Research Report on Application of D70 & D90 in the Market of Formula Milk Powder for Infants in China

May 2010 | 90 pages | ID: RF24834EA23EN
Beijing Orient Agribusiness Consultant Co., Ltd

Abstracts

Main Conclusions

China’s infant/young child’s formula milk powder market witnessed a fast growth from 2000-2009 thanks to various driving forces, and the market capacity rose from 106,000 tons in 2000 to 630,000 tons in 2009, an average annual growth as high as 22.90%.

Three standards on infant/young child’s formula milk powder products are being amended, i.e., Infants Formulas, Follow-up formulas and Formulas for Special Medical Purposes Intended for Infants. These three standards have stipulations on various aspects of the quality and safety of infant/young child’s formula milk powder products, and provide scientific reference for heightening the accession threshold of the infant/young child’s formula milk powder industry, for regulating the market behavior of producers, for meeting the nutrition demand under normal circumstance and special demand under special medical circumstance of infants and young children so as to guarantee the health growth of children. These relevant standards are significantly positive for the market expansion of the application of D70 and D90 in infant/young child’s formula milk powder in China.

At present, D70 and D90 are imported from different sources including West Europe, North America, Oceania, Latin America and East Europe. Comparatively speaking, China imports D70 and D90 more from West Europe, especially France, followed by Finland, Ireland, the Netherlands and Germany. Western European companies that have successfully explored the market of whey products including D70 and D90 in China

The new national standard of infant/young child’s formula milk powder clearly stipulates that whey powder for formulas of products must be demineralized whey powder, and there is a clear maximum limit on impurity and ash content. This is positive towards D70 and especially D90 which enjoy high product quality. On the other hand, although the mixture of whey protein concentrate and lactose may replace the nutrition value of D90 to a certain extent and can save partial cost, yet this composition cannot completely replace the nutrition effect of D90. The combination of whey protein concentrate and lactose is just a necessary condition of the nutrition effect of D90, but not the sufficient condition. Therefore, to be strict, this type of combination is not in line with the stipulations of the new standard.

Currently, the output of infant/young child’s milk powder is 630,000 tons in China, of which most are low/medium-grade products, especially the products for the rural and township market. These low-grade products use a large amount of low-quality D40 and D50, or even non desalted whey powder such as sweet whey powder of even lower cost. Although this is not in conformity with the stipulations of the new standard which is about to be enacted, yet it is common practice. After the melamine incident, the Chinese Government takes the quality and safety issue of infant/young child’s food including infant/young child’s formula milk powder to a strategic height, the new standard which is about to be enacted learnt from international standards, and the market supervision shall be further strengthened.

Based on BOABC tentative estimate, only 1/3 of the 630,000 tons of output of infant/young child’s milk powder is applied with D70 and D90. from the perspective of the future trend, the proportion of breast feeding may further decline due to the low-growth of population, whereas the market capacity of infant/young child’s milk powder shall further grow. The new standard of infant/young child’s formula milk powder provides an opportunity of the application of D70 and D90 in infant/young child’s formula milk powder. In addition, more and more processing companies shall apply D70 and especially D90 for improvement of added value of products. BOABC expects a double digit annual growth rate of D70 and D90 in China from 2009-2013.

Contents

Main Conclusions

1. OVERVIEW OF INFANT/YOUNG CHILD’S FORMULA MILK POWDER IN CHINA

1.1 Market Overview
1.2 Market Analysis of Formula Milk Powder of Different Grades
  1.2.1 Low-end Market of Infant/young Child’s Milk Powder
  1.2.2 Medium-grade Market of Infant/young Child’s Milk Powder
  1.2.3 Top-end Market of Infant/young Child’s Milk Powder
1.3 Analysis of Marketing Channels
1.4 Analysis of Market Price
  1.4.1 Overview of Market Price of Infant/young Child’s Milk Powder
  1.4.2 Price Comparison of Domestic and International Brands of Infant/young Child’s Milk Powder
1.5 Analysis of Profit Generation Ability of Infant/young Child’s Formula Powder
1.6 Analysis of Growing Potential of Market Consumption Demand
  1.6.1 Current Status of Consumption Demand for Infant/young Child’s Milk Powder
  1.6.2 Potential of Consumption Demand for Infant/young Child’s Milk Powder
1.7 Analysis of Market Share of Domestic and Foreign Brands
1.8 Standard of Infant/young Child’s Formula Milk Powder
  1.8.1 Evolution of Market Shares of International and Domestic Brands
  1.8.2 Demand
  1.8.3 Price
  1.8.4 Sales Promotion
Column 1 Major Conclusions of the Evaluation Report on Consumption of Infant/young Child’s Food in Wenzhou City
1.9 Standard of Infant/young Child’s Formula Milk Powder
  1.9.1 Overview of the Amendment of Standard of Infant/young Child’s Formula Milk Powder
Table 1.5 List of Dairy Quality and Safety Standards
  1.9.2 Major Content of the New Infant/young Child’s Formula Milk Powder Standard
  1.9.3 Impacts from the New Standard on Infant/young Child’s Formula Milk Powder

