johnson.
Subsequently, Mead Johnson China responded that the strategic evaluation will not affect the company's normal business operations, and that the company's business is proceeding as usual.

But in fact, Mead Johnson hid many problems.

At the end of last year, Mead Johnson was also exposed to corruption within the company.

According to media reports, the senior executives of Mead Johnson took advantage of their positions to embezzle gifts from members, involving a total of 33 million yuan.

In addition, from 2008 to 2013, Mead Johnson paid US$2.
07 million to health professionals in public hospitals in China, and used this opportunity to make a profit of US$7.
77 million.
The US Securities and Exchange Supervisory Commission identified it as suspected of bribery and fined it.
12 million U.
S.
dollars.

Whether it is internal corruption or external bribery, what ultimately points to is the chaos in the Mead Johnson channel and the weak internal management.

And Friesland’s Mei Su Jia Er is also involved in the price change of the lid.
It is reported that there are currently two different specifications and prices of the Mei Su Jia Er series formula milk powder on the market, each of which is 900g of gold.
Installed version and 800g NOVAS exclusive version.

Comparing the two, it is found that the two use the same formula registration number (National Food Note YP20175006), and there is no difference in the list of nutritional ingredients, except that the lid and specifications are changed, but the price is extremely different.
No, the highest price increase of NOVAS Premium Edition 1~3 is nearly 56%, while the weight has been reduced by 100g.

In this regard, the author also contacted the official customer service of Mei Su Jiaer, he said that it is because the mineralization level of casein will not be reflected in the formula.

However, just changing the mineralization level of casein, reducing the volume by 100 grams and increasing the price by up to 56%, made industry insiders speculate that this might be a disguised way of saving its decline in performance.

But it is worth thinking about whether it is worth sacrificing consumer rights to reorganize performance?

Wyeth and Abbott defeated the Chinese market

Wyeth and Abbott defeated the Chinese market

Wyeth and Abbott, two of the four traditional fans who were once dominating the dairy industry, have less optimistic performance.

The financial report shows: In 2020, Abbott and Wyeth’s infant nutrition business continued the decline since 2019.

It is reported that in 2020, Abbott will achieve sales revenue of 34.
608 billion U.
S.
dollars and net profit of 4.
495 billion U.
S.
dollars.
The profit alert mainly comes from the strong growth of its diagnostic business in the past year.

While focusing on the nutrition business, total revenue was US$4.
127 billion, a slight increase year-on-year, but the international pediatric nutrition sales of milk powder fell by 4.
1%, because the Greater China region offset its pediatric products in the United States and many other countries Sales growth.

This also shows that Abbott’s milk powder business has experienced a serious decline in the Greater China region.

It is worth mentioning that Abbott has been on the regulatory "black list" for publishing illegal advertisements almost every year.

On January 16, the Shanghai Municipal Market Supervision Administration announced that Abbott was fined 116,000 yuan by the Xuhui District Market Supervision Administration for publishing health food advertisements in violation of Article 18, Paragraph 1 (2) of the Advertising Law.
, Order to stop issuing administrative penalties.

In October last year, Abbott released a video ad on Douyin without reviewing the advertising content of its special medical food Xiaoansu by relevant departments, violating Article 46 of the "Advertising Law", "Issuing medicinal materials, medicines, medical devices, and pesticides.
" Advertisements for veterinary medicines and health foods, as well as other advertisements that are subject to review by laws and administrative regulations, should be reviewed by relevant departments before publishing.
Without review, they may not be published.
" 194.
81 was punished by the Shanghai Market Supervision and Administration Bureau.
A fine of RMB 10,000 and was ordered to stop publishing the advertisements involved and eliminate the impact within the corresponding scope.

However, as a company that has entered the Chinese market for many years and is not a small company, Abbott has repeatedly violated the advertising law.

This can't help but make people wonder whether the corporate legal awareness is weak or the laws and regulations of our country are not taken into consideration at all?

Jack Ma once said: "Word of mouth" is far more important to a company than "brand.
"

Jack Ma once said: "Word of mouth" is far more important to a company than "brand.
"

However, Abbott, which has been caught in scandals due to propaganda issues for many times, does not seem to realize its importance.
This may be one of the reasons why Abbott has failed to withdraw from the Chinese market.

，S26。

，，1:3。

，“”。

：20201-11，；，，、、。

，。

：20201-111281，1522，20191570，1500。18.
4%，1.
5%。

，。

，。

，、，，1-11，20%，、、。

、、，，，？

，，，。，，，，。

，，“”，，，，、。

，

，

，。，、“”，，，“”，、、、。

，“”，，，→→，；“”，→→→，。

“”，。2014，BRC A+IFS，“”，。

，

，

，。，，、，——，。

，+++14，，，；，；Bb-12、HN019，；14、DHA、ARA、、、，。

，&A2，A2β-，OPO+CPP，；，，INFAT9.
0OPO。，OPOOPO，，，！

：，

：，！

xianjichina.
com">，