Market events

1.       On October 20, multiple e-commerce platforms started presale for the 2021 Double 11 Shopping Festival. The most eye-catching campaign was the severe competition between two top live-streamers, Austin Li and Viya. They both had more than 200 million views on that day. Austin’s GMV reached 12.974 billion yuan, Viya’s GMV reaching 9.073 billion yuan.

Company dynamics

1.       On October 13, Spring Show (春雪食品) successfully established an IPO on Shanghai Stock Exchange. Its share price rose 43.98% to 16.99 yuan on the first day of listing. Founded in 1991, Spring Show specialized in research and development, production, processing, and sales of white feather chicken and chicken foods. The company's products are exported to Japan and the European Union. Its big clients include Dicos Fast Food, Family Mart, Cargill Animal Protein, etc.

2.       On October 15, popular bubble tea brand Nayuki opened its Tsinghua South Gate PRO store, the first Nayuki theme bookstore in Beijing. Product categories in the PRO store are more affluent than other Nayuki bubble tea stores, containing tea, coffee, refreshments, and snacks. It also provides thousands of books for consumers to read. Nayuki now has nearly 700 offline stores in China, including many special themed stores, such as bookstores, pubs, dream factories (a multi-scenario experience store), and gift shops.

3.       New-rising health food brand 21BEAUTY completed its millions of yuan of Angle round financing. Founded in Beijing, with “0 add” and “clean” as its selling point, this new health brand has launched a shake bag, which contains 15g freeze-dried powder that can make a bottle of fruit and vegetable juice after adding some water.

Shake bags from 21BEAUTY

4.       New-rising seasoning brand MIX MASTER completed its tens of millions of yuan of Pre-A round financing, marking its third financing round in 2021. This brand mainly targets young consumers, providing them with creative seasoning products. Its first product entered the market on Tmall in July and achieved 100,000 units sales in August, ranking first in the spicy sauce category on Tmall.

5.       Chinese fashion tea brand CHAGEE completed A and B rounds of financing, securing over 300 million yuan. CHAGEE was founded in 2017 and positioned as a new Chinese fashion tea brand, providing consumers with freshly made "real milk and real tea". So far it has opened more than 350 stores in southwestern China, such as Yunnan, Guangxi, and Guizhou. Besides, the brand has expanded nearly 40 stores to Thailand, Singapore, and Malaysia.

CHAGEE’s offline store

6.       Genki Forest announced to invest 5.5 billion yuan to build five factories in three years. It also announced that all its sparkling water products will no longer add preservatives such as sodium benzoate and potassium sorbate. As a result, Genki Forest will become the first domestic food company that avoid adding the above-mentioned preservatives to carbonated beverages.

7.       Chinese dairy giant Yili announced that it acquired the equity of Ausnutria, a big Chinese infant formula company, through Yili’s wholly-owned subsidiary, Hongkong Jingang Trade Holding Co., Limited. After the transaction, Yili will hold 34.33% of Ausnutria’s stock share, becoming its single largest shareholder. This transaction is also the largest investment merger among Chinese dairy companies in 2021.

8.       Creative dairy brand Eisbock completed its Pre-A round of financing, gaining tens of millions of yuan. As a purified milk brand, Eisbock is popular among top tea and coffee brands with nearly 100% B-end repurchase rate currently. Its clients include Heytea, M Stand, Peets, Metal Hands, etc. Through these top B channels, Eisbock quickly gained traction among C-end consumers. Without any promotion, its monthly sales on Tmall reached 10000 units at present.

9.       Children’s health snack brand The Garden Band has recently completed two consecutive financing rounds of tens of millions of yuan. Its products were launched in mid-2021, providing children aged 2-8 years old with delicious, no-additive healthy snacks made of vegetables and fruits. Mothers in first- and second-tier cities who purchase refined feeding are the target consumers.

Products from THE GARDEN BAND

10.   Bubble tea brand Heytea invested in a new company, Anhui Green Tomato Biotech company, which owns an oat milk brand, YePlant, the second-largest to-B oat milk supplier in China.

11.   Dairy brand Öarmilk has recently received tens of millions of first-round financing. Öar is taken from the Swedish word "island". Positioned as a high-end yogurt brand, the brand uses the concept of "fresh, natural and no added" as its main selling point. There are currently 9 SKUs on sale, including the “Basic” series, the large-capacity “Share” series and the “Healthy” series focusing on healthy function.

12.   Low-alcohol beverage industry is gaining investors’ attention:

-          Dairy alcohol brand MIKO gained tens of millions of yuan of financing recently. Founded in 2020, MIKO is popular because of its ace product, milk beer. After being launched for two months, its milk beer’s sales exceeded one million units, among which offline sales accounted for nearly 50%.

-          SENSE HUNT, a new-rising fruit wine brand, gained tens of millions of yuan of investment. It now has two product lines, Sangria fruit wine and sparkling fruit wine.

