Leveraging the Breast is Best Principle: Yili’s Infant Formula Product Development Strategy

JinLingGuan's (a brand made by Yili) will leverage the "breast is best" principle to develop infant formulas that attempt to reverse engineer breast milk and produce a formula that more closely approximates breast milk. This strategy aligns with a broader national strategy expounded in the infant formula industrial promotion plan proposed by the National Development and Reform Commission of China last year. JinLingGuan will start this process by switching its formula to A2 protein and grass-fed milk sources.

On May 20, Yili JinLingGuan* (金领冠, hereinafter JLG) held a Brand Upgrading Conference ^[1]. The brand plans to develop proprietary technologies and formulations, which will act as key product differentiators and help the product align with emerging drivers of consumer purchasing preference. The key principle underpinning JLG's strategy is the breast is the best principle.

*JinLingGuan, an infant formula brand under Yili Company.

New Product Development

At the launch event, JLG introduced a new nutritional supplement brand called JinBeiZhi (金贝智), which includes four products, one probiotic product, one lactoferrin powder (as shown below), and two products fortified with algae oil (DHA).

JLG also stated that it would upgrade the formulations of several of its products, which will be available in the second half of this year. The brand Jinghu (菁护) will be reformulated to use A2 milk sources. The Ruihu (睿护) series will use grass-fed cow milk sources. The upgraded products are positioned to target the high-end market. It is worth noting that this is the first time for JLG to use A2 protein and grass-fed raw materials.

JLG's longer-term goal is to leverage the "breast is best" principle and reverse engineer breast milk and use information gathered from this research to guide R&D of new products developed to mimic human breast milk. For example, it is reported that the formula of the Zhenhu (珍护) series will be developed using this principle. This series will add OPO and two other ingredients, which are now undergoing patent review, including an "α+β innovative protein combination *" and a ingredient mix formulated using a proprietary "nucleotide ratio **”. The α+β innovative protein combination won the Chinese Outstanding Patent Award early in 2014 and is considered JLG's trump card.

*China invention patent, patent number: ZL200810241156.3

** It includes three China invention patents, patent numbers respectively are: ZL201510290842.X, ZL201510291739.7, and ZL201510300587.2

R&D into Breast Milk Mimetics

Yili JLG started its breast milk research program in 2003. Over the past 18 years, the team has collected a large number of breast milk samples, accumulated a robust set of Chinese breast milk data, and established the first breast milk database in China ^[1]. To help it commercialize the fruits of its R&D efforts, the brand also established a patent management system, including an IP management center and an IP protection plan.

The increasing competition in China's infant powder market means developing novel ingredients as key differentiators have the potential to give companies a competitive advantage. Last year, the National Development and Reform Commission of China (NDRC) issued the 'The Promotion Action Plan of Domestic Infant Formula Milk Powder ^[2]’. According to the plan, within three years, a unified breast milk research database will be established to study Chinese babies' nutritional needs. Besides, the formula registration management method will be optimized based on breast milk research and market demand.