China Food

At the 100 billion yogurt track, dairy giants and new brands have started a tug of war


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The yogurt industry continues to ferment, and there will always be new scripts left.
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In 1977, after a long investigation and visit, Danone shot an advertising film with the theme of longevity “Georgians over 100” in the mountains of Georgia. In the film, the smiling picture of long-lived people holding round cups of yogurt deeply shocked Americans at that time.

This smart approach, which strongly linked yogurt and longevity, enabled Danone to successfully open the U.S. market in the next 10 years, and its dominant position in the U.S. dairy industry at one fell swoop. At the same time, it also allows yogurt, which has long been a European breakfast or snack, to truly enter the stage of globalization.

Today, yogurt, like cheese and meat, is an important part of the American diet. The United States is also in a leading position in the global yogurt Market with product innovation.

Compared with the habit of cold food in the United States, yogurt consumption can be “all year round”, anytime, anywhere. The strong demand for yogurt in China often depends on the change of weather, especially in hot summer, ranging from supermarket chains to mom and pop stores. Stop in front of the freezer, and the yogurt on the shelf is always more dazzling.

For Chinese people, yogurt decomposes most of lactose during fermentation, so as to avoid the adverse reactions such as flatulence and diarrhea caused by lactose intolerant drinking liquid milk. Yogurt is also more palatable than ordinary milk. Therefore, the yogurt industry is in a period of rapid growth.

According to the data of toubao Research Institute, the size of China’s yogurt market increased from 28.33 billion yuan in 2014 to 67.98 billion yuan in 2018, with a compound annual growth rate of 24.5%. It is expected that the market size is expected to exceed 210 billion yuan by 2023.

However, the food and beverage industry has always been “inward bound”, and the yogurt industry is even worse. With the growth of new brands such as Lechun and Jane Eyre, the yogurt track has become crowded, and new and old brands compete on the same stage. There is no coronator in this super market with a population of 1.4 billion.

