The secondary formula registration gate is opened, and the infant milk powder brand continues...

Recently, the banners of Yili Jinling and Junlebao appeared in the new batch of formula registration approval list, and they were the first to get the "admission ticket" of the new national standard milk powder, and the prelude to the registration of the secondary formula of infant milk powder was officially opened

According to a reporter from the Beijing News, Yili and Junlebao have both made market plans for the new national standard products, and other domestic and foreign milk powder top brands are also preparing for the registration of secondary formulas

According to industry estimates, in the five years after the first formula registration was implemented in 2017, about 70% of domestic infant milk powder brands were eliminated

With the further increase in the concentration of the infant milk powder industry, the industry predicts that the price scuffle of infant milk powder will continue, the gross profit space left for channel dealers will be compressed, and the mother and infant channel will enter the stage of "big waves wash out the sand"

The first batch of new national standard milk powder "released"

On March 18, 2021, the National Health Commission issued a new national standard for infant formula food series, which provided a standard basis for the secondary formula registration

"Strictly speaking, 2023 is an important node for the registration of the secondary formula

According to Junlebao, starting from the feedback draft of the new national standard in June 2020, Junlebao Banner Dairy spent one year benchmarking against the new national standard, and it took 4 months from preparation to trial production, and has undergone product stability verification since then.

Yili revealed to the Beijing News reporter, "Compared with the old national standard, the new national standard has presented a greater challenge to every brand in the industry

Difficulty registering overseas factories

According to the Beijing News reporter's verification, at present, domestic and foreign top milk powder brands are actively preparing for the new national standard products, but compared with domestic factories, it is not easy for overseas factories to obtain secondary formula registration

A relevant person in charge of a foreign milk powder brand revealed to a reporter from the Beijing News that its European factory audit has been completed, and samples of the new national standard have been sent to China for secondary audit and testing.

For Ausnutria, which has production capacity at home and abroad, the new national standard has always been the focus of its attention

According to relevant regulations in China, infant milk powder produced by overseas factories enters the Chinese market through general trade, and it is necessary to obtain the factory registration qualification in China and the milk powder formula registration qualification at the same time

In February this year, Mead Johnson China acquired a 100% stake in Mead Johnson Goat Milk Co.

Dairy expert Song Liang believes that Mead Johnson China's acquisition of Mecocote and Danone's acquisition of Obiga are the first to look at the formula registration qualification of the latter's infant milk powder, followed by the deployment of new categories such as goat milk powder

30% to 50% of milk powder brands are expected to disappear

Compared with the implementation of the formula registration system in 2017, channel dealers generally have a stable attitude towards secondary formula registration, and it is expected that the market concentration of infant milk powder will further increase

According to public data, before the implementation of the formula registration system, 108 domestic milk powder manufacturers had more than 2,300 formulas

According to Song Liang's estimation, after the implementation of the first formula registration, about 70% of domestic infant milk powder brands have been eliminated
.
With the increasing concentration of the milk powder market, many small brands can only achieve an annual revenue of 10 to 20 million yuan, and the cost of formula registration and clinical verification is not low, so many small and medium-sized enterprises will naturally withdraw, and some Milk powder companies will be merged
.
Therefore, after the implementation of the secondary formula registration, from the perspective of declaration, about 40% of the milk powder brands will disappear
.

"The channel's attitude towards the new national standard products is relatively stable, and they are not as worried about small and medium-sized brands as the first formula registration
.
The second formula registration is mainly concentrated on big brands, and there will be no major problems
.
" "Founder Tang Li believes that leading companies have strong R&D strength and brand power, and their original products have a high probability of passing the secondary formula registration, but small brands with an annual income of one or two hundred million in technology research and development, adding equipment, There is a lot of pressure in clinical verification, registration application, etc.
, and may choose to "sell out" or withdraw
.
"We infer that after the implementation of the secondary formula registration, 30%-50% of the brands will withdraw, and the phase-out period will be about 3 years
.
"

Junlebao believes that the new national standard superimposes the registration of secondary formulas, the state has stricter supervision on the infant milk powder industry, and the industry access threshold is tightened, and the market will accelerate the concentration of leading companies with technical advantages and product advantages
.
It is more beneficial both for the protection of consumer interests and for the supervision of the industry
.

"There are no real small and medium-sized brands anymore, and they were basically eliminated three years ago
.
" said Li Maoyin, chairman of Maternity and Infant United Industrial (Shanghai) Co.
, Ltd.
, consumers in third- and fourth-tier cities are now beginning to pay attention to brands, and small and medium-sized milk powder It's getting harder and harder for brands to survive
.
As far as its mother and baby channels are concerned, the number of milk powder brands has decreased by more than 10%
.

"I don't pay special attention to the registration of the secondary formula.
Now our channel sells all the top brands, and we are more confident
.
" Wu Rui, the owner of Jiangxi mother and baby shop, told the Beijing News that although his store is located in the Jiangxi county market, the baby products he operates Infant milk powder is basically dominated by domestic first-line brands.
"In the past, there were about 30 milk powder series combined, but now about half of them are cut
.
Only 1-2 models of small and medium-sized brands are reserved, and foreign milk powder only retains a2 to the beginning and Aitamei.
Zhuo Cui, other brands do not have natural traffic and cannot help acquire new customers
.
Now not only is the market concentrated, but many marketers of small and medium-sized milk powder brands are also heading to the top
.
”

Channel price war will continue

With the further increase in the concentration of the infant milk powder industry, the profits of distributors did not rise but fell, and the elimination of channels and brands were carried out simultaneously
.

According to Li Maoyin, the sales of infant formula powder in the maternal and infant channel still account for a relatively high proportion, the first- and second-tier markets account for 45%-50%, and the third- and fourth-tier markets account for 65%-75%.
“Compared with three or four years ago, the gross profit of infant milk powder in third- and fourth-tier maternal and infant stores has dropped by more than ten percentage points
.
The decline in gross profit is related to the increase in the concentration of milk powder brands.
After the Internet channels divert customers, the stores will also need to reduce prices
.
2021 About 20% of mother and baby stores across the country are closed, and another 20% are expected to close this year
.
"

"After the birth rate has decreased, the passenger flow has decreased, and the brand concentration has increased, the stores are vying for several big brands.
The most effective way is to increase the promotion
.
" According to Tang Li, the milk powder price war has continued from the end of 2018 to the present.
And getting worse
.
Before the price war, a single can of milk powder sold at 350-450 yuan, the gross profit was 150-200 yuan; milk powder sold at 300-350 yuan, the gross profit was 120-150 yuan; the price was 200-300 yuan The gross profit of milk powder is between 80 yuan and 150 yuan
.
Now under the price war, the gross profit has to be cut by 2/3
.
"Compared with the brand side, the channel is more involved, there is no good way to obtain passenger flow, and it is not driven by capital like the online channel, and it has entered the stage of sweeping the sand
.
"

Wu Rui sighed that now the channels can no longer control the purchasing behavior of consumers, especially the new generation of mothers, who prefer domestic milk powder and are more "partisan", and will actively check whether the brand has a black history, whether it is OEM, and whether the formula, milk The source and process are all-round attention
.
In order to increase store profits, Wu Rui's strategy is to focus on first-line infant formula brands, with small profits but quick turnover, and at the same time increase the sales of student milk powder and adult milk powder to increase the gross profit margin, which is also a common response method adopted by many mother and baby brands
.