New Dairy Industry'S "Asymmetric" Breakthrough: Fight The Bright In Yili Gap

At present, Xi Gang was full of ambition.

He passed one by one, toasting, negotiating, elegant and heroic, full of control. Xi Gang is the chairman of the new dairy industry. On May 20, which is also the day of the shareholders' meeting of new dairy, the company announced the strategic plan for 2021-2025, which mentioned the blueprint of "doubling in three years" and "becoming one of the world's leading dairy enterprises in five years".

According to the equity incentive plan previously issued by the new dairy industry, the target is that the growth rate of consolidated operating income and net profit in 2023 will not be less than 95% compared with that in 2020, that is, the operating income and net profit will double within three years. Based on the revenue of 6.749 billion yuan in 2020, the new dairy industry will enter the 10 billion revenue camp in 2023. Over the same period, Yili's revenue reached 96.524 billion yuan; The revenue of Mengniu is 76.035 billion yuan; Guangming's revenue was 25.223 billion yuan.

The breakthrough point of new dairy industry lies in the low temperature milk market. According to Euromonitor data, the volume and price of low-temperature fresh milk increased significantly after 2015, and the growth rate of retail scale exceeded that of normal temperature milk. In 2019, the retail volume increased by 6.5%, the retail unit price increased by 4.8%, the retail scale increased by 11.6%, and the volume increased by more than the price.

In addition, according to Euromonitor data, among the low-temperature fresh milk, the top 3 retail enterprises in 2020 are Guangming / Sanyuan / xindairy, accounting for 13.7% / 8.7% / 5.8% respectively, and CR3 (the top three business scale) is 28.2%, which is far lower than normal temperature milk.

For this market, the new dairy industry put forward the "fresh Cube" strategy, continued to accelerate the completion of the national layout through stock development and M & A integration mode.

This is Yili, Mengniu have not yet strong erosion plate, the biggest opponent is Guangming.

The market reaction seems to have been muted. On May 20, the share price of new dairy opened at 17.9 yuan, then rose moderately and closed at 18.15 yuan on the same day. After digestion on Sunday, the closing price on the 24th returned to below 18 yuan.

product

In the "fresh Cube" strategy, the flagship product is the "24-hour" series, which provides consumers with fresh milk products with a shelf life of 24 hours.

Behind this is the potential high attrition rate, which the new dairy industry seems to have solved. Zhu Chuan, President of the new dairy industry, disclosed to the 21st century economic reporter that there were losses at the initial stage of listing, but with the improvement of the order system, this problem has been solved.

"Just like the weather forecast, how big the impact of the weather is, how much is the impact of the surrounding people, and how much is the impact of the temperature. This is what we have accumulated over the years and basically have internalized the key influencing factors into the company's model." Xi Gang explained to reporters. However, he did not shy away from saying that reducing the loss recovery rate would also sacrifice part of the market demand.

"In the core market, the loss rate is very low, and the overall gross profit level is very high. After digesting the loss recovery costs and cold chain costs, there is still a good profit margin." New dairy industry Secretary Zheng Shifeng said.

In addition, the new dairy industry has also launched a number of new products, such as lactose free oatland Shuxin milk, 0 sucrose active moistening crystal ball, bubble yogurt and other new products, with the intention of sinking.

The basic reason why the new dairy industry chooses the low temperature milk market is that the normal temperature milk has become a red sea, and there is little room for it. According to Euromonitor data, the CR2 of Yili and Mengniu groups reached 85.7% in 2020, and they were undisputed leading enterprises. The market share of other enterprises was no more than 2%. Among them, Guangming ranked the third in the field of normal temperature milk with a market share of 3.2% in 2010. By 2020, the market share of Yili and Mengniu groups had decreased to 0.4%, ranking the 13th.