2. ANALYSIS OF MAIN MARKET PLAYERS OF INFANT/YOUNG CHILD’S FORMULA MILK POWDER IN CHINA

2.1 Yili
  2.1.1 Company Profile
  2.1.2 Composition of Products
  2.1.3 Source of Raw Milk
  2.1.4 Market Changes after Melamine Incident
2.2 Synutra
  2.2.1 Company Profile
  2.2.2 Product Composition
  2.2.3 Source of Raw Milk
  2.2.4 Market Changes after the Melamine Incident
2.3 Wondersun
  2.3.1 Company Profile
  2.3.2 Product Composition
  2.3.3 Source of Raw Milk
  2.3.4 Market Changes after the Melamine Incident
2.4 Firmus
  2.4.1 Company Profile
  2.4.2 Product Composition
  2.4.3 Source of Raw Milk
  2.4.4 Market Changes after Melamine Incident
2.5 Yashili
  2.5.1 Company Profile
  2.5.2 Product Composition
  2.5.3 Source of Raw Milk
  2.5.4 Market Changes after Melamine Incident
2.6 Beingmate
  2.6.1 Company Profile
  2.6.2 Product Composition
  2.6.3 Source of Raw Milk
  2.6.4 Market Changes after the Melamine Incident
2.7 Dumex
  2.7.1 Company Profile
  2.7.2 Product Structure
  2.7.3 Source of Raw Milk
  2.7.4 Market Changes after the Melamine Incident
2.8 Nestle
  2.8.1 Company Profile
  2.8.2 Product Composition
  2.8.3 Source of Raw Milk
  2.8.4 Market Changes after the Melamine Incident

3. ANALYSIS OF D70 AND D90 APPLICATION IN INFANT/YOUNG CHILD’S FORMULA MILK POWDER IN CHINA

3.1 Combination of Lactose and Whey Protein Concentrate to Replace D70 and D90
3.2 Application Scale of D70 & D90 in Infant/young Child’s Formula Milk Powder in China
3.3 Main Customers and Demand for D70 and D90
  3.3.1 Main Customers
  3.3.2 Demand
3.4 Import Volume and Price of D70 and D90 from Different Countries in 2009
  3.4.1 Main Origins of Import
  3.4.2 Import Volume and Price
3.5 Import Volume, Price and Market Share of D70 and D90 by Major Importers in 2009
3.6 Proportion of D70 and D90 in Phrase I, II and III Formula Milk Powder
3.7 Forecast of Growing Potential of D70 and D90 Application in Infant/young Child’s Formula Milk Powder, 2009-2013

APPENDIXES

Appendix 1: Balance Sheet of Milk in China, 2007-2009
Appendix 2: Balance Sheet of Full-cream Milk Powder in China, 2007-2009

ANNEXES

Annex 1： List of Main Importers of Skimmed Milk Powder, 2009
Annex 2： List of Main Importers of Whole Milk Powder no sugar added, 2009
Annex 3： List of Main Importers of Whole Milk Powder sugar added, 2009
Annex 4： List of Main Importers of Whey Products, 2009
Annex 5： List of Main Importers of Lactose, 2009
Annex 6： List of Main Importers of Butter, 2009