Low temperature yogurt,
The “new world” of thick milk dwellers
A yogurt war in the freezer is quietly starting.
As consumers, what they can feel most about this “war” is the brand of “letting a hundred flowers bloom” in front of them. On the supermarket shelves, there are not only a wide variety of yogurt from traditional brands such as Mengniu, Yili, Sanyuan, Guangming, but also products from new forces of yogurt such as Jane Eyre, Lechun, CASS, Beihai ranch, and Wudao.
Not only that, capital also favors yogurt track. Aside from the traditional dairy companies Yili and Mengniu, which are “not bad for money”, high-end yogurt brands such as Lechun, Jane Eyre and Wudao have frequently received financing.
Take Jane Eyre, a high-end yogurt brand focusing on naked sugar, as an example. At the beginning of 2021, Jane Eyre received a total of 800million yuan of round B financing, less than a year after the previous round of 400million yuan of round a financing. In March this year, Jane Eyre announced to the outside world that she had completed the round C financing (undisclosed amount), which was enough to show the “favor” of capital.
In recent years, with the continuous improvement of consumers’ income level and health awareness, China’s low-temperature dairy products, especially yogurt Market, has developed rapidly in recent years. The scale of China’s low-temperature yogurt Market in 2021 has been close to 70billion yuan.
However, in the process of rapid development, the low-temperature dairy market has shown a “hundred flowers compete for beauty” situation, and the traditional dairy giants have not achieved overwhelming advantages as before.
Looking into the reasons behind it, in the view of financial Wuji, these brands can be in deep trouble under the shadow of “Gemini”, which is actually determined by the characteristics of low-temperature yogurt – short life cycle, which requires the cooperation of the cold chain. This also made Yili and Mengniu disdain to seriously intervene, so they left room for some new brands and small enterprises.
Looking back on the development of yogurt in China, since British businessmen established a milk company in Shanghai in 1911 to produce the first batch of yogurt in China by machine, the modernization of yogurt production has also advanced by leaps and bounds after more than 100 years of wind and rain. However, China’s cold chain transportation in the food industry is still one of the few relatively short boards. The cold chain has not sunk enough, which limits the market scale of low-temperature yogurt and makes it difficult to master the initial supply-demand balance.
From the downstream of the yogurt industry, the distribution of low-temperature yogurt mainly depends on cold chain logistics. However, China’s cold chain construction is not perfect. China’s per capita cold storage capacity is 0.14 cubic meters, which is still a big gap compared with 0.7 cubic meters in the United States; In terms of cold chain application rate, China is less than 20%, while developed countries and regions such as Japan and Western Europe are as high as 85%, with a significant gap.
For a long time, from packaged yogurt to bottled frozen yogurt, from stirred yogurt to Baili bag, roof pack yogurt, from large fruit probiotics to… The domestic yogurt market has always been trapped in cold chain transportation. The transportation radius of dairy enterprises determines the sales radius of low-temperature yogurt.
This is also the fundamental reason why China’s white milk market has formed a “two dominant dairy enterprises”, but there has never been a mainstream enterprise in the yogurt Market.
Until 2009, Guangming launched moslian “normal temperature yogurt”, which changed the category composition of China’s yogurt industry in one fell swoop, becoming an innovation track parallel to Greek yogurt in the history of global yogurt development. Once launched, Guangming monopolized the top of normal temperature yogurt, and threw out Mengniu and Yili, the previous “twin stars” of dairy industry.
However, Yili and Mengniu Mengniu soon caught up and launched Chunzhen and anmushi with similar formulas and positioning, which quickly recaptured the market with their unique channel advantages.
“Normal temperature” means that there is no need for cold chain cooperation, low cost and strong penetration. Superimposed on the advantages of the three giants over the years, toubao data shows that in 2017, the market share of the top three enterprises in the yogurt industry, including Yili, Mengniu and Guangming, reached 59%. When this market has been carved up by Mengniu, Yili and Guangming, other companies trying to cut in are tantamount to ants trying to shake the tree.
In September 2017, the domestic yogurt sales reached 122 billion yuan at that time, with a year-on-year increase of 18%, surpassing pure milk for the first time. With the support of capital, some cutting-edge brands cultivated by Internet thinking, with unusual marketing and precise positioning, cut into the low-temperature yogurt track that is the most difficult for giants to “bite”, trying to occupy a place.
We can also understand why new players, such as Jane Eyre, Lechun, Beihai ranch and Wudao, all build the upstream industrial chain after financing to prevent being trapped by the underdeveloped cold chain system.
Yogurt growth “fell”,
Is high-end a cause or a result?
China’s yogurt market has not reached saturation, but this does not mean that the noise of the track will bring prosperity to the industry.
The fact is that yogurt is experiencing growth bottlenecks. Even during the epidemic when consumers pay more attention to nutritional needs, the growth rate of yogurt is also declining.
According to the 2022 China shoppers’ report on China’s fast moving consumer goods jointly released by Bain and KDO consumer index, compared with the high-speed growth of the sales of milk and cheese, the sales of yogurt from 2021 to 2020 decreased by 7.8%, which is classified as a low-speed growth category.
The low-temperature yogurt track, which is occupied by new consumer brands, is also not optimistic.
According to AC Nielsen data, the overall sales of low-temperature yogurt Market in 2020 fell by 12.5% year-on-year; In an institutional survey in May this year, new hope dairy was blunt: “in terms of the industry, the performance of low-temperature yogurt has been relatively weak in the past one or two years.”
To explore the reasons behind it, Caijing Wuji believes that we need to look at the internal and external causes of yogurt.
Internally, unlike Americans’ yogurt consumption habits, Chinese people have not developed consumption habits for low-temperature yogurt that is not suitable for heating and drinking. Compared with white milk with nutritional needs, choosing yogurt is more like choosing a good drink or snack food. However, with the rise of sugar reduction and consumption upgrading, sugared yogurt is not healthy enough, and the original yogurt is too sour, which also makes consumers confused about how to choose yogurt.
Externally, with the rise of new consumer brands that overturn “old consumption”, the keyword labels on yogurt packaging, “no addition”, “low sugar”, “0 sucrose” and “clean formula”… On the one hand, the industry threshold has been raised, allowing consumers to gradually subconsciously choose healthier yogurt in consumption decisions.
