Contents

• Breaking News

• Big corporate events

• Investment and financing updates

• Interesting & noteworthy new products

• Regulation & Policy

• Some impressive figures

Breaking News

1. According to Australian media reports, some global milk powder giants, including Nestle and Mead Johnson, may intend to acquire New Zealand's A2 Milk Company amid the company’s share slump.

2. The first China International Consumer Goods Expo was held from May 7-10 in Haikou, Hainan province, attracting 2,628 brands to participate, including 1,365 international brands from 69 countries and regions. The top countries in the number of participating brands are South Korea with 124 brands, France with 99 brands, Japan with 89 brands, the United States with 68 brands, and Italy with 56 brands.

Shiseido's booth in the first China International Consumer Goods Expo.

3. According to Bloomberg, Reckitt Benckiser's Chinese infant nutrition business (mainly Mead Johnson milk powder business) drew bids from private equity firms such as Bain Capital, Carlyle, and KKR. Chinese dairy companies Yili, New Hope Dairy, and Sequoia China, an investor in Junleba, also submitted the offer.

4. Tmall released the top 10 food consumption trends in products with the following attributes: supreme taste, healthy formula, fresh and short shelf life, quality ingredients, delicate lazy, healing and stress relieving, IP marketing, premium gift, China chic, and low carbon environmental protection.

5. Danone announced to sell its 9.8% stake in Mengniu Dairy for US $1.99 billion (about 12.79 billion yuan).

6. Abbott Laboratories Trading (Shanghai) Co., Ltd. was fined 9.09 million yuan for the detection of vanillin, a food flavoring, in its stage 1 infant formula. Find more here.

7. The oat-milk maker Oatly was trading on the Nasdaq under the stock ticker “OTLY.” Oatly priced its initial public offering at US $17 per share, giving it an implied market valuation of US $10 billion.

8. 618 shopping festival, one of China’s top 2 shopping festivals, started its presale. Mainstream e-commerce platforms have unveiled their 618 plans to boost sales. Click here to read more.

9. China will support couples who wish to have a third child, as the aging of the country's population has been increasing in extent in recent years.

Big corporate events

1. Beyond Meat's founder and chief executive, Ethan Brown, revealed that the company would continue to build capacity in China following the completion of its Jiaxing plant in April. The biggest driving force behind this move is to reduce costs to enhance the market competitiveness of its plant-based meat products.

2. A2 Milk Company said in the Fiscal Year 2021 Outlook Update that it would take more aggressive steps to address overstock and provide fresher infant formula to Chinese mothers. The de-inventory plan would cost the company more than 500 million yuan.

3. Ausnutria reported a 2.183-billion-yuan revenue in the first quarter of 2021, up 12.9% year on year. The revenue from its own brand milk powder business reached 1.925 billion yuan, up 12.6% year on year. The company reiterated its goal of "entering the top three of China's infant powder brands by 2023."

4. H&H Group, the owner of Biostime and Swisse, reported strong growth in its infant formula business in 2021 Q1. Infant formula sales in China recorded an 8.4% growth. Biostime sheep milk powder led the way with a 96.4% growth. However, Swisse's China revenue fell 10.8% year on year.

5. In the first quarter of 2021, the sales revenue of Arla Baby & Me® organic milk powder in the Chinese market recorded a year-on-year increase of more than 50%.

6. Ferrero China signed a strategic cooperation agreement with Alibaba Tmall Food for the year of 21/22. The two sides will deepen cooperation in three areas: capturing young consumption opportunities, deepening parent-child consumption scenarios, and enhancing high-end gifting consumption. For example, the company announced to open a new flagship store on Tmall, "Ferrero Young!", specifically aimed at young consumers.

7. Australian plant-based meat brand V2 officially entered the Chinese market. V2 has two product lines: V2mince (V2's most widely consumed product) and V2Burger. It will prioritize the catering channel in the Chinese market and provide plant-based meat products at more affordable prices.

V2's Burger and Mince products

8. Fonterra announced third-quarter results for fiscal 21/22. Greater China region led the growth, with NZ $4.678 billion revenues for the nine months ended April 30, 2021, up 9% year on year. The largest profit contributor, the catering service segment, continued to be the primary driver for Fonterra's strong performance in China.

Investment and financing updates

1. Health product brand KOOYO raised three rounds of funding in the recent three months, with a valuation of over hundreds of millions of yuan. Kooyo’s product concept is "putting health into pocket,” focusing on the small portable package. The brand targets working people aged 25 to 40.

2. Beijing Refine Biology Co., Ltd. raised tens of millions of yuan in Series A funding from the Challenjers Capital for new production capacity, technology research and development, and brand building. Refine Biology provides natural sweeteners, color, and functional ingredient solutions to food, beverage, pharmaceutical, and health products brands in more than 40 countries. Genki Forest is one of its customers.

3. Zihai Pot, a leading instant lazy hot pot brand, announced to have completed a C++ round of financing of over 100 million yuan. The brand states that its goal is far more than self-heating food. It aims to create more new brands in various segments.