The development of cold chain logistics gives the possibility of large-scale development of low-temperature milk. According to the data of China Federation of logistics and purchasing, in 2019, the capacity of cold storage in China will be 60.52 million tons, with a year-on-year increase of 15.55%, and the number of cold chain transport vehicles will be 214700, with a year-on-year increase of 19.3%. The CAGR (compound annual growth rate) of the two countries will reach 16.8% / 26.8% respectively from 2011 to 2019.

"How to establish some asymmetric competition and how to make the enterprise unique are very important. Asymmetric competition will become more and more intense in the field of dairy products." Xi has just made a statement.

merger

The biggest advantage of new dairy industry lies in milk source.

Pasteurized milk generally requires milk source within 400 km from the factory. After 2008, the overall number of dairy cattle in China has shown a downward trend, especially from 2016 to 2018, the domestic demand for environmental protection is becoming higher and higher. As a highly polluting industry, the breeding industry has been strictly regulated. Under the supervision of environmental protection, many pastures in the South have been closed down and small farmers have been withdrawn. At this point, the southern pasture resources are particularly scarce and become barriers.

According to the financial report, there are 13 self owned farms in total, including 4 in Yunnan, 3 in Sichuan, 2 in Ningxia, 2 in Gansu, 1 in Zhejiang and 1 in Shandong, all of which are close to the processing plant.

In terms of geographical distribution, the new dairy farms are mainly concentrated in the southwest base camp. At the same time, due to the better resource endowment in Ningxia, Gansu and other northwest regions, which are suitable for cow breeding, and are relatively close to the southwest base camp, the new dairy farms are developed in the northwest to provide raw milk support for the base camp. In 2019, the new dairy industry will subscribe for 9.28% of the shares of modern animal husbandry, which will provide more than 400 tons of raw milk for the new dairy industry every day. The self-sufficiency rate of raw milk in new dairy industry can reach 40% - 50%.

Behind the abundant milk source is the continuous merger and acquisition of new dairy industry. In addition to modern animal husbandry, in 2020, the new dairy industry will be incorporated into Xiajin dairy and Fuzhou aoniu dairy industry, and in 2021, it will acquire a new brand of tea drinks, a sour cow.

"We should be able to grasp some cycles of industry development. In terms of investment, we take the lead in animal husbandry and breeding. If we didn't invest at the beginning, now the cost of investment has basically doubled, which is based on the understanding of the industry. The second point is the parent company's strategy. Raw materials are always the most important to do a good job in low-temperature milk. Modern animal husbandry is the only one with large-scale ranching in the south, which is very important for the southern market. " Xi Gang explains the logic of merger and acquisition of new dairy.

Different from the M & A expansion of new dairy industry, Guangming chooses endogenous growth and adopts vertical integration expansion mode. According to the financial report, Guangming has 28 large-scale pastures, mainly located in Shanghai, Jiangsu, Zhejiang, Tianjin, Henan, Hubei, Shandong, Heilongjiang and other places, with nearly 90000 heads on hand. On March 17, Guangming released the fixed increase plan, and the raised funds were planned to be used to invest in its own pasture.

The two models have their own advantages and disadvantages. Through M & A, the new dairy industry quickly owns local milk sources, factories and high-quality brands, and exploits the market with the help of local brands, but it faces the risk of integration; Bright is steady and slow to expand.

Another advantage of new dairy industry is logistics. Relying on the new hope group's fresh life cold chain logistics company, the basic realization of national layout.

It is worth noting that although the new dairy industry has many advantages, the promotion of low-temperature milk business is still hindered and long-term. Take Sichuan, the base of new hope, as an example, the 21st century economic reporter has been searching for Babbitt's milk in Yibin City, Sichuan Province. Many convenience store owners said that market demand has not yet opened, and there are logistics problems. Yibin City is the third city of Sichuan economy.

In addition, with the emergence of ESL milk with a shelf life of about 15-25 days, Yili and Mengniu, which have national channel advantages, may invade again. It is because of the advantages of Inner Mongolia milk source and the national sales channels that Yili and Mengniu are in a duopoly situation of normal temperature milk.

There is not much window left for the new dairy industry.

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