Market events
1. During the 2021 Double 11 shopping festival, Tmall’s GMV was 540.3 billion yuan while JD’s GMV reached 349.1 billion yuan. It is worth noting that the rise of other e-commerce platforms such as Douyin and Kuaishou has broken the dominance of these traditional e-commerce platforms. More details on ChemLinked.
2. Kuaishou released its 2021Q3 financial report. The financial report shows that Kuaishou’s revenue was 20.5 billion yuan in the third quarter. Online marketing service revenue was 10.9 billion yuan, the largest source of income; live-streaming revenue was 7.7 billion yuan, an increase of 7.4% from the previous quarter. Total e-commerce transactions reached 175.8 billion yuan, a year-on-year increase of 86.1%.
3. Two top influencers, Cherie (Weibo account: 雪梨Cherie) and Sunny (Weibo account: 林珊珊Sunny), were fined a massive amount of money for tax evasion. Cherie and Sunny are both top-tier influencers in China. Their business cover advertising, MCN, live streaming, etc. Media exposed that Cherie was fined 65.5531 million yuan, and Sunny was fined 27.6725 million yuan. Both of them announced later that they would stop their live-streaming business for a time.
Company dynamics
1. DTC functional food brand LemonBox completed an A-round of financing, securing about ten million dollars. Consumers can get professional advice from AI dietitians and purchase daily nutrition supplement bag by filling LemonBox’s online health questionnaire. In the meantime, the company uses the collected data to support product development to satisfy consumers’ multiple needs. Now its distribution channels include WeChat mini program, Douyin, Tmall, and JD.
2. Freshippo, a new retail company from Alibaba Group, opened its first offline coffee shop in Yunnan, implying it joins the coffee market competition.
Freshippo Coffee Shop
3. On November 1, the Coca-Cola Company announced the acquisition of the remaining 85% of sports drink brand BODYARMOR for up to 5.6 billion dollars (approximately RMB 36 billion), realizing its wholly-owned holding of BODYARMOR. It marks the largest brand acquisition in Coca-Cola's history.
4. On November 6, at the 4th China International Import Expo (CIIE), the world’s largest meat supplier, JBS, a Brazilian company, signed a strategic cooperation with Freshippo, planning to import 200 million yuan grain-fed beef from the United States.
5. Children’s snack brand Xiaolu Lanlan opened its first offline store. As a snack brand developed by Three Squirrels, a top DTC snack brand in China, Xiaolu Lanlan focuses on developing no-add snacks for children aged from 1 to 6.
Xiaolu Lanlan Experience Store
6. Health food brand ffit8 cooperated with talk show company Fun Factory to launch a new brand TalkRou, mainly selling instant chicken breast. Founded at the end of 2019, ffit8 develops "protein" as its core product. In 2020, its core product Ffit8 protein bar was sold 10.5 million pieces, with a sales performance of over 100 million yuan.
7. At this year's CIIE, Nestlé exhibited a variety of new products that are exported to China through cross-border e-commerce channels, including a number of nutritional supplements for infants and young children, and a powder product that helps pregnant women regulate blood sugar during pregnancy.
In addition, Nestlé Health Sciences, a Nestle’s medical nutrition company also exhibited a new brand Vitaflo for the first time, which focuses on clinical nutrition for rare diseases and congenital metabolic diseases. Vitaflo will also enter the Chinese market through cross-border e-commerce channels.
8. The alcohol industry continued to gain investors’ attention:
- Low-alcohol beverage brand LUOYIN completed a Pre-A round of financing, securing nearly 10 million dollars. This brand mainly sells Chinese fashion tea & fruit wine.
- Baijiu brand Xiangziqian gained nearly ten million yuan investment. The brand’s main selling point is to provide customized baijiu for consumers to reduce costs and solve stock problems for distributors.
- Craft beer brand Master Xuanbo gained tens of millions of yuan investment, the third round of financing in 2021. Its products entered e-commerce platforms in October 2021 and now its online sales ranked top1 in the craft beer sector.
Master Xuanbo’s products
9. Children’s snack is another popular sub-category among investors who aim food industry:
- New-rising children’s snack brand ShuGeLe completed an Angle round of financing. Founded in 2021, this brand develops products by targeting parents’ main concern that children consume less than enough vegetables. It turns vegetables to delicious snack for children.
- Another children’s snack brand DuoMaoMao also gained new investment, securing nearly 100 million yuan. Founded in 2020, DuoMaoMao mainly provides nutritive, tasty, and fun snacks for children aged 3 to 12. It now has over 80 SKUs and achieved great sales on multiple channels.
10. Japanese beauty giant Shiseido launched its new oral beauty brand INRYU at CIIE. This brand now has three products, Night Ritual+, Advanced Radiance, and Laser Refine. It will officially enter the Chinese market in March 2022.
