China Food

Meiji is fierce!

With the announcement of a number of overweight strategies in China within a year, Meiji dairy has recently become the focus of public opinion.

Not long ago, Japan’s largest dairy company announced that it would establish a new production base in South China, which would cover milk, yoghurt and candy.

After the announcement, the Shanghai Branch of Meiji dairy (Suzhou) Co., Ltd. (hereinafter referred to as “Suzhou Meizhi”) disclosed for the first time the detailed planning of its production base in South China when it was inquired by the snack agent a few days ago. At the same time, it also talked about more ideas for the future development of the Chinese market.


It is worth noting that Meiji dairy recently also disclosed the latest news that it will cooperate with French food giant Danone to “form a team” to sell infant formula food in Europe, which also makes whether the milk powder business of the company will return to the Chinese market in the future.


China becomes the most important region


Meiji Shanghai Branch of Suzhou told xiaoshidai that the company’s new base in South China is mainly to ensure sufficient production capacity and improve product penetration in the South China market.


“As the key policy of our company, we aim to establish the growth foundation of overseas business. In particular, in the 2020 medium-term business plan, China will be positioned as the most important region to carry out the business. ” The company said.


In its view, the key to achieving this goal is to solve the problem that it does not have milk or yogurt production plants in southern China.

Meiji Suzhou factory


On the one hand, compared with the eastern area covered by Meiji in Suzhou, the company’s dairy supply in the south is insufficient. On the other hand, with the development of snack business in the Southern District, the existing production capacity of Meiji fruit making in Guangzhou began to appear insufficient.


“The establishment of a production company in Guangzhou can bring our products to consumers who have not been able to enjoy the service before, and we think it can also make Meiji’s brand further penetrate.” The company said.


When talking about the production planning of the new plant, the Shanghai Branch of Meiji in Suzhou disclosed to xiaoshidai that the South China production base mainly manufactures and sells milk, yogurt and chocolate biscuits, “but the specific products to be manufactured and sold need to be discussed in combination with the business strategy”.


In addition, in order to ensure an adequate supply of raw materials, raw milk used in the new base will be purchased from the farms near the factory and from the pastures in East and central China. At the same time, Meiji’s previous stake in Australia and Asia Ranch “is also a choice.”.


“Other raw materials will also be purchased from China and abroad.” The company said.


According to Suzhou Meiji’s previous notice, the newly established South China production base is expected to be put into operation in 2023. After the completion of the South China base, the existing Meiji Guangzhou ice cream and candy factory will remain.

Three times in a year


In fact, the investment in the construction of the new production base in South China is only the latest measure of Meiji dairy to “speed up enclosure” in China.


Xiaoshidai introduced in April this year that Meiji dairy announced three additional investments in China’s dairy business in less than a year, including the acquisition of 25% equity of AoYa, known as the “largest acquisition in Meiji history”, the expansion of Suzhou factory and the establishment of its first Huabei factory. The total investment of the latter three projects is about 4 billion yuan.


Behind the above series of layout, the important reason for the company’s increasing investment in the Chinese market is that China has become the growth engine of its overseas food sector.


However, the company’s net sales of Xiaohua food decreased by 31.0% in the year to July 2020.


“Net sales of (food) business in the US and China increased year on year. Thanks to the positive performance of (Overseas) subsidiaries, the operating revenue also increased significantly year on year. ” The report said.


Xiaoshidai also noted that in the analyst meeting held in response to the above financial reports, Meiji executives also specifically talked about the performance of the Chinese market.

“We think the growth of low-temperature fresh milk and yogurt in China is very good. The epidemic has not had a great impact on our consumer end products, and the sales of our e-commerce products are also recovering. We are looking forward to further growth through the expansion of the Suzhou plant production line in the spring of 2021 and the opening of the Tianjin plant in 2023. ” He said.


Looking ahead to its overseas food business in 2021, Meiji dairy said in its financial report that it would accelerate the expansion of production capacity and sales capacity in the Chinese market, and explore the possibility of new business.


Sports nutrition


For Meiji China, in addition to accelerating its expansion, there is still a “real” KPI to be completed in the coming year of 2021.


In the 2020 year’s mid year business plan, which was released earlier in the Meiji dairy industry, it was discovered that in the 2021 fiscal year (March 31, 2021), the Chinese mainland’s food business plan achieved 23 billion yen (now about 1 billion 525 million yuan) sales target.


That is to say, the Meiji dairy industry has achieved nearly double growth in Chinese mainland food sales in three years. In 2018, the sales volume of Meiji in Chinese mainland was 11 billion 900 million yen.


To achieve these goals, the company will expand its already well-known product lines in Chinese mainland market, such as milk, yogurt, candy and ice cream, and develop e-business designed for local needs, and will enter into sports nutrition.


Suzhou Meiji Shanghai branch also disclosed the latest measures in sports nutrition when replying to the inquiry of snack food agents, saying that it plans to carry out sports nutrition with whey protein powder as the center in 2020.


It is worth noting that in addition to the “big” increase in the Chinese market, Meiji dairy is also ready to “team up” with Danone to sell infant formula food in the European market.


Snack food agents noted that the company announced in May this year that it had signed a memorandum of understanding with Danone specialty special nutrition, and the two sides planned to cooperate in the production of sheet infant formula for the European market.


According to Meiji official website of Japan, the flake production technology improves the portability of infant powder


According to the memorandum, Meiji dairy will provide proprietary sheet production technology, and the products will be formulated with Danone infant formula and produced in Danone’s European factory. After completing the market test which is expected to last about one year, the two sides will evaluate the next step of continuing and expanding the cooperation relationship.


However, in response to a question from the snack agent on whether the above milk powder products will be introduced into the Chinese market, Meiji Shanghai Branch of Suzhou only said that “the problem involves the company’s future strategy, which is not suitable for disclosure for the time being”.

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