Four months after announcing its strategic investment in obijia, a local dairy company, Danone gained a key new chip in China’s milk powder market.
Yesterday, the food evaluation center of the State Administration of market supervision released the latest batch of approval documents (decision) for the registration of infant formula milk powder products, including two sheep milk powder series of Zhuoyuan and nuoyou sheep of Hunan obijia nutritional food Co., Ltd.
According to the data of xiaoshidai, these two brands are new brands launched by Danone and obijia in the Chinese market. At the same time, they are also the first batch of sheep milk powder products under the company that meet the new national standard of milk powder.
Now let’s take a look at the specific situation.
The influence of formula registration on the whole infant formula milk powder industry is said to be huge and far-reaching, and the acquisition of formula “plays a decisive role” in whether enterprises can quickly occupy the market and obtain key market share.
Xiaoshidai saw on the official website of the State Administration of market supervision and administration that the product formula of Zhuoyuan sheep formula milk powder with the latest formula registration was approved for registration on June 17, 2022, and it needs to complete the switch with sheep Zizi sheep formula milk powder with the first three stages within three months from the date of approval, and organize production in strict accordance with the new formula after the switch.
Correspondingly, the formula of yangzizi formula sheep milk powder 1-3 will be cancelled on June 17, 2022, and the switch with Zhuoyuan formula sheep milk powder 1-3 will be completed within 3 months from the date of cancellation.
Pin. Registration number
According to the data, obijia has previously obtained the registration qualification of 9 milk powder formulas, belonging to the two sheep milk powder brands of yangzizi and keweian, and the milk powder brand ousuli. The above website information shows that the registration number of Ouli is valid until January 17, 2023, and it is not clear how the brand will be arranged in the future.
Xiaoshidai also noted that the two trademarks “Zhuoyuan” and “nuoyou sheep” were applied for registration by Hunan obijia nutritional food Co., Ltd. on December 17 and December 24 last year, respectively. The scope of goods / services includes baby milk flour; Protein dietary supplement; Baby Food; Nutritional supplements; Infant formula; Baby milk powder, etc.
It is worth noting that although the new national standard for milk powder has not been officially implemented this year, milk powder enterprises must consider matching the requirements of the new national standard for milk powder when applying for secondary formula registration.
the two brand series of Zhuoyuan and nuoyou sheep, which have recently passed the formula registration, are also the first batch of sheep milk powder products that meet the new national standard of milk powder under Danone.
In the past two years, Danone has continuously increased its local production capacity in China by virtue of the acquisition of McGonagall Qingdao milk powder factory, strategic investment in obijia and the repurchase of Domex milk powder business in China from Yashili.
According to the official website of the State Administration of market supervision, Yunhui produced by Danone special nutrition (Qingdao) Co., Ltd. has not updated the relevant information of formula registration. Danone’s acquisition of Dumex’s business in China is currently in the stage of simple case publicity, and Dumex’s products have not updated the relevant information of formula registration.
This also means that with the formula registration of Zhuoyuan and nuoyou sheep, Danone has at least two “tickets” to the new national standard of milk powder, winning a time window for the latter.
On the other hand, as an important layout of Danone’s overweight sheep milk powder business in the Chinese market, Zhuoyuan and nuoyou sheep milk powder products are expected to bring new business growth opportunities to Danone, and they are also expected to become chips for Danone to further explore and develop offline market business in China.
Xiaoshidai once introduced that in May this year, Danone pointed out in an internal notice that with the strategic cooperation between Danone and obijia, the company intends to “establish and polish the business model of exclusive supply lines in offline cities, and strive to make a greater breakthrough in the expansion model of offline cities”. At the same time, it also made the latest appointment to obijia’s business team.
It can be seen that Zhuoyuan and nuoyou sheep, as the “vanguard forces” to develop business in offline cities, their experience and lessons are expected to bring more inspiration to other Danone brands to open up the sinking market.
However, compared with Danone’s milk powder brands such as Atami and nuoyneng, which already have high popularity, there must be problems of low brand popularity and whether the product positioning can make Chinese consumers “buy”. Next, whether Danone can make good use of the latest chips and the results deserve attention.
Milk powder business
Today, in response to the snack generation’s query, Danone reiterated that its strategic cooperation with obijia “is another important milestone in Danone’s development in China”, describing it as helping Danone make use of its global experience in professional and special nutrition to better “serve Chinese consumers”.
In fact, at present, infant formula milk powder has become the most important business pillar of Danone China, and accelerating the development of milk powder business is naturally the top priority of the company.
According to the financial report data, in the first quarter of 2022, the region where the Chinese market is located became Danone’s highest growing market in the world, with sales increasing by 15.3% year-on-year to 735 million euros (about 5.086 billion yuan). In the major regions of the Chinese market, the sales of Danone professional special nutrition business in the first quarter of this year was 543 million euros (about 3.757 billion yuan), an increase of 21.5% year-on-year.
At the Danone 2022 capital market day held in March this year, Xie Weibo, President of Danone Greater China and Oceania, focused on sharing the company’s investment priorities in China’s milk powder business.
He said that at present, China’s infant distribution market is facing challenges such as the decline of the newborn demographic dividend and the transition period of the new national standard. It is expected that the industry will face a decline in sales from 2022 to 2023, but thanks to the three child policy and other benefits, sales are expected to return to stability in 2024. As a response measure, Danone has delineated several investment priorities, including maintaining and improving the share of Atami, introducing innovative products with foreign labels, local supply capacity and new product development.
Xie Weibo believes that local production in China is becoming more and more important for Danone to accelerate the launch of new milk powder products, so Danone has taken action to speed up the establishment of local supply network. He also said frankly that the strategic cooperation between Danone and obijia will help speed up the provision of Chinese label products that meet the national standard of milk powder.