Benefiting from the rapid growth of the industry in the first half of the year and a good market foundation, domestic dairy companies in the third quarter continued the good growth momentum of the first half of the year. After the growth and gains of most companies in the first half of the year, in particular, they seized the sales climax before the September bimonthly period, the third quarter still maintained rapid growth.
As the weather gradually changes from summer to autumn, and the peak sales season in the fourth quarter is coming, popular products that have attracted many companies to follow suit in the first half of the year are gradually facing challenges. These popular products are still strong in the third quarter, but followers have swarmed in and faced the harvest of giants, and some regions have begun the price war.
1. In the third quarter, the price of raw milk stopped stabilizing, retail prices stabilized, and the company ’s gross profit increased.
The monthly report on the supply and demand situation of agricultural products released by the Ministry of Agriculture from June to August shows that the purchase price of raw milk in the third quarter of 2017 has stabilized after falling in the first half of the year. In the later period, the domestic weather will gradually cool, and raw milk production will recover, while the consumption of dairy products will gradually enter the peak season, and the supply and demand will support the steady price of raw milk.
At the same time, from the average retail price of fresh milk in cities monitored by the Ministry of Agriculture from June to August, the retail price is stable. This means that the majority of companies in the third quarter with the milk price kept low, the profit performance is even better.
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In the third quarter, the listed dairy companies' 2017 semi-annual reports were announced one after another. Most dairy companies achieved rapid growth in the first half of the year, and this trend continued in the third quarter. From the perspective of growth rate, Yili and Mengniu have achieved a growth rate of about 10%. Due to their large base, the two giants have also driven the entire industry to grow at a rate of about 10%. The most dazzling ones are Tianrun and Cody Dairy, which have achieved 38.81% and 50.65% growth rates respectively. This leap-forward growth rate is attributed to the innovative star products of the two companies-Tianrun Ecolean and Kedai Di pure milk (small white milk), this is also an important highlight product this year.
2. The wave of dairy industry coming soon
On September 29, the official website of the China Securities Regulatory Commission disclosed the "Prospectus" of New Hope Dairy, which was planned to be listed on the A-share market. In addition to New Hope Dairy, in the second half of this year, Sichuan Jule Food, Nanjing Weigang Dairy, Junyao Dairy, and Chongqing Everbright Dairy have announced their preparations for listing.
Renong Consulting believes that the regional listing of dairy industry is related to its current competitive environment. First-line brands Yili, Mengniu, Guangming, etc. have the advantages of sales network, financial strength, and marketing level. With the rapid growth of low-temperature dairy products in recent years, these companies have begun to pay attention and have partially implemented them to increase the market investment of low-temperature dairy products. We believe that future market competition will shift from normal-temperature dairy products to low-temperature products. By listing, the regional dairy industry can rely on the power of the capital market to establish regional market barriers to a certain extent.
3. The reshuffle of the milk powder industry began, and the goat milk powder market was heating up, becoming a fast-growing category
1. The registration list of infant formula milk powder is released, and the industry reshuffle begins
Since the implementation of the "Administrative Measures on the Registration of Formulas for Infant and Infant Formula Milk Powder Products" on October 1, last year, the milk powder formula registration system has been fully launched. In view of the excessive and excessive formulas of infant formula milk powder in our country, the formulas are randomly formulated and frequently replaced, the New Deal has put forward strict requirements on the qualifications and R & D capabilities of the enterprises that submitted the registration.
17 domestic companies including Yili, Beinmei, Feihe, Junlebao and 5 foreign brands including Wyeth, Abbott and Mead Johnson became the first batch of approved companies. These companies will be able to produce infant formula milk powder according to approved formulas. As of the third quarter, the State Food and Drug Administration issued a total of 13 batches of infant formula milk powder registration list, a total of 378 formulas have been registered. According to the New Deal regulations, starting next year, all infant formula products that have obtained the registration of the formula must be marked with a registration number in the label and instructions.
Since then, the infant formula industry shuffle has officially begun. In the future, OEM, processing and fake foreign brands will all be cleared from the market, and enterprises with difficult production, inspection and R & D capabilities will also be eliminated.
