China Food

Sudden strategic evaluation of baby nutrition business in China! Mead Johnson China responded!

Just now, Mead Johnson’s parent company, Li Jieshi, announced in its financial report in 2020 that it will conduct a strategic assessment on the infant formula business in Greater China. The decision is part of Lijie’s plan to adjust its product portfolio to seek higher growth. Xiaoshidai noticed that in the performance conference call just held, Laxman Narasimhan, CEO of lijishi, mentioned that China’s milk powder business is facing many challenges, but there are also many bright spots. In its financial report, Li Jieshi said that the strategic assessment has not yet come to an overall conclusion and is committed to improving the operational performance of the business.

In response, Mead Johnson China said today in response to the inquiry of snack agent that the strategic assessment will not affect the normal business operation of the company, and the business of the company will proceed as usual. The nutrition business in Greater China has always been the focus of Lijie group, and the team in Greater China is also excellent. This assessment aims to release the growth potential of Mead Johnson, a great brand. China’s infant formula industry is in the stage of integration. This assessment is only a reflection of our active response to market changes.


下面,我们来一起看看更多消息。

Strategic assessment

Let’s take a look at the latest financial report. According to Laxman Narasimhan in his earnings report, the company is taking decisive action to strengthen its product portfolio, including a strategic assessment of the infant formula business in Greater China. Meanwhile, Lijie has agreed to sell the foot care brand Shuangjian and acquire biofreeze. These decisions will position the product portfolio in faster growing brands and markets.

Laxman Narasimhan, Global CEO of lijishi group


不过利洁时也强调,对大中华区婴儿配方奶粉业务进行战略评估一事尚未得出整体结论,将酌情提供进一步更新。小食代翻查财报留意到,这块业务占利洁时营养品业务的25%,占该集团营收的6%左右。

据利洁时2020年财报显示,其营养品业务全年净收入为32.87亿英镑(约合人民币290.90亿元),同比增长持平。该公司指,美国婴幼儿营养品业务实现增长,由于消费者对健康和免疫力的关注增加, Airborne品牌增长超过100%。不过,这被大中华区婴幼儿营养品业务的下滑抵消。


对于大中华区业务的下滑,利洁时称,受到了中国香港和中国内地之间的跨境贸易活动持续限制的不利影响。在中国内地,去年前几个季度的市场份额表现稳定,但被充满挑战的第四季度所抵消。正如预期,第四季度销售受到价格竞争加剧的不利影响,特别是在大型母婴商店渠道。

“我们与跨国同行继续保持良好的竞争态势,并在高端和超高端市场中实现份额增长。但是,高端化速度放缓、本土品牌带来的更大竞争预计将在短期内减少增长机会。”利洁时称。

小食代留意到,在今天下午的业绩会议上,Laxman Narasimhan也提到了这一业务的亮点和挑战。他表示,中国婴幼儿营养品业务显示出强大的基础执行力,线下执行熟练度更强。此外,创新和新品进展良好。就份额而言,美赞臣在线上渠道和社交电商渠道的份额均实现增长,在中国内地的整体份额也保持稳定。


不过他也指出,奶粉业务面临不少挑战,包括需要解决的结构性挑战、香港口岸关闭时间长于预期且尚未确定何时重开、本土竞争对手大力投资以推动增长、疫情对出生率的影响等等。

利洁时在财报中表示,大中华区婴幼儿营养品业务仍是该集团关注的重点领域。”我们致力于改善运营表现并继续进行战略选项的评估和分析,将在2021年提供进一步的更新。”该公司称。

Looking to 2021, Lijie expects that in the short term, the low birth rate caused by the pandemic in 2020 and 2021 will affect the market growth of its infant formula business.

