China Food

From “taking advantage of the situation” to “gathering strength”, dig deeply into the story behind Yili’s overall leadership

The development of enterprises is like pushing a snowball to the top of the mountain. If each plate plays its own role alone, the snowball will never reach the highest point. Only on the basis of making each plate bigger and stronger, give play to its own advantages in resource integration and allocation, and condense all resources into one force, can enterprises achieve self breakthrough. At present, Yili is gradually entering the sprint stage of the new development cycle.

 

Recently, Yili’s “2022 Global Partner Conference” was officially launched with the theme of “surpassing with one heart and gathering potential to shine in the future”. It is understood that Yili’s five business departments, including liquid milk, milk powder, yogurt, cold drinks and cheese, have held more than 40 regional conferences to summarize the outstanding achievements made in 2021 and look forward to the market objectives and strategic planning in 2022.

 

全球合作伙伴大会

伊利取得了怎样的成绩?

 

Not long ago, the performance report released by Yili showed that in the first three quarters of 2021, the company’s total operating revenue was 85.007 billion yuan, a year-on-year increase of 15.23%; The net profit was 7.967 billion yuan, a year-on-year increase of 31.82%, and has exceeded the net profit level of last year. Among them, the sales of Yili Jindian in the first three quarters maintained a growth rate of more than 30%, and the organic growth rate of Jindian exceeded 50%; Amhersh’s market share reached a new high. At the same time, Yili’s innovative product track also showed good growth, with cheese, mineral water, low-temperature milk, formula milk and so on all maintaining rapid growth.

 

 

According to the research of Anxin securities, the overall net interest rate of the dairy industry in a single quarter in the third quarter of 2021 was less than 6%, while the net interest rate of Yili in the same period was 9.41%. Compared with the industry, Yili’s profitability is prominent.

 

In fact, Yili’s high-speed growth in performance this year has begun to take shape since the beginning of the year. According to the channel survey data, during the Spring Festival in 2021, Yili has excellent dynamic sales in many regional markets, and even its white milk products are seriously out of stock. The inventory of high-quality products is basically 0, and anmushi is in short supply. After adjustment, Jindian and anmushi, a number of Yili dealers in China, increased by more than 30%.

 

Throughout the year, in the face of macroeconomic uncertainty and the continuing impact of COVID-19, Erie still fulfilled its commitment to last year’s “100 billion era after opening up” in 2021.

 

It is worth noting that at this global partner conference, the outstanding performance of Yili’s business units continued to lay the foundation for Yili’s overall high-speed growth.

 

 

It is understood that in the first three quarters of this year, several business segments of Yili continued to grow rapidly and maintained the leading position of China’s dairy industry. Among them, Jindian has been the world’s first organic brand for four consecutive years, leading the industry average in growth rate; Normal temperature milk anmushi also broke the situation against the trend, and the market share continued to expand, reaching 65.1%.

 

Changqing, a subsidiary of the yogurt business division, continued to be the first camp of low-temperature yogurt and ranked first in the brand power of the industry for six consecutive years.

 

The growth rate of jinlinguan milk powder in all channels of the milk powder business division ranks first in the industry, and the growth rate of Zhenhu mother and baby care channel exceeds 50%; The performance of sainamu and Youzi lambs doubled; Yili adult milk powder has the first market share for 4 consecutive years, and the category share of middle-aged and elderly milk powder has the first for 9 consecutive years.

 

The cold drinks division achieved double-digit growth in sales revenue, leading the industry for 29 consecutive years, and its sales volume ranked first in the industry. Among them, the whole line of Zhenxi brand was upgraded, and the sales of four first innovative products exceeded 300 million.

 

In the first three quarters, the overall retail end of Yili cheese business increased by 180% year-on-year. The cheese division led the category development with continuous product innovation, and the sales revenue doubled. Among them, the sales of Yili children’s cheese stick products increased by nearly 200% year-on-year, and the market share increased significantly.

