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Wyeth Launches New Super-High-End IF Brand Belsol in China

On June 30, Wyeth officially announced the launch of a brand-new super-high-end infant milk powder brand Belsol. This is Wyeth’s first new product series in nearly ten years, since the company launched illuma in 2011. Wyeth will focus on three brands in the Chinese market, namely illuma, S-26 Ultima, and Belsol. Illuma and Belsol are two independent super-high-end series. S-26 Ultima is currently the most high-end product line under the Wyeth S26 series. This latest move showcases Wyeth’s ambition to consolidate its dominance of the Chinese high-end and super-high-end milk powder market.

New brand, new features

Belsol focuses on tailored nutrition and raw material provenance. Online information shows that Belsol's milk comes from New Zealand farms and is produced by Wyeth's Suzhou factory. The brand's main feature is "exclusive nutrition customized for Chinese babies [1]." This brand positioning is similar to that of Chinese milk powder brand Feihe (Firmus), which also claims to produce milk powder more suitable for Chinese babies.

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The Breast is Best Principle 

According to Wyeth, Belsol is the outcome of research and development conducted in collaboration with the China Breast Milk Research Project. This research focused on the analysis of 122 indicators of breast milk conducted on samples collected in 8 cities across China. The breast milk samples were taken from colostrum right up to breast milk from 240 days after birth. The analysis of these samples was then used to guide product development [2]. Chinese companies Yili and Feihe have also invested heavily in breast milk research, which has helped develop their tailored products Yili Jinlingguan and Feihe Xingfeifan.

Wyeth Belsol also adopts a localization strategy to help it connect with Chinese consumers. The new brand has cooperated with Tmall New Product Innovation Center to gain insights on consumer’s demands using big data. It applies these insights to guide packaging design, marketing, and product positioning. Belsol has prioritized lower-tier markets and employs a dedicated sales team experienced in local brand operations in lower-tier cities.

Since 2015, Wyeth's sales in the China market have been hovering around 10 billion yuan [3]. High expectations are placed on the new brand Belsol to boost the business growth of Wyeth nutrition products and the wider Nestle Group.

Product Mix

Currently, Wyeth sells four infant formula brand series in China, including illuma, S-26, BabyNes, and SMA. With the launch of Belsol, Wyeth will focus on three major super-high-end brands in the Chinese market, namely illuma, S-26 Ultima, and Belsol. illuma and Belsol are two independent super-high-end series, and S-26 Ultima is currently the most high-end product line under the Wyeth S26 series. 

illuma(300-500 yuan)

OPO, OPO&gsMO, Organic, A2, Goat milk, FSMP

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S-26(100-300 yuan)

Gold, Ultima, Nutrisure

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BabyNes(900-1300 yuan)4.png
SMA(around 300 yuan)

Preshia

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Trends towards super premiumization

Strong consumer demand for higher quality and safer products has meant that premiumization trends have been a major factor in the industry's product development strategies in the past two years. According to the 2018 Nielsen "China Baby FMCG Market Development Report," it is expected that in the next 3-5 years, high-end milk powder products will account for about 70%-80% of the market [4].

To define high-end and super-high-end products, we will use 900-gram products as our reference. Products with a price above 260 yuan can be considered high-end milk powder. Products with a price above 300 yuan are considered super-high-end milk powder [5]. In the Chinese market, the price of some super high-end milk powders have risen to more than 400 yuan (Yili Jinlingguan goat milk powder), and some have even exceeded 450 yuan (illluma organic, a2).

High-end and super-high-end products have become an important driver of sales for dairy companies. Data shows that in 2019, sales of Feihe's high-end products increased by 41.4% year-on-year, accounting for 68.6% of its market share, compared to just 22.8% for its standard products. Mead Johnson's high-end milk powder Enfinitas accounted for 30% of its sales in the first quarter of 2019. In the first quarter of 2020, this figure increased to 46% [6].

For Wyeth, high-end and super-high-end products are also driving growth. Illuma, for example, has been the biggest driver of Wyeth's growth in Greater China in recent years. The brand still maintained double-digit growth in the first three quarters of last year [7].

As "high-end" and “super-high-end” have become the industry standard, major milk powder brands align with the trend and have adjusted their product development strategies accordingly:

  • Feihe updated its high-end milk powder Xingfeifan’s formula to make it closer to the breast milk;

  • Danone launched the super-high-end milk powder Aptamil Essensis 3;

  • Wyeth launched illuma goat milk powder;

  • Bellamy’s, which was acquired by Mengniu, also stepped up the competition in the super-high-end market by launching organic A2 milk powder.

  • Junlebao broke ground with its Banner Milk Powder Production Line Project with an annual output of 50,000 tons and collaborated with high-end mother & baby store brands in Shanxi Province to advance into the high-end milk powder market.

High-end and super-high-end products are generally developed around several key attributes which focus on the provenance of the brand (origin and owner), and the attributes of the raw materials (organic, goats milk, A2 milk, grass fed), and finally the overall product formulation and the various functional attributes of the ingredients used in the formula (lactoferrin, HMO, DHA/EPA, GOS, OPO, etc.) Brands that can tick all three of these boxes will dominate the market in the future.

***Disclaimer: All images used in this article are from the internet.
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