Development in China

Xiaoshidai once introduced that lijieshi officially completed the acquisition of Mead Johnson on June 15, 2017. The $17.9 billion deal allowed Lijie to enter the baby food industry for the first time. The reason for the acquisition of Mead Johnson is that Lijie Shi announced in 2012 that it would transform itself into a consumer goods company focusing on “healthier life and happier family”, and has been adjusting its product portfolio accordingly. In May 2017, Lijie also pointed out in a shareholder’s letter that the acquisition of Mead Johnson is in line with the company’s strategy of focusing on consumer health and investing in strong brands with attractive growth prospects, and that Mead Johnson will help the company deepen its relationship with millions of parent consumers.


时任利洁时CEO的Rakesh Kapoor也曾指出,婴幼儿营养业务正好契合了利洁时的消费者健康理念,而且这是一个不断增长的庞大业务,其经营地区与利洁时在新兴市场中发展壮大的战略也非常吻合。

After the acquisition of Mead Johnson, Lijie first reorganized the company and divided its business into two new business units: “Lijie health” (including Mead Johnson) and “Lijie family health”, hoping to help different business units focus more on their own business, from innovation, brand development to customer supply. At the same time, Lijie also put forward two major directions for Mead Johnson, namely, “enhancing innovation” and “strengthening e-commerce”. Subsequently, Mead Johnson began to reorganize the Chinese e-commerce team, appointed a new business leader, strengthened cooperation with e-commerce giants such as Jingdong and tmall, and signed a strategic cooperation agreement of “2018 joint business plan” with Alibaba to increase the layout of new retail channels. According to the data disclosed by the senior management of lijieshi at the first quarter analysts’ meeting in 2019, before its acquisition of Mead Johnson, the latter had 15% of its business online in China, which had risen to more than 25% in 2018.

In addition, Mead Johnson has launched channel reform for domestic third and fourth tier cities since 2018. Through establishing a series of partnerships with Alibaba, Jingdong and other platforms, Mead Johnson strives to promote channel sinking, sell products to offline mother and baby stores in low tier cities in China, and has expanded its network to more than 250 cities. At the same time, Mead Johnson has successively launched A2 protein milk powder, grass feed milk powder and other new products in the Chinese market, and introduced Mead Johnson formula liquid milk, anminjian and other overseas products through cross-border e-commerce channels. Laxman, the current CEO of Lijie, said in May last year that the construction of e-commerce channels is still the focus, and that there are still plans to launch new milk powder products in China in the future.

Foreign comments

According to the report of Peng Bo today, last year, Li Jieshi reduced the goodwill of Mead Johnson business by 5 billion pounds, and today it reduced the goodwill by 985 million pounds (about 8.717 billion yuan). In the past few years, China’s infant nutrition products accounted for about 6% of the company’s total sales, which was about 14 billion pounds. The financial times today quoted analysts as saying, “we are glad to see the new management take quick action on this issue that has lasted for several years.” According to the report, Lijie is betting on consumers’ continuous attention to cleaning and its B2B family health department. The company believes demand for health products will continue to grow, but also said it will take “decisive action to manage the product portfolio more broadly.”.


小食代留意到,法国费加罗报此前消息称,激进投资者Artisan Partners的外部顾问 Jan Bennink曾建议,达能在重拾增长后还应该再在医学营养品和婴幼儿营养品领域进行重要收购,因为这块业务有机会超车雀巢。为此,他建议达能收购美赞臣。

However, Nestle does not seem to give up the title of the world’s largest milk powder manufacturer. Xiaoshidai also introduced it. The CEO of Nestle said last week that he firmly believes that the nutrition business can become a growth contributor in the medium and long term. It is also a part of Nestle’s DNA and will not give up. He pointed out that although Nestle sold Yinlu peanut milk and porridge business, it will not repeat itself in the nutrition business in the Chinese market.  

Snack generation will pay close attention to the follow-up progress of lijishi assessment.

Pay attention to “xiaoshidai” (wechat: foodinc) “and reply to” lijieshi “and” Mead Johnson “to watch the wonderful news.

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