 

Based on the steady growth of each business unit, Yili has further accelerated its actions in category layout and strategic cooperation since this year. The company first registered and increased the capital of yijiahao cheese, and then recently announced its ownership of Aoyou dairy, a listed company in Hong Kong stock market, overweight infant formula and nutritional health track. The investment in Aoyou is also the largest merger and acquisition of China’s dairy industry in recent years.

 

It is worth noting that at the beginning of this month, Yili officially released the non-public offering report, raising a total of about 12.047 billion yuan, further consolidating the production capacity advantages of liquid milk, infant formula and other categories. For the landing of this fixed increase, Soochow Securities said in the research report that under the change of the external environment and the active pursuit of internal growth, this fixed increase in production capacity and efficiency provide important support for the company to consolidate its competitive advantage and move towards a health industry group.

 

 

从“三强”到“老大”

伊利业绩增长的逻辑是什么?

 

“Marching into the top three global dairy industries in 2025” and “achieving the first global dairy industry in 2030” are the medium and long-term goals put forward by Yili.

 

What needs to be faced up to is that in order to achieve the strategic objectives of 2025 and 2030, the incremental requirements for Yili’s income are very high. A person in the industry said that Yili should achieve the top three global goals in 2025 and basically maintain the double-digit growth rate of revenue from 2021 to 2025; To achieve the world’s No. 1 goal of 2030, revenue should at least double the current level.

 

From the perspective of sustained high growth and leading subdivided industries, Yili still has great hope to successfully complete the 2025 and 2030 goals.

 

First of all, the leading effect of the dairy industry is accelerating, “industry leading” is one of the largest enterprise development dividends. Under the fierce competition of liquid milk in China, Yili’s clear strategy, high-quality management level and management can undoubtedly continue to broaden the moat. Yili’s core management team has profound qualifications, and all members of the team have more than 20 years of working experience, most of which have experienced precipitation from the bottom workshop to the management. This stable implementation has also made Yili a breakthrough in many categories, such as lactic acid bacteria, pet milk, etc.

In order to achieve high-speed organic growth of performance, Yili needs to focus on cultivating potential new categories such as milk powder, cheese and mineral water while consolidating its basic market.

 

On the one hand, in terms of the stock of the enterprise, the continuous volume and iteration of old and new items of normal temperature categories are still the solid backing for the long-term development of Yili.

 

As the concentration effect of normal temperature milk market is further highlighted, the share of Yili pure milk is becoming more and more stable. However, there is still room for upgrading basic white milk in the future. For example, the overall dynamic sales of Zhennong high calcium milk is better than other categories, such as Tetra Pak brick and boxed milk, which has reached a volume of several billion yuan; High quality liquid milk not only has a large volume, but also realizes high-speed growth.

 

 

In addition, mature products account for about half of amherch’s current sales, while the other half is contributed by continuously launched innovative products. At present, normal temperature yoghurt has entered the stage of relying on the steady growth of mature products and adding new growth on a cyclical basis. This year, Amherst innovatively launched 0 sucrose series new products, further expanding the crowd and consumption scene.

 

For the development prospect of Amherst category, an industry source said that when Amherst achieved 5 billion, many industry insiders and investors were worried that the category had encountered a bottleneck, but since then Yili has continuously made the revenue of the category exceed 20 billion through innovation, proved the endogenous growth ability of the enterprise with its performance, and made the market have greater confidence in its sustainable growth.

 

 

In addition to creating a large single product of 10 billion level, Yili also makes use of innovation to continuously empower the classic brand. In previous years, the growth of the company’s excellent sour milk slowed down, but since 2020, it has injected new vitality into the brand development by relying on integrated innovation.

This year, Yili will integrate milk and bubble, launch the first bubble milk, and layout the bubble beverage market of 100 billion scale. It is understood that the sales volume of milk steam excellent sour milk exceeded 1 million cans on the day of its initial listing. In the future, yogurt bubble water is also expected to open a new era for yogurt brand.

 

On the other hand, in terms of enterprise increment, Yili continues to obtain an advantageous position in various industries through category innovation and differentiated competition.

