Bullish expectations: Mengniu to open Oceania centre and eyes double digit growth

By Tingmin Koe contact

- Last updated on GMT

Mengniu will be accelerating its overseas expansion.
Mengniu will be accelerating its overseas expansion.

Related tags: mengniu, Dairy, Marketing

Following the recent establishment of its first overseas factory in Indonesia, Mengniu continues to grow its international footprint, with its Oceania centre set for completion this year.

The Chinese dairy giant is also aiming a double digit growth for all of its portfolio this year.

CEO Lu Minfang made the above announcement in the annual meeting with its corporate partners held last month.

Since its inception in 1999, the firm’s sales performance had skyrocketed 1,800 times, he said. 

Moving into its 20th​ year of establishment, he said that “Mengniu will accelerate its growth, we will complete the building of the Oceania centre, forming the ‘double foreign centres’.”

FoodNavigator-Asia​ understands that the Oceania centre may be set up in New Zealand or Australia.

As for the double foreign centres, they refer to companies that are set up to drive sales in markets where they exists. 

He added that Mengniu has accelerated its overseas expansion, operating over 5,000 retail branches last year.   

Factory wise, it currently has two overseas plants in Indonesia and New Zealand. Lu previously said he hoped that Mengniu would become the number one yogurt brand in Indonesia​.

Domestic plans

Lu said he expected an ambitious three digit growth for Mengniu’s fresh milk portfolio, which would amount to a value of RMB$1.1bn.

To do so, Mengniu will focus on pushing product sales in East, North, South, and Central China.

Thus, it is set to build a logistic channel exclusively for cold chain, in order to enhance quality control.

In addition, the firm will strengthen its flagship products. For example, it will continue to focus on its “Milk Deluxe” for spearheading growth in the premium product category.

On the other hand, the firm will beef up its new sales models, such as its gift card, experiment with different sales strategies, alleviate customers’ pressure in product warehousing and product transportation.

To maintain leadership in the chilled product category, it will focus on driving the sales of both "Champion" and "Yoyi C".  

“In year 2019, our goal is still to ‘win’! To win in our products, to win in our brands, to win in our channel, to win in innovation, to win in culture,” ​Lu said.

“We will utilise the newest technologies, create new product category, lead new trends, enter new markets. (We will) cater to nutritional and personalised demands. Through enhancing product packaging, flavours, functions, (we will) expand consumption, bringing better nutrition, more options and better enjoyment for the consumers.”

In January to June last year, its revenue from liquid milk, ice cream product, and milk formula businesses also grew by 14.0%, 12.8% and 64.9% respectively on a YoY basis.

Endorsement power

Mengniu was the official 2018 FIFA World Cup sponsor and its brand image had improved greatly since the World Cup, Lu said.

Early last year, it commenced the World Cup themed packaging for all its products. 

It also invited FIFA World Player of the Year Lionel Messi to be its brand ambassador.

Citing third party statistics, he said that Mengniu’s brand power grew 11.4%, clinching the top spot amongst its peers for the first time in five years.

Since the World Cup ended, the consumers’ willingness to purchase its products had also grown by 20%.

“In the future, we will utilise opportunities that World Cup and international competitions offer to win more battles and bring back more gold trophies.”

Besides sports competition, the firm will further enhance its TV endorsement, working with TV programs that have garnered high ratings.

For instance, it will work with CCTV, Hunan TV, Zhejiang Satellite TV, Tencent, IQIYI, and popular programs such as The Voice of China, Idol Producer, Chinese Restaurant, and Back to Field. 

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