Mengniu's revenue rises 14.7%, but overall performance still lagging behind arch rival Yili
Yili earlier reported that its total revenue and growth rate peaked in its 50 year history, hitting a total revenue growth rate of 16.9% to reach RM$79.5bn (US$11bn) last year.
It highlighted that out of its 20 products, 11 brought in sales of more than RMB$1bn (US$149m), including key brands such as “Ambrosial”, “Satine”, and “Joy Day”.
According to its FY 2018 financial report, Mengniu said all of its “principal categories”, namely liquid milk, milk formula, and ice-cream saw growth.
In addition, its chilled category remained the market leader for the 13th consecutive year with double-digit revenue growth.
The launch of over 40 new products, such as room-temperature yogurt Xiaomanyao, BB-12, organic milk powder and goat’s milk powder, also reaped results.
In both room temperature product and chilled product segment, the market share of these new products have grew to reach 10.1% and 19.3% respectively.
Category performance
Liquid milk products were Mengniu’s biggest revenue contributor last year. It brought in RMB$59.3bn (US$8,8bn), which was 86.1% of the company’s total revenue. This was a slight drop from 2017, where liquid milk contributed 88.1% of the total revenue.
Room-temperature products such as Mengniu Pure Milk and high-end pure milk Milk Deluxe were the most popular products, with both registering double-digit growth in sales.
For Milk Deluxe, its packaging was also upgraded in May last year, adopting the “DreamCap” to replace drinking straw.
Milk powder products contributed the second highest to the revenue at RMB$6bn (US$893m) – accounting for 8.7% of the total revenue, which is slightly higher than 2017 at 6.7%.
Ice-cream was the third key revenue contributor at RMB$2.7bn (US$402m), growing at a “high single-digit” rate last year.
“The dairy industry (in China) maintained healthy development thanks to government policies supportive of revival of the industry. The continuous consumption upgrade and a growing middle class in China have given the dairy industry the drive to upgrade and optimize product structure, and the unfolding of the new consumption era is pushing dairy industry players to meet consumers’ demand for healthy, readily accessible and personalized products.
“As such, high-end, healthy, diversified dairy products have become growth engines of the industry, and leading players are resorting to developing new products and high-quality dairy products to seize market share,” the company said in its financial report.
Domestic and future plans
Mengniu said it would step up its route-to-market strategies this year.
For instance, it would hasten channel penetration into lower-tier markets, continue channel innovation and upgrade projects such as “Penetration into Towns and Villages Project”, which focuses on the 3rd and 4th tier cities, villages and towns.
Other projects slated for upgrade include the “Smart Network Action” and “Show Sword Action”.
With the Yoyi C factory in Indonesia in operation, it will also speed up its overseas business deployment and set up an Oceania centre to support the deployment of “two overseas centres”.