For example, “Minimalism” is one of the “online popularity” selling points of yogurt; Guangming dairy’s “truthful” yogurt takes “natural endowing, pure without adding” as the slogan, and the same kind of “Jane Eyre” yogurt directly takes the ingredient list as the slogan: “raw milk, sugar, lactic acid bacteria, nothing else.”
But from another perspective, these yogurt products have moved towards homogenization and involution, and for consumers, brand loyalty will also decline.
On the other hand, the prices of “high-end yogurt” such as “refusing chemical additives”, “strong flavor” and “high protein” are also more expensive one by one.
Where are these yogurt? The main reason is that the marketing cost and channel cost are high, which pushes up the product price. Take most of the online popular high-end yogurt brands as an example. They not only invite stars to endorse their products, but also put various marketing advertisements on social platforms such as xiaohongshu, which virtually pushed up the cost.
In addition, some high-end yogurt brands actually do not have their own production bases, and many are OEM. A large part of the “high price” of this part of yogurt comes from the emotional premium.
By implication, the domestic yogurt Market is still in the disorderly competition stage of “high price equals high quality”. The question of high-end low-temperature yogurt is that IQ tax is not groundless.
As we all know, the consumer group is a pyramid structure. The closer it is to the top of the pyramid, the stronger people’s consumption ability will be. When cutting-edge yogurt brands persist in the battle for “high-end” and pile up at the top of the pyramid, high-end consumers are not enough.
Whether it is the high-end yogurt that indirectly led to the decline in the growth rate of the track, or the layout of high-end yogurt to survive in the cold atmosphere of the industry, on the whole, the dividend period of the rapid development of high-end yogurt in this stage has basically ended. Now comes the real “bayonet fight” stage.
Do “addition” or “subtraction”,
The long-term doctrine behind the yogurt war
Tin PI, the founder of yongpu, once said, “Whoever masters the taste needs will master the future.” Although this sentence is reasonable, it is worth discussing.
Delicious and nutritious yogurt has a group of loyal fans like coffee and coke because of its unique taste experience. However, the taste of yogurt is not as different as coke and coffee. How to better form their own core competitiveness outside the taste is a common problem faced by all yogurt enterprises.
In 2007, chobani, known as the “apple” of yogurt, entered the U.S. yogurt Market guarded by the giant with “Greek yogurt”, a niche category at that time, and then promoted the share of this category in the entire North American yogurt Market from 1% to 52% at an incredible speed, thus becoming the second largest yogurt brand in the United States.
At that time, up to two-thirds of the U.S. yogurt market share belonged to two fresh dairy companies from France, Danone and Yunuo. Chobani grabbed a large amount of market share from the giants and created the business myth of “overtaking in the corner”. Behind it is the unique advantage of milk source and the repeated debugging of the concentration process and formula of Greek yogurt.
In China, with the deepening of the supply side reform, new brands and products in the yogurt industry have exploded, and the vigorous business format has spawned the internal roll. Fierce competition in yogurt products is inevitable.
According to cbndata’s 2020 new healthy consumption trend report, people’s healthy changes in diet are, on the one hand, subtraction, such as the pursuit of “low sugar, low fat and no addition”, and, on the other hand, addition of nutrients such as protein and active probiotics.
The success of chobani just provides two inspirations for Chinese yogurt Enterprises: “subtraction” pays attention to the competition for milk sources; “Addition” emphasizes the difference of strains.
From the perspective of subtraction, if yogurt companies want to live well, they must first have good products, and the root of good products is good milk sources.
Tracing back to the previous ordinary yogurt, gelatin and other colloids are mainly used to improve the viscosity of products. Now, under the high-end trend of the whole industry driven by new consumption, the ingredients are close to fresh milk, requiring as few manufacturing processes and added ingredients as possible, as well as health and functionality.
This puts forward high requirements for high-quality raw milk resources. Therefore, many yogurt companies, in addition to placing heavy bets on the cold chain transportation, have also made great efforts on the source.
However, large dairy enterprises have strong strength and enter the market earlier. The dispute over milk sources is obviously more powerful for dairy giants. China business daily once reported, “at present, almost all large-scale pastures in China have ‘famous flower owners’.”
In addition to the competition for milk sources, from the perspective of addition, good strains are another battlefield for yogurt enterprises, which is called “bacteria chip” because of its importance.
Taking probiotics alone as an example, the current situation of the domestic probiotics industry is no better than that of the seed and breeding pig industry.
At present, international probiotic patents are basically monopolized by the United States, Japan, Russia and other countries, and domestic probiotic raw materials must also be imported from these countries. According to the Research Report of Tianfeng securities, the domestic probiotic raw materials in 2020 mainly came from American company DuPont and Danish company cohansen, and the raw materials supplied by the two companies accounted for 85% of the overall domestic market.
Mengniu Guanyi milk uses Bb-12 probiotics from chr. Hansen, Denmark. LGG in Jane Eyre LGG probiotics naked yogurt also comes from chr. Hansen.
On the contrary, Japan has stepped into the functional era after facing the trend of health and aging. It has continuously increased research and development in the application of strains and ingredients, and has produced many star products.
Meiji has more than 5000 kinds of lactic acid bacteria. The “Meiji baileyou” series launched in 2020, including “R-1” and “LG21” yogurt products, uses special lactic acid bacteria strains “Lactobacillus bulgaricus 1073r-1 strain (R-1 lactic acid bacteria)” and “Lactobacillus Griffith oll2716 strain (LG21 lactic acid bacteria)”, which became popular in the market after its launch.
Fortunately, in recent years, Mengniu, Yili, new hope and other companies have begun to develop and cultivate their own patented probiotics and apply them to their own products. In 2020, Yili developed a probiotic with independent intellectual property rights – Bifidobacterium lactis bl-99.
On the one hand, the nutrition and functionality of yogurt products, on the other hand, the simplification and purity of yogurt formula. The “twin stars” of the dairy industry will also occupy a dominant position in the yogurt track. However, if many new brands can do a good job in differentiated positioning, enough focus and focus, it is still possible to become chobani.
Original title: 100 billion yogurt track, dairy giants and new brands start a tug of war | new consumption freezer war
作者:萧田;来源:财经无忌(ID:caijwj),转载已获得授权。
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