2. The goat milk powder market is heating up, and major dairy companies have entered the market
With the implementation of the new policy on milk powder, competition in the Chinese infant formula market has gradually become fierce. Some dairy companies have begun to "open up new paths" and have been involved in goat milk powder. As the market heats up, there is more room for growth in goat milk powder in the future. At present, children's milk powder only accounts for 6% -10% of the 70 billion milk powder market. In addition, in recent years, the nutritional value of goat milk powder not getting angry and well absorbed has been increasingly accepted and recognized by consumers.
For this potential category, major dairy companies have entered. In order to meet the market and channel needs, Jiabeite, a goat milk powder brand under Ausnutria, launched the first domestic goat milk powder for children this year, mainly for children over 3 years old. And more dairy companies are accelerating their entry into this industry. Ausnutria Dairy, Feihe Dairy, Yashili and other major domestic milk powder companies are accelerating the layout of goat milk powder. Starting from the end of 2016, Feihe Dairy has invested in building goat milk powder bases at home and abroad. Yashili, a milk powder business company under Mengniu Dairy, has also established a goat milk powder project department.
Fourth, large enterprises harvest popular categories and squeeze the low-temperature advantage of small enterprises
At the product level, from the perspective of the product dynamics of dairy companies in the third quarter, there are mainly the following points:
1. The popular category will be harvested by giants and it will become the norm. Original enterprises must reshape the category value
The development of an innovative category often goes through three stages: First, a few companies seize the consumption trend, lead the market, and cause other companies to follow up, so that the category grows into a popular category; second, when the category faces homogeneous competition Price wars are inevitable. In the end, large companies carry out market harvesting and most companies exit without profit. Third, after the price war, a few brands survived with large companies by reshaping category values. Although the overall market has shrunk, Enter a stable stage of consumption.
In the third quarter, the representative popular category of cooked yogurt began the price war in the northern region. With the follow-up of many dairy companies and the harvest of Yili and Mengniu on the market, this category has entered the stage of price competition. As early as the second quarter, Ruinong Consulting found that cooked yoghurt in a market in Northeast China had cooked yoghurt as low as 10 yuan / barrel. This phenomenon intensified in the third quarter and has spread to more regions.
The inevitable price war has posed a serious threat to the leader of the category, Snowfield Dairy. To this end, we see that Xueyuan has upgraded and revalued cooked yogurt products, advertised itself as "the inheritor of Mongolian yogurt craftsmanship that began in 1886," and emphasized "authenticity" in its promotion.
From the market response of Xueyuan, we can see that popular categories are harvested by giants, and SMEs participating in market competition need to provide consumers with unique and valuable products on the product value level, and then shape themselves Brand value, this is the way for SMEs to compete.
2. Low-temperature dairy products are valued by giants, squeezing the advantages of small and medium-sized milk
Pasteurized milk has always been an important category of small and medium-sized dairy companies separated from dairy giants due to its freshness and short shelf life. It is also an advantageous category compared to giants.
On the morning of July 11, Mengniu and Hyundai Animal Husbandry launched a high-end room temperature milk "Xianyu" with the concept of upgrading to fresh milk. The packaging resembles the shape of a refrigerator, implying that Modern Dairy ’s fresh words protect the freshness of milk like a refrigerator, and accurately demonstrates the modern 2-day “fresh lock” production process. Although this is a normal temperature milk, the concept is "fresh".
Mengniu Dairy will process low-temperature products such as pasteurized milk and yoghurt on behalf of modern animal husbandry, with a total value of more than 5 billion yuan in three years, which means that giants have no barriers to producing pasteurized milk, and the advantages of small and medium-sized enterprises in the fresh milk category will be huge challenge.
This means that after completing the layout of low-temperature yoghurt, dairy giants start to squeeze SMEs whose main demand is "freshness" and challenge their traditional advantages in the fresh milk category. This cannot but attract the attention of SMEs.
Fifth, the e-commerce channel has become the focus of huge power, and the yogurt machine has become the highlight of channel innovation
1. Dairy giants step up efforts to deploy e-commerce
On July 12, Alibaba Group reached a strategic cooperation with dairy giant Yili, becoming another strategic partner to announce innovative retail with Tmall.
On July 18, Yili and Jingdong Supermarket signed a strategic cooperation agreement to help Yili achieve the goal of accumulating sales of more than 10 billion on the Jingdong platform from 2017 to 2020, with a compound annual growth rate of 66%.