Tables & Figures

TABLES & FIGURES

Figure 1.1 Market Development Speed of Infant/young Child’s Formula Milk Powder in China, 2000-2009
Figure 1.2 Market Share of Famous Brands of Infant/young Child’s Formula Milk Powder, Jan. 2007 – Dec. 2008
Figure 1.3 Market Share of Famous Brands of Infant/young Child’s Formula Milk Powder, Jan. 2008 – Jan. 2009
Figure 6-1 Changes of Market Share of Foreign and Domestic Famous Brands, by Sales Amount, Sept., 2008 to Sept., 2009
Figure 6-2 Changes of Market Share of Foreign and Domestic Famous Brands, by Sales Revenue, Sept., 2008 to Sept., 2009
Figure 3.1 China Whey Products Importation Trend, By Month, 2006~2009
Table 1.1 Price Difference of Milk Powder Consumed by Urban Residents of Different Provinces, 2009
Table 1.2 Comparison of Composition of Marketing Channels of Famous Brands of Infant/young Child’s Formula Milk Powder, 2009
Table 1.3 Comparison of Factory and Retail Price of Some Famous Brands of Infant/young Child’s Formula Milk Powder, 2006-2009
Table 1.4 Urban and Rural Per Capita Consumption of Infant/young Child’s Formula Milk Powder, 2003-2009
Table 1.5 Changes of Sales of Infant/young Child’s Formula Powder of Different Brands in Wenzhou, Zhejiang from January to May, 2009
Table 1.6 List of Dairy Quality and Safety Standards
Table 1.7 Protein, Fat and Carbohydrate Index
Table 1.8 Vatamin Index
Table 1.9 Mineral Index Iron, Zinc, Sodum, Potassium, Magnesium, Copper and Manganese
Table 1.10 Optional Factors Index
Table 1.11 Other Index
Table 1.12 Contamination Index（Subject to Dry matter）
Table 1.13 Microbe Index
Table 1.14 Average Amino Acid Content in Breast Milk of Chinese People (mg)
Table 1.15 Protein and Fat Index
Table 1.16 Vitamin Index
Table 1.17 Minerial Index
Table 1.18 Other Elements That Can Be Chosen
Table 1.19 Other Index（Based on its dry matter）
Table 1.20 Indices of Pollutants (based on dry matter)
Table 1.21 Indices of Microorganisms
Table 1.22 Protein, Fat and Carbohydrate Index
Table 1.23 Vitamin Index
Table 1.24 Minerial Index
Table 1.25 Indices of Elements That Can be Chosen
Table 1.26 Other Index（Based on its dry matter）
Table 1.27 Indices of Pollutants (based on dry matter）
Table 1.28 Indices of Microorganisms
Table 2.1 Registration Reference on Yili Group
Table 2.2 Top 10 Leading Shareholders & Stock Distribution of Yili Group
Table 2.3 Important Sub Companies both at Home and Abroad of Yili (till the end of June 2009)
Table 2.4 List of Main Products of Yili Group
Table 2.5 Main Products Output of Yili Group, 2007-2009
Table 2.6 Raw Milk Procurement Scale and Prices of Yili Group, 2008-2009
Table 2.7 Registration Reference on Shengyuan Dairy
Table 2.8 Stockholders & Share Distribution of Shengyuan Dairy
Table 2.9 List of Main Products of Synutra Dairy
Table 2.10 Main Products Output of Shengyuan Dairy, 2006-2009
Table 2.11, Raw Milk Procurement Scale and Prices of Shengyuan Dairy, 2007-2009
Table 2.12 Registration Reference on Wondersun Dairy
Table 2.13 Shareholders and Stock Proportions of Wondersun Dairy
Table 2.14, Output of Main Products of Wandersun Dairy, 2006-2009
Table 2.15 Raw Milk Procurement Scale and Prices of Wandersun Dairy, 2007-2008，2006-2009
Table 2.16 Registration Reference on Feihe Dairy
Table 2.17 Shareholders and Proportion of Shares of Firmus Dairy
Table 2.18 Products of Firmus Dairy
Table 2.19 Output of Main Products of Firmus Dairy, 2007-2009
Table 2.20 Raw Milk Procurement Scale and Prices of Firmus Dairy，2006-2009
Table 2.21 Registration Reference on Yashili
Table 2.22 Shareholders and Proportion of Shares of Yashili
Table 2.23 Main Products of Yashili
Table 2.24 Output of Main Products of Yashili, 2007-2009
Table 2.25 Registration Reference on Beingmate
Table 2.26 Shareholders and Proportion of Shares of Beingmate
Table 2.27 Registration Reference on Dumex Infants/Young Children Foods Co., LTD
Table 2.28 Shareholders and Proportion of Shares of Dumex
Table 2.29 Outputs of Products of Dumex, 2007-2009
Table 2.30 Output of Main Dairy Products of Nestle (China) Co., Ltd., 2007-2009
Table 3.1 Price of WPC80, Lactose and D90 made in America in Shanghai on September 16th 2009
Table 3.2 Market Sizes of D70 & D90 in China, 2006-2009
Table 3.3 Leading Users and Their Demands of D70 and D90 in Chinese Market, 2009
Table 3.4 Imported quantity and price(CIF) of D70 & D90, By Country, 2009
Table 3.5 Import of Whey Product (HS04041000) by Processing Companies, 2009
Table 3.6 Import of Whey Product (HS04041000) by Trading Companies, 2009
Table 3.7 Import Volume, Price and Market Share of D70 and D90 by Main Importers, 2009
Table 3.8 Proportion of D70 in Phrase I, II and III Formula Milk Powder, 2006-2009
Table 3.9 Proportion of D90 in Phrase I, II and III Formula Milk Powder, 2006-2009