The Zihai Pot

4. Healthy ready-to-eat brand "SharkFit" obtained B-round financing of 100 million yuan, with Bytedance leading the investment. The brand’s signature product is the room temperature ready-to-eat chicken breast product. In March 2021, the GMV of SharkFit exceeded 60 million yuan.

5. The infant food brand "Wo Xiao Ya" completed the A and A+ round financing, each with tens of millions of yuan. Wo Xiao Ya was officially operated in 2020, providing nearly one hundred SKUs, covering staple food, snacks, and condiments for infants and children.

6. Subscription weight management brand "Dong Chi" completed an A+ round of financing of 50 million yuan. The brand targets the group with weight management demand and provides them with cold-chained set meal solutions.

7. Boonboon, a coconut-based healthy food brand, raised a multi-million CNY angel round financing. The brand’s products include coconut oil, coconut snacks, coconut jam, coconut baking raw materials, and other coconut products. All these products are made from raw materials from core coconut producing areas worldwide, including Thailand, Sri Lanka, Malaysia, and Mauritius.

Interesting & noteworthy new products

1. Chinese healthy lifestyle brand Keep launched a new crispy protein bar containing collagen peptides with no extra sugar. The new product has two flavors of black chocolate and yogurt cheese. The price is 30g*7 pieces /119 yuan.

Keep’s new protein bar.

2. Chinese liquor brand Miss Berry launched a new series named Good Night Wine. The new product contains jujube seed extract and tea theanine, which have a mild sleep-aiding effect. The price is 300ml* bottle / 56 yuan.

3. Chinese high-end tea brand CHALI rolled out the new peach-flavored collagen peptide tea jelly. 100g of the new product contains 30mg of phosphatidylserine, which can help reduce stress hormone levels. It also contains collagen peptides to help firm the skin. The price is two boxes / 79 yuan.

4. Chinese plant-based meat brand Protein Meat launched plant-based chicken nuggets, meat crumbles, and meatballs. The three products contain hemp seed protein powder and feature 0 GMO and 0 trans-fatty acid.

5. Sengine Coffee launched a fruit coffee liquid called Cofftail. The product contains real fruit juice and can be served with sparkling water or cocktails. There are three flavors of grapefruit, passion fruit and green grape. The pre-sale price is 12 pieces / 119 yuan.

Sengine Coffee’s fruit coffee liquid

6. Genki Forest’s energy drink brand Alienergy launched a highly effective and refreshing energy drink. The new product selects South American matai tea as the base and contains ginseng and goji berry, with erythritol added to reduce calories. The brand also launched white grape & aloe vera flavored electrolyte water. The new product extends the electrolyte and isosmotic formula, adding vitamin B6 and vitamin E to assist protein metabolism.

7. Chinese children’s tuna snack brand Yu Ke Ai launched a new tuna diced meat sausage. The new product is high in calcium and low in salt and sugar, which is suitable for kids.

8. Chinese startup plant-based milk brand Liu Yang launched an oat milk. Compared with previous oat milk products of other brands, which highlight the perfect match with coffee, Liu Yang differentiates itself by prioritizing the "direct drink" taste.

Liu Yang oat milk

Regulation & Policy

1. On May 21, the General Administration of Customs of China (GAC) released the list of non-compliant food products in April. A total of 157 batches of imported food from 29 countries/regions were rejected.

2. On May 6, China issued a statement to suspend all activities under China-Australia Strategic Economic Dialogue indefinitely. After beef, barley, and wine, Australian dairy products will become the next food category to encounter higher trade barriers.

Some impressive figures

1. In 2020, the number of food merchants on Tmall with annual sales exceeding 100 million yuan increased by more than 30%. The sales of trendy products, such as 0-sugar drinks, functional snacks, low-alcohol drinks, meal replacement milkshakes, boutique coffee, and semi-finished meals, increased by 500% year on year.

2. According to GAC, from January to March 2021, China imported 61,000 tons of infant milk powder, down 17.6% year on year, with an import value of US $1.006 billion, down 8% year on year. The import volume of infant milk powder in the first quarter of 2021 saw the biggest decline in a decade.

3. China’s seventh national census result shows that China's population in the mainland reached 1.41178 billion in 2020, increasing 5.38% from 2010. China recorded 12 million new births in 2020, the fourth consecutive year that the number of new births fell. Click here to read more.

4. The number of people with hair loss in China has exceeded 250 million. The proportion of hair loss before the age of 30 is 84%, 20 years earlier than that of the previous generation. The demand for products related to anti-hair loss and hair growth is on the rise.

5. In 2020, the number of China's convenience stores reached 193,000. The top 10 convenience stores with the most outlet number are: Easy Joy (27,600), Mei Yi Jia (22,394), uSmile (20,212), Tianfu (5,808), Lawson (3,256), Family Mart (2,967), 7-Eleven (2,387), Shizu (2,358), Fook (2,021), and Bian Li Feng (2,000).

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