Sun Houming: Milk powder cant be sold because of the decline in the birth popula

Source: China News Weekly

Author: Sun Houming

"Milk powder is not as expensive as a few years ago.", A second -child mother living in Xiamen told China News Weekly that her first child was four years ago. Compared with then, the same brand seriesThe price of infant milk powder has been reduced from nearly 300 yuan (RMB, S $ 56) to 200 yuan.

At the end of April, major domestic milk powder companies in China have released a 2022 financial report.Although some enterprises have achieved profit breakthroughs in subdivided fields such as goat milk powder, the decline in revenue and rising costs have become an unavoidable reality in the entire industry.Among them, the decline in the birth rate of domestic population is the main reason for the decline in corporate revenue.

The National Bureau of Statistics shows that 9.56 million people were born in 2022, a decrease of 1.06 million from 2021.Following the short -term birth peak in 2016, the national population continued to decline. In 2022, the birth of the population fell below 10 million for the first time, less than half of the 20 million freshmen in the early 1990s.An article recently published by the Population and Health Magazine sponsored by the China Population and Development Research Center stated that statistical data shows that the domestic total and fertility rate decreased from 1.52 in 2019 to 1.07 in 2022.To 0.5.

Infant milk powder is the main source of revenue in the milk powder industry.In the age of rapid population, the milk powder industry has spent high gross interest rates and rapid expansion.When the birth of the population declines, the population structure has transformed to aging, how does the milk powder industry respond to the shrinking market, and how to meet new needs?

Domestic milk powder set off price war

A infant milk powder dealer who has been in the industry for more than 10 years told China News Weekly that now it has entered the 618 activity period, and the price reduction of domestic brand milk powder is mostly 20-50 yuan.He said that the price reduction of milk powder is not a national price reduction by the manufacturer, but the price adjustment of dealers from various places based on the profit margin in their own hands. "The milk powder has a shelf life.Transfer to other regions at a low price.

This dealer has across its own coverage of the sales area and the price reduction sales is called "channeling".The dealer introduced that the campaign in the milk powder industry has always existed, but since 2019, there have been more and more phenomena in various places.He said that the price reduction sales of milk powder is to solve the difficulties of the industry. On the one hand, the pressure of dealers and milk powder manufacturers on the one hand; on the other hand, consumer consumption capacity has decreased in the past two years, more sensitive to milk powder prices, and price reduction sales are also satisfied.Consumer needs.

According to a reporter from China News Weekly, it was found that on a flagship store of an e -commerce platform, a 1 -segment baby milk powder positioned in the mid -to -high -end, which was basically stabilized at about 340 yuan in a can before 2022.The low price of about 300 yuan, the price of single can in May this year is only 280 yuan.The aforementioned dealer said that this milk powder is estimated to be 20 yuan cheaper 618.The price reduction of this milk powder is not a special case. China News Weekly searched for the online price of several other hot -selling domestic infant milk powder. The lowest price has appeared in recent years, and the price reduction activity has become more frequent.

The milk powder sales staff of a large chain mall in Beijing said that since last summer, the price of infant milk powder has been declining. Although the price has not reduced the price, many brands have participated in the event with 688 minus 100 activities.It has been continued for several months.Taking a mid -to -high -end baby milk powder as an example, the price has dropped from 350 yuan last year to about 300 yuan.

The sales staff said that the prices of baby milk powder have risen all the way in recent years, and consumers recognize high -priced products.Compared with the imported milk powder sold by the mall, some domestic and high -end domestic milk powder prices are tens of yuan to 100 yuan. Now the domestic milk powder price is reduced, and gifts such as urine and soy oil are also included to carry out promotion.

Song Liang, the leader of the expert group of the China Nonggu Dairy Alliance and the analyst of the dairy industry, told China News Weekly that from a macro perspective, the birth population decreased, and the broader market of the infant milk powder industry was shrinking.After the population birth rate declined, in order to compete for more market share, enterprises and then competed with each other to form a price war.He said that the price war in infant milk powder has been intensified from last year to this year.As the average price of milk powder decreases significantly, corporate revenue and profits have also declined.

The market share of the domestic milk powder brand Australia and Dairy is ranked among the top five of Chinese infant formula milk powder.The person in charge of the Public Affairs Department introduced to China News Weekly that in recent years, with the decline in the birth population, the market demand has been affected to some extent. The overall development of the domestic baby formula milk powder industry has slowed down, the brand competition has become increasingly fierce, and the Matthew effect has continued to prominent.