-          Chinese fashion cocktail brand WAT gained a new round of investment. One of the investors is popular bubble tea brand Heytea. Using “Cocktails, Anywhere, Anytime” as the brand’s slogan, WAT now has two product lines, high-end and affordable. It also continues to open offline stores.

WAT’s offline store

13.   On October 27, Nestlé (China) and Dada Group announced to further deepen their strategic cooperation. Representatives of the two parties have jointly signed a 2022 strategic cooperation agreement, which will further deepen cooperation in omni-channel, digital, etc, and jointly promote the digital transformation of retail.

14.   Irish dairy giant Dairygold launched a new product, Aerabo grass-feed adult full cream milk powder, in the Chinese market, implying that a new competitive player joins the Chinese adult milk powder market.

Some impressive figures

1.       Goldman Sachs explained the reasons for investing in China's pet market in a 104-page report. The report predicts that until 2030, the compound annual growth rate of pet food spending will be as high as 19%.

2.       October 1 to 7 is called the Golden Week when Chinese people have a week of holiday to celebrate Chinese National Day. In this year’s golden week, Chinese domestic tourists reached 515 million, and domestic tourism income was 389.061 billion yuan, a year-on-year decrease of 4.7% and recovered to 59.9% of the same period before the epidemic.

The duty-free business performed well in the Golden Week. From October 1 to 6, Haikou Customs recorded 1.27 billion yuan of duty-free shopping on outlying islands, with 1.75 million shopping items and 152,000 customers, an increase of 82%, 154%, and 66.7% year-on-year, respectively.

3.       Nielsen data shows that in the first half of 2021, the overall sales of the instant noodle industry fell by 7.7%, while sales falling by 7.3%.

Interesting & noteworthy new products

1.       Popular hot pot brand Haidilao launched a new series of sodas, which claims can help digestion. The new products have three tastes, including hawthorn, peach, and apricot. Now consumers can buy these sodas from all Haidilao offline hot pot restaurants and its Tmall store.

2.       The domestic cocktail brand RIO recently launched a green plum wine to join the competition in the plum wine market. The new product has an alcohol content of 12.5% VOL and does not add colors, flavors, and preservatives. It is sold in RIO’s Tmall flagship store with a price of 39.9 yuan/bottle/150mL.

RIO’s plum wine

3.       Vitamin energy drink brand Eastroc Beverage launched a shake Latte, entering the instant coffee market.

4.       Chinese bottled water brand Wahaha launched a new product, hyaluronic acid sparkling water. Adding hyaluronic acid to bottled water is becoming a trend now.

5.       Miss Green has launched several new products, including plant-based meatballs and plant-based crab cakes; two types of soups, coconut milk soup and Kaiji sour soup; and Guizhou spicy sauce and Dai-flavored spicy sauce. Miss Green is a start-up catering and lifestyle brand that promotes plant-based diets through offline events, brand collaborations, and restaurants. The company has reached a cooperation agreement with Element Fresh, a well-known light food chain in China. Consumers can taste Miss Green’s products at this restaurant since November.

Products from Miss Green

6.       ELECTRO X SLIM Natural Electrolyte Drink has entered the market, with the brand's first natural fragrance-free sports drink. Each bottle contains 7.5g of soluble dietary fiber, as well as electrolyte sodium potassium calcium magnesium, vitamin B3, B6, E, and C.

ELECTRO X SLIM Natural Electrolyte Drink

7.       On October 12, new consumer brand Indie Pure released its new oral muscle-building product "Nicotinamide Elastin Peptide Drink," co-developed with Bloomage Research Institute. Indie Pure focuses on the “food as beauty” sector. The biggest selling point of its first batch of products is anti-sugar.

Products from Indie Pure

Regulatory compliance

1.       On October 18, 2021, State Administration for Market Regulation (SAMR) unveiled the exposure draft of “Administrative Measures for Registration of Foods for Special Medical Purpose”. The proposed revision to this regulation involves the onsite inspection requirements, the principle of a clinical trial, product supervision, registration modification & renewal. The priority review and approval procedure are newly set, which apply to food for special medical purposes, products for rare diseases, and those in urgent clinical demand. More details on ChemLinked.

2.       On October 21, 2021, China National Center for Food Safety Risk Assessment (CFSA) opened 11 new varieties of food additives for public feedback, including seven new food additives and four food additives with expanded application scope. More details on ChemLinked.

3.       As revealed by the notification released on October 22, 2021, China National Health Commission (NHC) officially approved the use of 15 new food ingredients and food-related products, including one new food raw material, nine new food additives and five food-related products. More details on ChemLinked.

4.       On October 25, 2021, China opens 34 national food safety standards for public feedback, including the revisions to “GB 4806.11-2016 National Food Safety Standard Rubber Materials and Articles in Contact with Foodstuffs” and “GB 4806.7-2016 National Food Safety Standard Plastic Materials and Articles in Contact with Foodstuffs”. Compared to the 2016 version of these two standards,  the two consultation drafts mainly amend the application scope, definition, technique requirements, requirements for immigration test and labeling requirements. More details on ChemLinked.