 

First, as infant milk powder enters the era of stock competition, Yili creates increment through differentiated competition. It is believed that in the next few years, Yili jinlingguan is still expected to maintain high-speed growth, and maintain a market leader in adult, middle-aged and elderly milk powder; In addition, Yili also plans to become the single largest shareholder of Aoyou by taking a stake in Aoyou, and share the future growth dividends of jiabeiaite sheep milk powder and haipunuokai high-quality imported milk powder. From the current market share, Yili milk powder plate still has a lot of growth space.

 

 

In addition, the cheese industry is still in the early stage of development in the Chinese market, with large market capacity and large consumption upgrading space in the future. Yili, which has long laid out this category, will continue to grow mainly through cheese sticks in the next 2-3 years. In the long term, it plans to cover more people through new products and create continuous increments in all price segments. It is worth noting that Yili has established an independent cheese business department from the end of 2018 to provide support for the rapid growth in the next few years in terms of organizational structure.

 

In the non milk plate (mineral water, functional drinks and plant-based products), Yili also has broad growth space. Taking health drinks as an example, at present, the company’s product layout has involved normal temperature lactic acid bacteria drinks, plant protein drinks, functional drinks, mineral water, etc., all of which are high growth categories. An insider said that Yili can benchmark Nestle, Yuanqi forest, nongnongshan spring and other well-known enterprises in the future Industry to achieve new growth through new product R & D and creating popular models.

 

 

An analyst said that with the collective efforts of each business unit, Yili’s overall revenue is expected to achieve double-digit compound growth in the next few years, and the profit margin will increase by about 50 basis points per year. Such performance growth is the best support for the goals of “top three” and “boss”.

 

全面价值领先

全球龙头新目标

 

Under the new economic situation, customer demand extends from a single product to multiple dimensions such as technology, brand, ecology, capital and management. Employees, shareholders, partners, industry and the public also put forward more requirements for enterprises. The competitive mode of selling products to consumers in a narrow sense and taking the lead with the advantages of the industrial chain also needs to keep pace with the times. In this context, if Yili wants to achieve its medium and long-term goals, it should not only lead the industry in performance, but also break through itself in value.

 

In fact, at the 2021 leadership summit not long ago, Yili officially released the goal of “overall value leadership”, which explains the enterprise’s value growth model from four dimensions.

 

The first is “leading consumer value”. There are many dimensions for enterprises to create value for consumers. From the perspective of Yili, they mainly focus on: consolidating product quality by means of industrial chain layout and improving industrial standards; Accelerate the R & D and innovation of large categories and small items; Expand brand coverage through marketing actions closer to consumers; Promote the digital process and make brand building and product innovation truly consumer centered.

 

For example, amuxi’s products have accurate insight into the market and constantly meet consumer needs, which is a concrete manifestation of Yili’s “leading consumer value”.

 

In addition, Yili continuously promotes the product innovation of amuxi according to the personalized needs of consumers through the consumer insight big data radar platform, and maintains the high-frequency rhythm of launching 1-2 innovative products every month. In addition, as a single product with a level of about 20 billion yuan, amhersh gradually prefers the social responsibility field that young people pay close attention to in the overall brand strategy. Through multi-dimensional ways such as product co creation and user interaction, amhersh enables young users to participate in brand activities, puts more emphasis on the sense of social participation, and provides more reference directions for China’s dairy brand marketing.

 

 

The second is “leading social value”. In contemporary social organizations, the proportion of social enterprises is, after all, a minority; Commercial enterprises only need to create economic value and social value at the same time, they can create great social welfare. Work with global food and beverage giants to contribute to sustainable development and drive the upstream and downstream industries to get rid of poverty and become rich. It not only highlights that Yili, as the representative of Chinese dairy enterprises, is in the forefront of global enterprises, but also contributes to the national policy of common prosperity.

