Contents

• Market Condition

• Company Dynamics

• Interesting & Noteworthy Products

• Financial Data

• Regulatory Compliance
  

Market Condition

1. According to the National Bureau of Statistics, China’s dairy production from January to April 2023 was 9.79 million tons, with a year-on-year (YoY) increase of 5.3%. The dairy output in April 2023 was 2.47 million tons, up 8.1% YoY.

2. China’s import value of cheese from January to April 2023 was RMB 3,130 million, with a YoY rise of 20.9%. The import volume was 55,100 tons in the same period, increasing 7.1% YoY. The cheese imports mainly came from New Zealand, European Union and Australia, accounting for 65.4%, 14% and 11.4%, respectively.

3. In May 2023, the new consumption sector witnessed 37 investment and financing events, totaling approximately RMB 1.1 billion. The financing number and amount both rebounded compared with that of April. To further illustrate sub-sectors, although the food and beverage industry had the highest number of financing events, the investment amount was generally small, ranging from one to ten million for each.

Company Dynamics

1. The Meiji Tianjin factory, Meiji Group’s first production base in North China, came into operation in May 2023. Currently, the Tianjin factory initiates seven production lines, producing products like milk, yogurt, cream, etc. Additionally, the brand’s new low-fat yogurt, specially designed for Chinese consumers, is solely manufactured in the factory. In the future, Meiji Group plans to continuously strengthen the industrial layout in China with North China as the core.

Meiji’s New Low-fat Yogurt

2. Wahaha’s Lactococcus lactis WHH2078 and its application were authorised patent on May 26, 2023. According to the research, this lactococcus lactis can alleviate depression/anxiety-like behaviour through regulating the depression-related neural factors, which can be applied to health food and drugs for depression prevention and cure. In addition, the lactococcus lactis is also with great fermentation characteristic and can be employed in fermented milk products.

3. Junlebao signed a strategic cooperation agreement with Fuping Government and Sdic Chuangyi Fund Management Company to strengthen the collaboration on the goat dairy industry. Junlebao has entered the goat milk powder track since 2022 with its first launch of goat infant formula product. Fuping is China’s biggest dairy goat breeding base county and has the largest industrial scale nationwide. With the help of Fuping’s goat dairy resource and industry advantages, Junlebao is expected to develop its goat milk powder sector at more accelerated speed.

Junlebao’s Goat Infant Formula Product

4. Nine business sectors of Nestlé, including coffee, confectionary, infant and baby food, etc., officially initiated strategic cooperation with Meituan Instashopping, an instant retail platform, regarding scene marketing, service upgrading, product supply optimisation, etc. In the following three years, Meituan Instashopping and Nestlé will jointly improve Nestlé’s annual sales to the target of RMB 2 billion on the platform, and in particular focus on the platform sales of the food, drinks and pets, etc. categories.

Left: Meituan Instashopping’s Interface / Middle: Meituan Instashopping’s Delivery Driver

Right: Nestlé’s Instant Coffee

5. PepsiCo unveiled a type of heavy-duty electric truck in China and announced to put them into use. This type of trunk is charged with 100% clean energy from charging posts constructed by PepsiCo’s factories, which can realise green logistics from factory to shelf. Currently, the company’s 15 distribution centres have employed electric heavy-duty trucks to deliver brand products. The launch of the new trunk is a step of the company’s sustainable development plan, PepsiCo Positive, which aims to purchase raw materials, as well as produce and sell products in a more sustainable way. The company strives to build up a recyclable value chain and achieve net-zero emission by 2040.

PepsiCo’s Heavy-duty Electric Truck

6. Suntory plans to invest at least 5.3 billion dollars in the following years for acquisition, with the focus on healthy beverage brand. Since consumers are more concerned about their physical and mental health, the company is considering rolling out this variety of drinks.

Interesting & Noteworthy Products

1. Lay’s announced two new crisp flavours of mutton soup and braised donkey meat. These new products are Lay’s regional exclusive series and only sell in limited regions. They are developed from Shandong’s and Hebei’s specialties, respectively.

Lay’s new crisp flavours of mutton soup and braised donkey meat

2. Perrier, a high-end sparkling water giant, launched a lychee flavoured product specifically for Chinese consumers and only available on the Asian market. China is the origin of lychee and holds the largest lychee industry. The launch of the lychee flavoured sparkling water on the Chinese market is Perrier’s intention of developing new products combined with local consumer preference.

Perrier’s Lychee Flavoured Sparkling Water

3. The first batch of products from Kangsude (康素得), an Ausnutria’s brand of food for special medical purposes (FSMP), was successfully produced, implying a new level of the company’s FSMP business. The products suit consumers aged above 10 years old with eating, digestion and absorption, and metabolic disorders.

Kangsude’s FSMP Product

4. Lesweet rolled out mint flavoured syrup with zero sugar, fat and calories. As the product is independently packed and can dissolve instantly, it’s convenient for consumers to DIY beverages by adding it to coffee, cocktail, fruit tea, etc.

Lesweet’s Mint Flavoured Syrup

5. Nestlé and Day Day Cook, a dietary solution platform, jointly launched a new plant-based instant rice product. It contains plant meat produced by Harvest Gourmet and can be preserved for six months under room temperature. With three flavours, namely, Kung Pao chicken, Japanese curry chicken and Sichuan spicy pot, the product is currently sold on the e-commerce platforms.

 Plant-based Instant Rice Product

6. Starbucks unveiled a new series of light caffeinated drinks named Starbucks Refreshers, made from unbaked Arabica bean extract mixed with fruit juice and dried fruit. The caffeine content of every cup is about one third of Americano in the same cup.

Starbucks Refreshers

Financial Data

Regulatory Compliance

1. On May 6, 2023, China National Center for Food Safety Risk Assessment announced to seek public comments on five national food safety standards (GB standards), involving milk powder, food additive, food nutritional fortifier, and food testing method. Any comments can be submitted online prior to June 30. More details on ChemLinked. 

2. On May 10, 2023, China National Health Commission published the updated catalogue of new food raw materials, food additives and food contact materials (FCM) and their applicable standards. The catalogue covers a total of 98 new food raw materials, 215 new food additives and 235 FCM approved by the end of 2021. For those approved since 2022, their food safety indicators shall comply with the announcement made at the time of their releases. More details on ChemLinked.

3. On May 28, 2023, General Administration of Customs of China (GACC) published the list of non-compliant food products in April of 2023. A total of 196 batches of imported food from 38 countries/regions were rejected. More details on ChemLinked.

4. On May 29, 2023, the State Administration for Market Regulation (SAMR) released a consultation draft of Administrative Measures on the Review of Health Food, FSMP, Drug and Medical Device Advertisements. This draft revises the Interim Administrative Measures to address issues that have arisen since its implementation. Major revisions include the regulation of Internet live-streaming of and advertising for health foods and FSMP. Any comments can be submitted before June 28, 2023. More details on ChemLinked.