Contents

• Breaking News

• Big corporate events

• Investment and financing updates

• Interesting & noteworthy new products

• Regulation & Policy

• Some impressive figures

Breaking News

1. Beyond Meat unveiled its plant-based meat production plant in Jiaxing Economic and Technological Development Zone near Shanghai. The new facility will produce a range of plant-based pork, beef, and poultry products, among which Beyond Pork is the first innovative product specially designed for the Chinese market.

2. H&H Group released the Sustainable Development Report 2020, in which it disclosed that a global plant-based strategy had been approved. The strategy focuses on bringing health to consumers through plant-based ingredients and formulations.

3. Coca-Cola announced plans to raise prices under pressure from rising raw-material prices. This is the second price hike announced by Coca-Cola within three years.

4. Wyeth launched the "4th generation milk powder" illuma Yunchun (启赋蕴淳). The new product features an innovative formula of A2 milk source and OPN active protein, which is better for absorption.

Wyeth’s

5. Genki Forest was suspected of misleading consumers and infringing consumers’ rights to know for using the tricky labeling of “zero sucrose” claim in its milk tea products. Genki Forest apologized for the misleading and promised to correct the label claim from “zero sucrose” to “low sugar.” See more details here.

6. Danone launched its first infant formula Nutrilon Yunhui (蕴荟) produced by the Qingdao specialty nutrition plant. The product is Danone's first domestically produced infant formula in five years with a specifically designed formulation for Chinese babies.

Big corporate events

1. Tmall will focus on supporting the organic food sector for baby and young children for the next three years. It will give organic brands more exposure opportunities and strengthen consumer education on organic category.

2. Fonterra unveiled its upgraded Guangzhou office and Guangzhou application center as a further step to tap into China’s catering market. The company, which has more than 20,000 restaurant customers in China, would apply more western-style dairy products to Chinese cuisines innovatively.

3. Unilever's plant-based meat brand, "The Vegetarian Butcher", will launch six new 2B (for the catering channel) products in the Chinese market. The new products include plant-based pork, beef, hamburger steak, beef ball, beef mince, and chicken, fitting the Chinese cooking scenes.

4. Coca-Cola reported first-quarter revenue of $9.02 billion, up 5% from a year ago, beating market expectations of $8.6 billion. The company hailed the Chinese market performance, with sales almost back to the pre-pandemic level. In 2021 Q1, Coca-Cola China launched new products covering several sub-categories, such as flavored soda, juice, and coffee.

5. Danone’s sales fell 3.3% to €5.7 billion in the first quarter of 2021 due to COVID-related headwinds and a high 2020 Q1 comparison base. Adult Medical Nutrition delivered strong growth, driven by China. Infant Nutrition remained penalized by COVID-related channel disruptions in China, with cross-border channel sales down around 45%. All in all, China’s sales decreased at a steep double-digit rate.

6. Nestle reported a 1.3% increase in sales to CHF 21.1 billion in the first quarter of 2021. Organic growth was strong across most Nestle's product portfolios, with the coffee business contributing the most. However, Nestle's infant nutrition business declined. Falling sales in other markets offset the recovery in China.

Investment and financing updates

1. Chinese cereal brand OCAK completed A round of financing worth over 100 million CNY. Vision Knight Capital was the exclusive investor. The funds would be used for brand building and channel expansion. OCAK has long been the top seller in Tmalls’ "Meal Replacement Cereal" list. The re-purchase rate of its cereal products in Tmall flagship store is 32%.

2. Genki Forest, the upstart beverage brand which has seen surging growth in recent years, announced to complete a new round of strategic financing valued at $6 billion. Yuanqi Forest's old shareholder Sequoia China and new shareholders Warburg Pincus and L Catterton led the investment. The latest financing marked the company's nearly quadrupled valuation in less than a year.

Genki Forest’s signature sparkling water products.

3. Fresh e-commerce company Dingdong Maicai (叮咚买菜) completed a $700 million D round of financing. DST Global and Coatue jointly led the investment. The funds will be used for new regional expansion, supply chain investment, and team building. Dingdong Maicai currently has more than 10,000 SKUs of fresh commodities.

4. Plant nutrition brand Plantag received 60 million CNY angel + round of financing from Chuxin Capital, Whales Capital, ZhenFund, Joy Capital, and Zen Investment. The funding aims for distribution channel building, product development and brand building.

5. Luckin Coffee received a $250 million investment in the latest effort to implement the overseas debt restructuring plan and fulfill a settlement with the U.S. Securities and Exchange Commission. The investment includes $240 million from Centurium Capital and $10 million from Joy Capital.

6. Yeeper Dairy teamed up with the Spanish dairy company Leite Noso to acquire another Spanish factory Queserias Prado, specializing in producing cheese. The acquisition of the Queserias Prado cheese plant will help Yeeper integrate high-quality dairy resources worldwide. The company plans to launch a series of products including high-end A2 cheese and organic A2 cheese in the European and American markets in the future.

7. Chinese-grown dairy brand Adopt A Cow completed the latest round of financing led by KKR and DCP. The funding aims to expand the upstream dairy farming scale and accelerate the digital-intelligence upgrade of the enterprise.