 

It is understood that over the years, Yili has not only successively carried out actions such as smart grassland and northeast wetland protection to practice sustainable development; We also pulled 5 million farmers and herdsmen out of poverty and become rich through “targeted poverty alleviation in industrial bases”, and took promoting common prosperity as an important task leading social value.

 

 

Moreover, it is “employee value leadership”. Enterprises need to provide employees with all-round warm care.

 

It is understood that at present, Yili’s “spring rain plan” has been upgraded to version 10.0 to provide care for employees from multiple levels such as career counseling, various incentives, diversified welfare and open and innovative working atmosphere. It is worth noting that during the epidemic period, Yili, which successfully withstood the business pressure, continued to raise the salary of employees, so that employees have a more sense of gain and belonging.

 

 

Finally, “enterprise value leadership” is also a very important link. At this level, in addition to the two dimensions of enterprise development capability and operating performance capability discussed above, Yili’s shareholder value and partner value are also in the leading position in the industry.

 

On the one hand, Yili and its partners achieve long-term mutual benefit and win-win results. Although the profit of Yili dealers was once affected by the sluggish overall demand of the industry in 2016, the profit recovered rapidly from 2017 to 2018, and has been growing steadily since then, reflecting the strong toughness of Yili channel system. According to a dairy dealer, in recent years, Yili’s control over terminals and dealers has always led the industry, and the profit margin and overall profitability of cooperating dealers also have obvious advantages in the industry.

 

On the other hand, the capital market also showed sufficient confidence in Yili. The data show that in the 25 years since its listing, Yili’s post resumption share price has risen from 8.39 yuan / share of the closing price on the first day of listing to more than 40 yuan / share, with a cumulative increase of more than 300 times and an annualized rate of return of more than 25%; The company has distributed dividends 21 times, with a cumulative dividend amount of more than 30 billion yuan. It is worth noting that Yili’s fixed increase was implemented this time, the sound of good news in the capital market continued, and the intraday share price rose all the way, highlighting the support of the capital market for Yili’s plans to expand production capacity.

 

 

后记

 

Since the establishment of restructuring in 1993, the development process of Yili can be divided into three stages.

 

Stage I: after early embryonic development and in line with the outbreak of Chinese people’s demand for dairy products, Yili has accumulated relatively strong business strength, become an earlier dairy enterprise dominated by normal temperature liquid milk in China, and continue to expand its business scale. While implementing the “national weaving” plan for expansion, Yili continues to explore channels, optimize products and enhance brand strength.

 

The second stage: after 2008, the whole dairy industry entered an adjustment period. During this period, Yili began to seek strategic transformation. With the rapid recovery of domestic consumers’ confidence in Chinese dairy products and the continuous strengthening of Yili’s own product strength and brand strength, Yili took advantage of the trend to improve its brand strength by actively participating in major activities with high awareness and exposure. At the same time, Yili launched the “global weaving” plan to point to the overseas market. At this stage, Yili gradually developed into the “boss” of the domestic dairy industry.

 

The third stage: Yili has gradually become the first camp of the global dairy industry, and has been the first dairy industry in Asia for many years. It is also the largest dairy enterprise with the most complete product categories in China. After growing into a leading enterprise in the industry, Yili is still making continuous efforts to expand other product business lines, and by acquiring high-quality milk sources and leading companies at home and abroad, promoting the development of products to higher quality, and gathering the resources owned by the group into a force to continuously march towards the “world’s first dairy enterprise”. This is also the meaning of “gathering potential” in this global partnership conference.

 

Yili has developed so far, From following the trend (the demand of people’s livelihood) to taking advantage of the trend (the rise of domestic dairy industry), it has entered a key development stage of gathering (the all-round development of enterprises). Standing in the “post 100 billion era” At the new starting point, Yili not only demonstrated the development potential and innovation strength of leading enterprises with its performance, but also demonstrated the pattern and courage of pointing to the top of the global dairy industry with its unique value system. In the future, what kind of “fourth stage” Yili will open up is worthy of more expectations inside and outside the industry.

(enterprise information)

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