Mr. Zhang, who lives in Beijing, ushered in his first child last year and bought infant milk powder for nearly a year.He told China News Weekly that he basically purchased milk powder in production areas such as Australia, New Zealand, and the price has not changed significantly recently.He chooses milk powder mainly to focus on nutrients such as minerals, linoleic acid, and milk iron protein. He said that similar formula ingredient milk powder is cheaper than domestic brands.

The consumer groups of domestic and imported milk powder are very different.The aforementioned dealer said that there is a poor information in the milk powder market, different channels and regional consumers have different awareness of the brand, and the choice of purchasing domestic or imported choices is also different.Song Liang analyzed that the price of domestic milk powder is led by large brands, which affects most domestic brands.Foreign brands do not participate in the price war, the price disk is relatively stable, and the price war is small.In general, "domestic capital shares have declined, and foreign capital shares have a significant rise."

Song Liang said that from the perspective of economics, the premise that the birth population is declining, and the premise of ensuring that the entire sales are not declining is to stabilize the price disk.It is very low, no matter how low, it will affect the survival of the industry. "

"It is difficult to digest for excess capacity in 5 to 10 years"

At the end of April, major milk powder companies were reported in 2022.The revenue of Yashili International Holdings Co., Ltd. fell by 15.7%, and Australia Youyai Dairy Co., Ltd. was 43.5%in 2022, a decrease of 4.9%compared to 48.4%in 2021, and gross profit from 4.15 billion yuan to 18.3%year -on -year to 3.39 billion yuan.Essence

In addition to the shrinking and price war brought by the decline in population fertility, there are other reasons for the decline in the performance of milk powder companies.Song Liang introduced that on the one hand, the price of commodities from 2021 to 2022 has global inflation, causing the main raw materials such as whole -fat powder and milk powder to rise; on the other hand, the epidemic causes logistics interruption, and the circulation of foreign raw materials after entering ChinaNot smooth, coupled with factors such as secondary formulas and overlaying new national standards, all of which have led to a significant increase in the cost of manufacturers and the decline in net profit of enterprises.

Beinmei's 2022 financial report shows that due to the severe market environment and the progress of the second formula registration progress, product sales discounts have increased compared with the previous year, resulting in the corresponding gross profit margin decreased by 3.05%year -on -year, and some raw material prices increased by 1.06%year -on -year.

The so -called "secondary formula registration" refers to the first batch of infant milk powder registered by the formula in 2017 by the registered period of five years.It is understood that the cost of secondary formula registration applications is relatively high, usually from one million yuan to 10 million yuan. Some small and medium -sized milk powder companies directly abandon their applications.In addition, the requirements of the new national standard for milk powder products are more stringent than the old national standards. Some corporate products cannot meet the standards and cannot produce milk powder that meets the new national standards.

Democracy is also one of the factors that affect corporate revenue.According to Song Liang, before 2022, the domestic milk powder capacity was excessive. The essential reason was that the baby formula milk powder was too high. On the one hand, milk powder companies hoped to build more factories to enrich milk powder product lines; on the other handPolicies have been introduced, new formula indicators and milk powder products series have been launched one after another, which has spawned new factories.Although industry experts have long estimated that the decline in population will reduce demand, manufacturers have not made adjustments in time, "the excess production capacity of domestic milk powder will be difficult to digest in the next 5 to 10 years."

In the first half of 2022, Australia Youyou conducted a round of destocking operations on its milk powder business, allowing Australian Young to decline by 37.6%of the revenue of milk powder business in the first half of the year.

The panoramic view of the Chinese dairy industry chain released by the China Business Research Institute in January this year shows that in 2018, the national milk powder output reached the lowest 968,000 tons in recent years.The output of milk powder has declined slightly.The production of milk powder in 2020 was 1.012 million tons, a year -on -year decrease of 3.77%. In 2021, the production of milk powder was 979,000 tons, a year -on -year decrease of 3.25%.

According to data released by Boao's Maternal and Baby Industry Research Institute in 2021, from 2010 to 2018, the growth rate of the Chinese maternal and infant market continued to accelerate, reaching the peak of 18.5%in 2018.However, after that, the decline in the number of newborns led to the suspension of the rapid growth of the market. In 2020, the increase fell to 13.3%.

