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1. The China Dairy D20 Summit released the 2020 China Dairy Quality Report. According to the report, in 2019, the pass rate for raw milk sampling was 99.9%, and the qualified rates for national food safety supervision and inspection of dairy products and infant formula milk powder were 99.7% and 99.8%, respectively. The summit proposed the Three-Year Action Plan to maintain the self-sufficiency rate of domestic milk sources above 70%.
2. Fonterra said it had raised the raw milk purchase price forecast for the current production season from NZ$6.4 to NZ$6.8 per kilogram due to strong demand in China. The move will inject about NZ$10 billion into the New Zealand economy.
3. Chinese e-commerce snack giant Three Squirrels announced to reduce 300 SKUs by the end of this year. At present, Three Squirrels owns a multi-category snack food portfolio with nearly 600 SKUs covering nuts, dried fruit, bakery, and dried meat, etc. Three Squirrels plans to transform from an all-category brand to a "nuts + selected snacks" brand.
4. Danone released third-quarter sales, showing that the specialized nutrition sales declined 5.7% year-on-year in Q3, mainly due to China's steep double-digit decline. Sales of infant formula in China through cross-border channels contracted sharply by 60%, given the continuous border closure and reduced tourism with Chinese mainland.
5. Chinese consumers' overseas purchases have dropped sharply due to the COVID-19 pandemic, which has stricken a blow to many Australian brands. 30% of the Daigou stores closed down, and the infant milk powder became unsalable.
6. Nestlé reported nine-month sales for 2020. Sales in the AOA region was CHF 15.251 billion, down 6.7% year-on-year. China saw negative growth, turning positive in the third quarter. Coffee, culinary, and ice cream all delivered growth, with sequential quarterly improvements. The rollout of the locally produced infant formula brand Belsol was on track. Infant cereals and Purina PetCare both grew at a double-digit rate.
7. Coca-Cola reported third-quarter 2020 results. In the Asia Pacific region, unit case volume declined 4%, primarily due to India and Japan's coronavirus-related restrictions. In contrast, the unit case volume of sparkling soft drinks delivered substantial growth in China.
Company Dynamics
1. ByteDance has applied for the registration of several trademarks of "ByteCoffee", marking its entry into the coffee market. Bytedance owns Douyin (Chinese version of Tik Tok), the most popular short video application in China.
2. On October 5, Fonterra issued a notice agreeing to sell its ranches in China for a total price of NZ$555 million. Chinese dairy giants Yili and Sanyuan took over its ranches for respectively NZ$513 million and NZ$42 million. The company would shift more resources and energy to product development and business expansion in the downstream industry chain.
3. Coca-Cola issued a statement stating that before the end of 2020, it will suspend its Zico coconut water production and further adjust, reduce, and optimize the company’s numerous beverage portfolios. Coca-Cola currently has more than 400 brands worldwide, and the brand has revealed plans to cut more than half of them.
4. The Chinese popular online beverage brand Yuanqi Senlin has changed its iconic logo from “元気森林” to “元气森林”. The new logo used the Chinese character "气" to replace the Japanese character "気". Previously, the brand used the Japanese character “気” to make its products closer to Japanese-style drinks and has achieved excellent market performance.
5. Tencent-backed Tim Hortons coffee opened its 100th store in China in October. The Canadian coffee brand just entered the Chinese market in 2019.
6. Walmart's two self-owned brands, "Huiyi" and "Marketside" have accelerated expansion in the Chinese market by launching nearly 200 new products in more than 400 offline stores and online platforms.
7. Japanese dairy brand Megmilk Snow decided to recall about 400,000 cans of liquid milk for infants 0-12 months old. The reason is that the product may contain small fragments from the outer metal packaging, which may cause safety risks. This product may enter the Chinese market through the Daigou channel.
Products Launched
| Dairy |
Yiran, a beverage brand under Yili, launched a new milky drink in its Tmall flagship store. The new product features 0 sucrose, low fat, and rich milk minerals. The packaging uses the animation IP Hello Kitty image, and the price is RMB 69.9 / 6 bottles.
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Meiji Dairy's yogurt brand Huoli rolled out a new pineapple flavored low-fat yogurt. The new product uses Japanese-origin lactic acid bacteria, and each cup contains about 3.2g dietary fiber, helping maintain intestinal function.
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Yuanqi Senlin's yogurt brand Hokkai Pastures released a sugar-free yogurt family pack. The sweetness of this product comes from two sugar substitutes, erythritol and steviol glycosides. Each bottle contains 30g protein and 800mg calcium in a large volume of 1kg package for family sharing. The price is RMB 79 /2 bottles.
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Tea brand CHALI launched a new milk tea range in the Tmall store. The new product innovatively makes milk tea in the form of a lollipop, which can immediately dissolve in hot water. The new range has three flavors: strawberry, peach oolong and Hong Kong-style milk tea.