On September 7, Mengniu Group and Alibaba Group signed a comprehensive strategic cooperation agreement between Mengniu and Tmall. The agreement covers everything from sales to logistics, from data to brand. This veteran dairy company is trying to use the power of Tmall's new retail to explore more possibilities.
The rise of e-commerce is constantly changing the pattern of the retail industry and has brought tremendous impact to all walks of life. The fourth retail revolution is coming. This retail revolution is a revolution based on Internet e-commerce and surpassing the Internet. It will bring humanity into the era of intelligent business. The dairy giants represented by Yili and Mengniu are keenly aware of this change, grabbing the ground first, laying out ahead of time, and walking to the front of embracing the Internet through cooperation with large e-commerce companies such as Alibaba and JD.com.
From another perspective, when traditional retail channels have been strengthened and cannot be shaken, Internet e-commerce is becoming the next bastion for the dairy industry's huge efforts.
2. Yogurt machine has become the highlight of channel innovation
In the third quarter, the yogurt machine represented by Shengmu Yogurt Machine became the new highlight of dairy channel innovation. Shengmu Yogurt Machine has two main characteristics: first, small size, relatively loose delivery environment requirements, flexible delivery; second, fast and convenient, only 7 seconds to produce live bacteria cold fresh yogurt that is more beneficial to human absorption and digestion , Without losing the pure organic milk fragrance. Since Shengmu launched the yogurt machine in 2016, it has developed rapidly and has now become an important business segment of Shengmu.
The good development momentum of Shengmu Yogurt Machine is attributed to in-depth insight into consumer consumption scenarios, various Internet cafes, movie theaters, cafes, restaurants, gas stations, campuses, milk bars, commercial centers, schools, hotels, enterprises and institutions They are all places to consume ready-to-drink yoghurt, and these places can be places to put yoghurt machines.
In addition, the yogurt machine as a sales channel has the advantages of closedness and stable sales; at the same time, it also has a self-media function, which also provides a good reference for the channel innovation of the majority of SMEs when facing competitive pressure.
Sixth, the micro-innovation of dairy marketing is worth paying attention to
1. The innovation of dairy giants in channel promotion is worth learning by SMEs
The competition for traditional retail terminals is becoming more and more fierce. The display and media resources of the terminals are very limited. How to break through the restrictions and make full use of the terminal space is a problem in front of all enterprises. Dairy giants' insight into details in channel promotion is worth learning by all SMEs. In the third quarter, we found that more and more wall-mounted refrigerators of Yili and Mengniu appeared in traditional retail terminals.
The biggest advantage of wall-mounted freezer is that it does not take up floor space, and makes full use of the space on the wall in the retail store. It is precisely because of space saving that the cost of investment is relatively low. Due to a certain installation height, the wall-mounted freezer is also more conducive to product display and display.
When SMEs put precious resources on the market, do they think they should learn from the giants in details?
2. Factory tour is still a promotion tool for dairy companies
The third quarter falls on summer vacation. The northern region has a particularly pleasant climate, which is the best time to travel. Many dairy companies also seized this favorable season and stepped up efforts to carry out factory tour activities.
Dairy companies carry out factory tour activities, and consumer experience is the key. The main participants of factory tour activities are young children, and their consumption tendency determines their parents' purchasing choices; at the same time, they are also future consumers. Therefore, in addition to the need to fully demonstrate the company's technology, equipment and other advantages, the factory tour also needs to create a favorite atmosphere for young children and set up a number of games for consumers to participate in interactively. With the development and popularization of VR technology, many dairy companies have begun to use this high-tech achievement to add color to factory tour activities.
Conclusion
In the third quarter of 2017, the dairy giants withdrew from normal-temperature dairy products, began to focus on nurturing low temperatures, and adopted a rapid follow-up strategy. The development of small and medium-sized dairy companies faced more uncertainty. From the market point of view, the growth of dairy companies this year has been basically finalized. Those that can achieve growth in the first three quarters can still achieve some gains in the fourth quarter. Those lacking growth in the first three quarters will find it more difficult in the fourth quarter. The sales scale of various enterprises this year has basically been finalized. Enterprises should actively plan for next year's development, from marketing strategic planning to marketing strategy implementation plan, from product innovation direction to channel operation strategy, from price competition to promotion strategy, From team building to internal and external management, the company still has a lot of work to do. Plan ahead to face competition.
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