China Food

Dialogue with yanweibin, chairman of Aoyou: he and Yili are the same people in the industry and are not prepared to become “new flying cranes”

In the second half when China’s infant milk powder gradually entered the stock competition, Aoyou, backed by Yili, was the fastest-growing business unit of Aoyou, a high-end milk powder brand imported from the Netherlands, hiponokai 1897, which planned an ambitious revenue growth target.

“Our plan is that in the next five years, the single brand hiponokai 1897 (hereinafter referred to as hiponokai) will be made into more than 8 billion yuan (Note: calculated according to the sales volume delivered by the manufacturer), and the corresponding terminal retail volume will be about 10 billion yuan.” Yanweibin, chairman of Aoyou, told the snack generation today.

This means that if the above “small goals” are successfully achieved, the scale of hiponokai as a single brand will be equivalent to the total annual revenue of Aoyou. According to the financial report, in 2021, the revenue of Aoyou group was 8.873 billion yuan, of which the revenue of hiponokai was 3.182 billion yuan.

Today, hiponokai held a brand upgrading conference with the theme of “Hello, new life” in the Aoyou global headquarters building in Changsha, announcing the latest strategy. In the separate communication with the snack generation before the meeting, yanweibin also further talked about the product portfolio strategy of hiponokai, how Aoyou should deal with the uncertain environment such as repeated epidemics and Russia Ukraine conflict, as well as the collaborative cooperation between Aoyou and the newly introduced major shareholder Yili.

海普诺凯1897品牌升级发布会

Now, let’s take a look at the on-site news sent by the snack agent.

New play

In fact, since 2019, hapnock has been the fastest-growing business unit of Aoyou, and its performance has maintained double-digit growth for consecutive years. “We are confident that hiponokai will become the single largest milk powder brand imported from the Netherlands in the near future. Now we have reached the second place.” Yanweibin tells xiaoshidai.

To this end, hiponokai officially announced today that it will upgrade from a milk powder brand to a “new female lifestyle brand”.

This is due to his latest insight into the new generation of mothers. Yanweibin believes that consumers are different now. They no longer bear the labels of “sacrifice” and “Superman”. We also believe that only by doing well in this generation can we raise the next generation “. For the new generation of mothers, it is very important to understand them and be able to empathize with them.

On site

“Hiponokai’s development plan needs to be supported by the ability of milk source, scientific research, team talents and other aspects. From the perspective of consumer communication, as a first-class milk powder company, if it only focuses on delivering scientific quality and efficiency, it will be cold and lack of temperature.” He said.

In order to create a “brand of new female lifestyle”, hiponokai has launched several new programs.

The brand said today that it has jointly launched the “Pro mother Achievement Plan” with moms.com, baobaobab.com, baobab.com and meiyou.com, including the establishment of a pro mother growth platform to provide systematic and phased feeding and childcare support.

In addition, the brand will fully launch the “forces Nouvelles public welfare plan” this year, focusing on the physical and mental health of children in mountainous areas, the mental health of mothers and the nutritional health of Tibet. At the same time, hiponokai announced that the internationally renowned pianist Lang longina and his wife had become the global image spokesmen of the new brand.

release conference

This is also the latest move of Aoyou to seize the market share of milk powder under the stock competition. The company previously said that due to the decline in the birth rate, the competition situation in the infant formula industry is not expected to change this year. However, it is believed that the leading enterprises under the stock competition can reap more market share and further enhance their market concentration with the help of a perfect supply chain system, strong brand effect and quick response channel service.

According to relevant industry data, in 2021, Aoyou’s offline sales market share in the infant formula industry in Chinese Mainland was about 6.9%, ranking fifth.

Response to epidemic situation, etc

At present, in the Chinese market, hiponokai 1897 has a diversified product portfolio, including hiponokai 1897 Hezhi, Zihu, Youlan, Xizhi, future version, children’s milk powder, mother’s milk powder, Zhishu lactose free special milk powder and other products, covering the life cycle from pregnancy and childbirth to the growth of infants and young children.

According to the report recently released by Bain and Kaidu, the price of infant formula milk powder in China will increase in 2021, but the decline of birth rate will lead to a decline in sales; In order to find new growth points, some enterprises have launched children’s milk powder. As introduced by the snack generation, hiponokai also launched the children’s growth formula last year.

When asked about the future product portfolio plan, yanweibin told the snack generation that baby powder is still the core business of hiponokai, and the focus will not change. “Because my supply chain is in the Netherlands, the cost is relatively high. In addition to infant formula, everyone is very sensitive to the price of (children’s milk powder, etc.), so our advantage is not obvious.” He said.

Product portfolio of hiponokai 1897

Due to the overseas distribution of milk sources and factories, the Chinese dairy enterprise is also facing great pressure under the crisis of COVID-19 and the conflict between Russia and Ukraine.

“When the conflict between Russia and Ukraine broke out, we immediately set up a crisis group. Because our products need to be transported to China by China Europe railway, and we have local businesses in Russia and Ukraine, we need to protect our team employees.” Yanweibin said that the logistics of China EU railway is smooth, but Aoyou has also made a crisis plan.

He said that although some consulting companies also pointed out to Aoyou that globalization might become “regional globalization” in the future, and the supply chain would be more localized, and put forward relevant suggestions, Aoyou would still be firmly based on overseas milk sources. “(although we are now facing many external uncertainties,) we still position ourselves as a global company. We are not ready to turn ourselves into a new flying crane or a new Yili.”

Yanweibin also mentioned that due to the travel restrictions under the epidemic, many original plans have also changed. For example, the integration construction plan of the global senior management team has been moved to online. “Due to these external factors, the implementation progress of our previous golden 10-year plan has also lagged behind. However, even under such circumstances, first, the whole group is still alive; second, the whole development steps have not been interrupted. I am still satisfied with this.” He said.

“Industry peer”

When talking about Yili, the new controlling shareholder, yanweibin described to xiaoshidai that the two sides are the same people in the industry.

“Our former controlling shareholder was Taiwan Shengde Pharmaceutical Co., Ltd., which helped us with our pharmaceutical experience. Later, CITIC agricultural industry fund, as a large state-owned enterprise, also helped us. Now, Yili has taken over, and both of us are industry peers, so we will have better synergy,” he said. “It means that we not only invite major shareholders, but also invite industry reinforcements.”

“Therefore, as soon as Yili came in, we immediately set up a collaborative working group. Now there are more than a dozen special collaborative groups to implement relevant projects.” Yanweibin said that from raw material procurement, R & D to manufacturing, Aoyou and Yili can cooperate cooperatively to improve Aoyou’s profitability with the advantages of scale and efficiency.

Yanweibin, chairman of Aoyou

Xiaoshidai introduced that last October, Yili announced that it would acquire 34.33% of the shares of Aoyou and become the single largest shareholder of the latter. The above transaction is also the largest investment merger and acquisition between Chinese dairy enterprises in 2021. By the end of the tender offer in March this year, Yili’s shareholding had increased to about 59.17% and became the controlling shareholder of Aoyou.

 

According to the research report released by Everbright Securities, according to Euromonitor, in 2021, the market share of Aoyou and Yili infant formula powder by sales was 6.3%/6.2% respectively, and the total market share was 12.5%. After the merger, they will surpass Nestle (11.7% market share) and become the second in the industry.

 

According to the above research report, Yili and Aoyou will have synergy in milk source, supply chain and channel, and the cooperation will help to improve the coverage and market share of Aoyou milk powder. Great Wall Securities previously pointed out that Aoyou’s layout in the fields of nutrition and probiotics will form a good supplement to Yili.

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