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French organic infant food brand babybio launched organic infant formula milk powder in China. The new product contains BB12 probiotics to enhance intestinal health. The brand will also introduce several milk powder and baby food product lines in the next three years, such as organic goat milk, organic yogurt, and organic dairy snacks, etc.
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| Plant-based |
Dicos launched its latest plant-based chicken burger in more than 2,600 stores nationwide. The new burger highlights "Chinese style" because it uses typical Chinese ingredients such as rattan pepper and fresh bamboo shoots and chooses a Chinese plant-based meat supplier STARFIELD. The price is RMB 20 for each.
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Yangyuan Beverage has launched a new walnut-based drink, "Six Walnut 2430" with "0 sugar, 0 flavor condiments, and 0 cholesterol" as the selling point. The product targets students, white-collar workers, and other brain-intensive groups.
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Plant-based snack brand Peasup launched a new snack chickpea puffs. The product adopts non-fried baking technology, and the fat is 40% lower than usual potato chips. It is available in three flavors of seaweed, tomato, and banana.
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KFC China launched plant-based products in 210 stores in 6 cities, including Beijing, Shanghai, and Guangzhou. Plant-based meat products include the plant-based beef cheeseburger and the plant-based chicken nuggets and corresponding set meals. The plant-based beef cheeseburger costs RMB 35, and the plant-based chicken nuggets (4 pieces) cost RMB 11.
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| Healthy |
Chinese yogurt brand Simple Love launched the Pylopass® Probiotic Powder. Each bag contains over 2000mg Pylopass® non-viable Lactobacillus reuteri, reducing the number of helicobacter pylori in the stomach. The price is 2g*30 bags /RMB 368.
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Nestlé launched Jiashan® Jialichang® (佳膳®佳立畅®) 250ml in the Chinese market. This product is a liquid oral full-nutrition special medical food for perioperative nutritional treatment. As the first liquid whole protein and full-nutrition formula brand for special medical purposes in the Chinese market, Jiashan® Jialichang® launched the 500ml tube feeding package last year.
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Nestlé introduced its customized vitamin brand Persona to the Chinese market through cross-border e-commerce. The brand’s Essential Vitamin Packs include multiple portfolios aiming to help relieve stress and improve immunity, sleep, energy, and weight management, etc.
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Chinese snack brand Bestore launched the probiotic fruit and vegetable powder containing 60 kinds of fruit and vegetable enzymes and active probiotics.
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| Trending |
Bestore launched a series of nut products, including cherry blossom white peach flavored sparkling macadamia nuts, cheese strawberry cashew, cheese strawberry almond, crispy macadamia nuts, probiotic mixed nuts, and nut bars. The sparkling flavor is a popular element in 2020 food innovations in China.
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KFC has launched a new quick-boiled pre-packaged food brand KAIFENGCAI selling river snails rice noodles, chicken soup, noodles, and fried rice. The river snails rice noodles originate from local delicacies and are extremely popular in China.
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Chinese coffee brand Saturnbird launched the new super instant oat latte ranges. It combines oats with cold brew coffee or matcha and uses freeze-drying technology to make it into an instant series. The new products are available in three flavors of Espresso, Guatemala, and matcha.
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Plant-based beverage brand Plant Selected collaborated with chocolate brand Chocday to roll out the plant-based drink with innovative caps. The cap can store quantitative raw materials. After the consumer twists and taps the bottle cap, the raw materials will fall into the drink and create a new flavor. The new products are available in three flavors of plain cocoa, hazelnut cocoa, and banana cocoa.
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Store-made tea chain brand Nayuki Tea launched a pre-packaged sparkling water, featuring 0 sugar, 0 fat, and 0 calories. The new product has two flavors of white peach and lemon.
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Regulatory Updates
1. On October13, China released 42 national food safety standards (compulsory GB standards). The release includes the update of 8 standards, the formulation of 30 new standards, and the revision of 4 standards.
2. On October 13, the National Health Commission of the People's Republic of China released the notification regarding the 2020 Food Safety National Standard Project Plan. The Plan lists 46 GB standards that will be made or revised.
3. On October 16, the China National Center for Food Safety Risk Assessment consulted six new varieties of food-related products. The six varieties include two new FCM additives, three FCM additives with extended application scope, and one new resin used in FCM.
4. On October 21, China GAC released the list of non-compliant food products in Sep. 2020. A total of 218 batches of imported food from 36 countries/regions were rejected in September.
5. On October 26, in order to guarantee the safety and better quality Tmall Global issued two notifications to supplement the requirements of CBEC infant formula and complementary foods for infants.
***Disclaimer: All images used in this article are from the internet.
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