8. China Pet Foods completed the 70% equity delivery of New Zealand's largest pet canning factory PetfoodNZ International Limited. After completing the acquisition, China Pet Foods will have a more fledged production capacity in the world's most crucial pet food producing areas and markets, including China, New Zealand, Canada, and the United States.

9. Chinese new baby food brand Qiutian Manman (秋田满满) announced to have raised more than $10 million in Series A funding led by Shunwei Capital. This round of financing is mainly used for product development, brand promotion, and channel layout, etc. Qiutian Manman’s sales volume in 2021 Q1 exceeded 100 million CNY, with a year-on-year growth of 700%.

Interesting & noteworthy new products

1. Chinese cake brand LECAKE launched “Plump Plump Nama Chocolate,” also named “Hyaluronic Acid Nama Chocolate.” The new product is added with sodium hyaluronate from Bloomage Biotech, claiming to make the skin more moisturized and elastic. The Hyaluronic Acid Nama Chocolate has been available on Tmall at 168 CNY/2 boxes.

LECAKE’s hyaluronic acid nama chocolate

2. British juice brand Innocent launched a new smoothie series for kids. The latest products use global fruits such as oranges from Brazil, mangoes from Alfonso, and pineapples from Costa Rica. Each new product combines two kinds of fruit, aiming to provide kids with vitamin and dietary fiber supplements. The price is 39.6 CNY/4 bottles.

3. Want Want launched new functional candy products with two flavors of wild cherry and passion fruit. The wild cherry flavor highlights the antioxidant function by using concentrated powder of red grape juice, red pomegranate juice, and proanthocyanidins. The passion fruit one takes eye care as its selling point. Every 100g contains no less than 220mg lutein ester and no less than 480mg vitamin C, which can protect eyes and improve visual function. Both flavors are priced at 18g* bag /27 CNY.

4. Tea brand CHALI aims at the female health & wellness market and launched the collagen peptide tea jelly. Each 100g adds no less than 30mg phosphatidylserine, which can make skin elastic and smooth. The price is 120g*6 bags /79 CNY.

CHALI’s collagen peptide tea jelly.

5. Chinese dairy giant Mengniu rolled out a new low-temperature yogurt brand Ahmoule (means "delicious" in Mongolian). The brand targets young people in the lower-tier cities who are sensitive to price but also eager for quality.

6. Mizone launched a new vitamin sparkling drink. The new product features low sugar and is available in two flavors of lemon & lime and orange & blood orange. It also adds four vitamins and 11.5% of daily dietary fiber to meet consumers’ health needs. The price is 480ml*15 bottles /59.9 CNY.

7. EXTRA launched collagen sugar-free gum and low-sugar collagen jelly to keep abreast of the latest trends of applying functional ingredients to ordinary food. The new products use small molecule collagen peptides from Germany, among which sugar-free gum contains 2,840mg and the jelly contains 5,000mg. Chewing gum is 36.9 CNY for two boxes (40g/box), and gummy candy is 39.9 CNY for two bags (50g/bag).

EXTRA’s collagen sugar-free gum and low-sugar collagen jelly.

Regulation & Policy

1. On April 25, China’s National Health Commission (NHC) approved six food ingredients, including two new food additives and four new food raw materials.

2. On April 21, China National Center for Food Safety Risk Assessment (CFSA) opened five food-related products for public feedback, including one new variety of FCM additive, one FCM additive with expanded usable range, and three new resins.

3. On April 13, China GAC issued the latest version of “Measures for the Safety Administration of Imported and Exported Foods,” which will take effect on January 1, 2022. Compared with the current version, the number of articles in this new version has increased from 64 to 79.

4. On April 13, the China General Administration of Customs (GAC) issued the new version of the “Administrative Provisions on Registration of Overseas Manufacturers of Imported Foods,” which will come into effect on January 1, 2022. All food categories are subject to overseas food manufacturer registration, excluding food additives and food-related products

5. On April 1, China State Administration for Market Regulation (SAMR) unveiled its legislation scheme in 2021, covering the optimization of the business environment (e.g., Rules of Trade Secret Protection, Implementation Rules of Patent Law), market administrative measures, food safety supervision, etc.

Some impressive figures

1. From January to February 2021, China imported 762,300 tons of dairy products in total, an increase of 24.8% year-on-year. The import value was 24.16 dollars, a year-on-year increase of 9.1%. Imports of bulky powder, whey, cheese, protein products, and packaged milk increased significantly, while imports of infant formula, cream, and yogurt decreased at different rates.

2. In 2020, cat food has become the largest category in the Chinese pet industry, with a market scale of nearly 5 billion yuan.

3. In the first quarter of 2021, the new brand entry number on Tmall Global increased 63% year-on-year. In January alone, more than 600 new brands from overseas opened stores on Tmall Global. See more details here.

4. According to a report released by Euromonitor, China has the second-largest number of “Gen α” (those born between 2010 and 2024) in the world. Driven by population fluctuation, consumption upgrade, and the expansion of the lower-tier market, China’s mother & baby market is expected to grow to 5.9 trillion yuan by 2023.

5. According to Kantar consumer index, the baby rice noodles and supplementary puree sector shows stronger growth momentum in the lower-tier cities, with a growth rate of 5.1% of the total amount, faster than that of the top-tier cities.

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