Contents

• Market Condition

• Company Dynamics

• Interesting & Noteworthy Products

• Regulatory Compliance

Market Condition

1. According to the National Bureau of Statistics, China’s dairy production from January to May 2023 was 12.75 million tons, with a year-on-year (YoY) increase of 7%. The dairy output in May 2023 was 2.75 million tons, up 3.5% YoY.

2. Chinese National Society issued the first domestic glycemic index labeling specification for prepackaged foods (T/CNSS 018-2023) on June 12, 2023. This group standard will take effect on August 1, 2023, providing a regulatory basis for the assessment of low GI food. 

logo of low GI food

3. In June 2023, the new consumption sector witnessed 15 investment and financing events, totaling RMB 2 billion. Compared that of May, the volume shrank by 40% and the value by a sharp 80%.

4. This year's 618 shopping festival witnessed fierce competition among e-commerce platforms, as both brands and platforms aimed to generate momentum in the first major shopping festival following the easing of the pandemic. Major e-commerce platforms streamlined their promotion rules and offered increased subsidies in an effort to entice consumers with competitive prices. To gain more insights into this year's 618 Shopping Festival, please visit China's 618 E-commerce Shopping Festival Report 2023.

Company Dynamics

1. New Hope Dairy, one of the leading players in China’s dairy market, issued the company’s 2023-2027 strategic plan. In the following five years, the company will prioritise the development of low-temperature milk and low-temperature distinctive yogurt, like probiotic yogurt. Specifically, it will promote the compound annual growth rate (CAGR) by above 20% for high-quality low-temperature milk products represented by the “24 hours” series which are only sold 24 hours on the shelf, and accelerate the development of the low-temperature distinctive yogurt category through product innovation and promotion campaign. 

2. Chinese ice cream brand Zhongxuegao reached cooperation with New Zealand’s high-end sheep milk brand Maui and launched a brand-new sheep milk ice cream which will be both sold in China and New Zealand. According to Zhongxuegao, this cooperation will accelerate the large-scale export of sheep milk from New Zealand to China and foster the upgrade of China’s dairy industry. 

3. Bright Dairy rolled out a new series of infant formula products as per the new GB standard, made from raw fresh milk produced in the 47 ° north latitude milk source belt and added with a new generation of OPO patent for better absorption. In the future, Bright Dairy will focus on the infant formula sector and strive to acquire a market scale corresponding to its position in the dairy industry. 

4. Mead Johnson China signed a strategic cooperation framework agreement with Xbiome, a leading firm in microbial-ecology development and research. Two sides will jointly build up an AI framework to promote the innovation of precise nutrition and create more better products for consumers. The president of Mead Johnson China represented that this cooperation was an essential layout to promote the company’s precise nutrition strategy for human’s whole life cycle, and would strategically enhance the company’s scientific research strength in healthy microbial ecology.

5. Nutrafol, a hair growth nutraceutical brand of Unilever, announced to join the Chinese market, which was the group’s third health brand to enter China after Olly and Smartypants. Established in 2014, Nutrafol mainly sells hair growth dietary supplements categorised by life stages and genders. The brand’s hero product Golden Capsule is currently sold in the Tmall flagship store. 

6. Baifei Dairy plans to make an initial public offering and list on the main board of the Shanghai Stock Exchange. If the plan succeeds, the company’s output value will exceed 1.5 billion yuan. Located in Lingshan County, Guangxi, the “hometown of Chinese buffalo”, Baifei Dairy integrates breeding, production, R&D and sales. The company’s main products include low-temperature milk, normal-temperature milk, and school milk categories. Its brand Bonus, with high-nutrition and good-taste products, are favoured by consumers. 

7. Since China’s high-end market is booming with the entry of international brands and craft beer, Asahi Group Holdings of Japan intended to resume investment in China, the largest beer market worldwide. Currently, Asahi Super Dry, a brand under Asahi Group, has the highest sales volume in the China and is growing at a double-digit rate yearly.

Interesting & Noteworthy Products

1. Genki Forest rolled out a ginger soda with lemon flavour. The beverage offers consumers a unique taste with ginger’s spiciness and lemon’ sourness, as well as a sense of coolness due to the mint essence added. 

Genki Forest’s ginger soda with lemon flavour

2. Allcoconut, a new emerging Chinese domestic coconut water brand, launched a new product made from Thai coconut water. The product contains phycocyanin, a premium blue-coloured protein rarely existing in spirulina. Additionally, the product is popular also due to its natural milk aroma and richness of electrolytes. 

Allcoconut’s phycocyanin coconut water

3. Beyond Meat initially unveiled two flavours of heat-and-serve plant-based beef burgers in China during the 618 shopping festival, Italian tomato and black pepper flavoured. Both can be purchased on the Tmall e-commerce platform. 

Beyond Meat’s heat-and-serve plant-based beef burgers

4. Shiseido announced to launch a probiotic powder product of its Ultimune series as a step of entering the oral beauty business. According to Shiseido, a package of this probiotic powder contains 1 billion live bacteria for beautifying skin. The highly stable live bacteria, resistant to 20 times gastric acid and 14 times bile, can stay 21 days and double the skin brightness within three months. 

Shiseido’s probiotic powder product

5. Yili rolled out a milk powder product added with red ginseng, longan and matrimony vine. These Chinese food tonics, together with 52% fat-reduced fresh raw milk, can provide female consumers with comprehensive nutrition. The price in the Tmall flagship store is 148.8 yuan per can (400g). 

Yili’s milk powder product

Regulatory Compliance

1. On June 14, 2023, China's State Administration for Market Regulation (SAMR), National Health Commission (NHC), and National Administration of Traditional Chinese Medicine (NATCM) jointly issued a notice announcing four regulations related to raw materials and function claims for health food (nutrient supplement). The new regulations will take effect on October 1, 2023, superseding previous regulations. More detailed information on ChemLinked.

2. On June 21, 2023, China NHC consulted on Yerba mate as a new food raw material. More detailed information on ChemLinked.

3. On June 26, 2023, China NHC consulted on three new food additives, including one new food additive and two processing aids with expanded usage scope. More detailed information on ChemLinked.

4. On June 28, 2023, General Administration of Customs of China published the list of non-compliant food products in May of 2023. A total of 118 batches of imported food from 31 countries/regions were rejected. More detailed information on ChemLinked.

5. China NHC opened four new food contact materials (FCM) substances for public comments, including one new FCM additive, one new FCM resin, and two FCM additives with expanded application scope. More detailed information on ChemLinked.