Where is the road to transition

In recent years, many milk powder companies have launched adult milk powder brands or new products: in July 2022, Jiabeite launched the "Huju" series of milk powder for middle -aged and elderly people; in September 2022, Danone launched the first time for the Chinese market for the first time.The middle -aged and elderly milk powder series products are "dare"; in October 2022, Junlebao fully upgraded the adult milk powder brand product line.

Australia said to China News Weekly that due to problems in the middle -aged and elderly market, the market size is not very large.Compared with the categories of infants and children's milk powder, middle -aged and elderly milk powder categories do not have enough stocks, and middle -aged and elderly milk powder consumers need to be further cultivated.

Song Liang said that now the company's launch of adult milk powder and old milk powder. On the one hand, the demand for the adult milk powder market is slowly becoming larger. On the other hand, excess capacity can withdraw from infants and children to make adult milk powder.However, adult milk powder is mainly full -fat powder, which is more expensive than baby milk powder, but the price is much lower than that of baby milk powder.

Mu Shanbo, chairman of Yipin Dairy Group, said in an interview with the media at the end of last year that although the three -year epidemic has further improved the nutritional needs and nutritional awareness of citizens, it is difficult for adult milk powder to make up for the decline in the decline in the infant milk powder market in the short term.Impact.Adult milk powder may have better performance at five to 10 years, even more than the market space of infant milk powder.

At the same time, in recent years, some Chinese maternal and infant companies have begun to overseas.According to the 2022 report of Jianhe International Holdings Co., Ltd., the company's annual income of more than half from infant products.However, in the Chinese mainland market, the income of infant formula milk powder increased slightly by 0.8%slightly in 2022, and the income of other infant products fell by 12.3%.On the contrary, the income of adult nutrition and care products increased by 14.1%, and the income of pet nutrition and care products increased by 26.8%, which ensured that the overall annual increase of 6.4%in the Chinese mainland market.

According to geographical division, the revenue of Jianhe International Holdings Co., Ltd. in 2022 Australia and New Zealand and North American markets increased by 10%and 144%respectively, exceeding the 6.4%increase in mainland China, which led to the decline in mainland China revenue.%.Akash Beidi, the temporary CEO of Jianhe, said that global expansion and product diversification are the focus of Jianhe Company this year and later.

HIBOBI, a Chinese maternal and child cross -border e -commerce company, was established in 2019 and positioned the main battlefield in the Middle East.It is understood that the Middle East has a huge dividend, and the development of the local light industry is relatively insufficient. The per capita disposable income is high, and the unit price of e -commerce customers can reach $ 150.HIBOBI is currently completed PRE-A financing, with a financing amount of millions of dollars.

Song Liang introduced that globally, in the face of the decline in birth rate and the shrinking market, foreign companies such as Danone and Nestlé choose the direction of development in the field of professional nutrition.Professional nutritional products are formulated and need to conduct clinical trials and obtain relevant national certification.At present, foreign companies have strong advantages in related technologies.Local companies have advantages in understanding consumers and markets and can meet consumer needs.

Australia revealed that in the context of more and more aging population, consumers' demand for sophisticated nutrition and food function is also becoming increasingly obvious.Australia also is also differentiated with middle -aged and elderly milk powder products. The direction of the company's layout is to target the body's immunity and cardiovascular and cerebrovascular health.Song Liang also said that domestic professional nutritional products are still in the research stage, which requires the state to formulate relevant rules and approval, and there will be a long way to go in the future.

According to market monitoring and data analysis company Nielsen IQ, the infant formula market insights and trend reports released on May 31st, in the context of the decline in population dividends and decline in fertility, the mother and baby related categories of the Chinese market, such as milk powder, babies, babiesAuxiliary food, diaper, and maternity milk powder related categories have declined in 2022.

On May 11, Lei Xiaoshan, managing director of the China Market Research Group (CMR), said in an interview with Reuters that it takes one or two years or even three years to implement and execute the company's transformation from a single maternal and infant enterprise.Before that, they will have to face the dilemma of declining profits and income.CMR also predicts that the market size of Chinese children's products and services (including education) will be reduced by 15%to 20%in the next five years.