11. Oatmeal drinking giant OATLY announced the opening of its first factory in China to solve the short supply problem in the Chinese market, implying that this company has entered a new stage of localized production after entering the Chinese market for more than three years.
12. Plant-based brand Impossible Foods gained another round of investment, securing about 500 million dollars. Founded in 2011, this brand has gained a total of 2 billion dollars investment.
13. High-end fruit gift box brand Caiguohouzi gained an Angel round of financing. The brand adopts a high-end fruit gift subscription consumption model. After purchasing a VIP card, customers can enjoy the weekly delivery of fresh fruit. At present, subscription packages such as monthly, quarterly, and annual cards have also been launched.
Caiguohouzi’s fruit box
Interesting & noteworthy new products
1. Canadian national coffee brand Tim Hortons teamed up with cutting-edge plant nutrition brand PLANTAG to jointly launch a plant-based coffee series. The first joint special drink “strong oatmeal latte” is made with plant-labeled oat plant milk instead of regular milk. The new products are now available in more than 300 Tim Hortons stores across China.
2. Moncler worked with Evian to invite Swiss artist Not Vital to create a limited edition glass bottle of mineral water. The 750ml glass bottle is printed with both brands’ logos and pieces of snowflakes. These glass bottles of mineral water will be put on shelves in designated retail stores.
Moncler x Evian limited glass bottles of mineral water
3. Oatmeal milk brand OATLY launched a new product, Frozen dessert bars. This series of products offers four flavors, including vanilla, strawberry swirl, chocolate fudge, and salted caramel, all wrapped in a chocolate coating. New products will be launched successively in December.
4. The popular sparkling water company Genki Forest launched its second energy drink brand, DEMON KING. It now has two versions, CLASSIC and LOW SUGAR. Genki Forest entered the energy drink market by launching a new energy drink brand ALIENERGY in 2020. At present, its sales reached 500 billion yuan.
5. Traditional sports drink brand JIANLIBAO released a new product named SUPER ENERGY, targeting professional athletes and sports enthusiasts.
6. Walnut milk brand Six Walnuts launched a new walnut milk product that contains GABA, an ingredient that can improve people’s sleeping quality.
Six Walnuts’ new product
7. Start-up meat brand STORNERGY announced the launch of its first product cube spam. The new product changes the traditional packaging of spam, 3 individually packaged cube spams in a box, each of which is 145g. This product also uses plant extracts to replace the nitrite which is commonly seen in traditional meat products.
STORNERGY’s product
8. Low-calorie vegetable snack brand Capybara Family recently launched a new plant protein heart potato chip, which is made from a mixture of four kinds of plant proteins. The protein content is 28% and the dietary fiber content is 45%.
Capybara Family’s potato chip
Some impressive data
1. From October 1 to October 31, 2021, 111 investment and financing events were announced in the new consumer brand sector. A total of 42 investment and financing events targeting the food, beverage, and catering sectors were made, accounting for 37.8% of the total. Brands that focus on health were popular among investors.
2. According to data released by the General Administration of Customs, China imported 61.77 million kilograms of coffee beans in the first half of 2021, an increase of 104.3% year-on-year. The total import volume was US$238 million, an increase of 76% year-on-year, among which a majority was most from countries such as the United Kingdom, Brazil, Ethiopia, and Kenya.
Regulatory compliance
1. On October 27, China National Center for Food Safety Risk Assessment (CFSA) opened 10 new varieties of food-related products for public feedback, including three new additive varieties used in food contact materials (FCM) and articles, two FCM additives with expanded application scope, and five new resins. More details on ChemLinked.
2. According to a notice released by China National Center for Food Safety Risk Assessment (CFSA) on November 1, 2021, China is now soliciting public opinions on using sugarcane extract and bifidobacterium longum subsp. longum BB536 as new food ingredients. More details on ChemLinked.
3. On November 5, 2021, China State Administration for Market Regulation (SAMR) issued a notification to clarify the requirements for the power of attorney (PoA) required for the registration of imported infant formula. More details on ChemLinked.
4. On November 12, 2021, SAMR issued an official notice to approve the new supervision requirements of infant formula milk powder product labeling. Compared with the consultation notice on July 28, most labeling requirements stay the same. The official notice mainly revised the Rule 4, regulating if the milk protein raw materials are from two or more animal sources, the proportions from different animal sources should be indicated in the ingredient list.
The application of infant formula recipe registration shall be implemented according to this notice from November 12, 2021. Products produced from Feb. 22, 2023 shall meet the labeling requirements of this notice, and products produced before Feb. 22, 2023 can be sold till the expiration date ends. More details on ChemLinked.
5. On November 17, 2021, Beijing Product Quality Supervision and Inspection Institute issued a notice to solicit public opinions for "GB 4806.10-xxx Paints and Coatings in Contact with Foodstuffs (Draft)". More details on ChemLinked.
