China Business Daily (Reporter Zhou Ziyu) Mead Johnson, a foreign-funded milk powder giant, has been in turmoil, with news of mergers and acquisitions being heard many times, and finally changing hands twice. goat milk powder market.
In the eyes of industry insiders, Mead Johnson's move to deploy goat milk powder or reverse the decline in performance will take time to truly "return blood" after it has changed hands twice.
Layout goat milk powder
On February 23, a reporter from China Business Daily learned from Qichacha that the name of Mead Johnson has been changed to Mead Johnson Dairy (Tianjin) Co., Ltd., and the shareholder has changed to Mead Johnson Infant Nutrition Technology (Guangzhou) Co., Ltd.
Liu Li, the founder of Meco-Gate, withdrew, and Zhu Dingping, President of Mead Johnson China, became the chairman and general manager.
However, as of press time, Mead Johnson has not responded to the news.
It is understood that Mecocote was established in 1994, and its main business is to develop, produce and sell goat milk products including goat milk powder, goat milk tablets, liquid goat milk and milk beverages.
As a leader in foreign milk powder, Mead Johnson was established in 1905 and entered the Chinese market in 1993. In 2008, the Chinese market became Mead Johnson's second largest market.
However, Mead Johnson has always focused on infant formula milk powder, and has not set foot in the field of goat milk powder.
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Dairy analyst Song Liang told a reporter from China Business Daily that the move is first to obtain the domestic factories of Mecocote, so as to obtain more qualifications for formula registration; the second is to cut into the goat milk powder market segment.
In his view, Mead Johnson's supply chain system is mainly in foreign countries, which has been greatly affected by the new crown pneumonia epidemic. It urgently needs domestic factories to register formulas, and it will also deploy children's milk powder and adult milk powder in the future, and factory resources are scarce.
Regarding Mead Johnson's entry into the goat milk powder market, Tang Li, founder of Hunan Dad Ai Conceived Baby Co., Ltd., introduced to a reporter from China Business Daily that in the milk powder market, goat milk powder is still a good segment, maintaining a growth rate of about 15%-20%. In order to get rid of the declining performance, Mead Johnson needs goat milk powder as a new growth point.
Compared with self-built factories, milk sources and channels, acquisitions will come faster.
Zhongbei Blue Ocean FMCG brand marketing planning agency COO Wang Ziheng also told a reporter from China Business Daily that Mead Johnson's acquisition of Mecoco should be a helpless move under the pressure of performance growth, and cut into the goat milk powder market through "warming in a group".
It is understood that the competition in my country's goat milk powder market is fierce. In addition to the leader Ausnutria, Shengyuan and Mengniu have also entered the market for many years.
Last year, Yili, the domestic milk powder leader, acquired Ausnutria, and Feihe took down Lamb Miaoke, which stirred up the goat milk powder market. Recently, Junlebao also launched its first goat milk powder.
changed hands twice
In recent years, Mead Johnson's performance has shown signs of weakness.
In 2015, Mead Johnson's net profit fell by 9% year-on-year; in 2016, its net profit fell further to 16.6%; in February 2017, Mead Johnson was acquired by the international fast-moving consumer giant Reckitt Benckiser for US$17.9 billion.
Lijieshi said that nearly 1/3 of Mead Johnson's market is in China, and it is concentrated in first- and second-tier cities, and it is more interested in its development in the Chinese market.
However, the good times did not last long, and Mead Johnson changed hands twice due to the poor progress of measures such as channel sinking.
In February last year, Reckitt Benckiser officially stated that it would conduct a strategic evaluation of the milk powder business in China; in June of the same year, Reckitt Benckiser announced that it would sell its Mead Johnson infant formula and children's nutrition business in China, including those located in China, at a price of $2.2 billion. Production facilities in the Netherlands and Guangzhou, sold to Primavera Capital.
At the same time, Reckitt Benckiser will retain an 8% stake in the business.
On September 9 last year, Reckitt Benckiser announced that the business was officially completed.
The next day, Mead Johnson China announced the appointment of Zhu Dingping, former CEO of H&H Group in China, as President of Mead Johnson China.
Reckitt Benckiser's first half of 2021 financial report shows that the company's net income was 6.598 billion pounds, a year-on-year increase of 1.5%; excluding IFCN China (IFCN refers to infant nutrition), the net income increased by 3.7% year-on-year.
It can be seen that Mead Johnson's business in China has delayed Reckitt Benckiser to a certain extent.
It should be noted that for the reasons for the sale, Reckitt Benckiser said that the acquirer can help it sink the business into lower-tier cities.
Therefore, the progress of Mead Johnson's channel sinking measures after the acquisition by Primavera Capital has attracted much attention from the outside world.
Short-term or difficult to "recover blood"
How effective was Mead Johnson after being taken over by Primavera Capital?
In this regard, Wang Dingmian, the former executive director of the China Dairy Association, admitted to a reporter from China Business Daily that the reason for Mead Johnson's "decline" was its internal management and the excessive loss of the original middle and high-level personnel, and the lack of corporate backbones to boost morale.
And its marketing concepts and methods have remained unchanged for many years, which is too outdated.
More importantly, Mead Johnson's successors are all "laymen" in milk powder, and they don't know much about the milk powder market. From this point of view, it will take 3-4 years for Chunhua Capital to figure out a way after taking over the market.
Tang Li revealed to a reporter from China Business Daily that Mead Johnson has made a series of adjustments in team building and channel adjustment after being acquired by Primavera Capital, such as signing contracts with some large chain organizations and promoting key products.
However, in order to truly "recover blood" in the future, it still needs to re-energize in many aspects such as product positioning, channel development, price maintenance, and consumer communication, which will take a long time.
Regarding the market performance of Mead Johnson over the past six months, a milk powder distributor in the third- and fourth-tier markets admitted to a reporter from China Business Daily that Mead Johnson's channel sinking measures have not improved significantly over the past six months, and the channel strength is relatively insufficient.
A mother and baby shop owner in a second-tier city revealed to a reporter from China Business Daily that the sales of Mead Johnson Lanzhen products in her city have improved in the past six months, because the company has adopted the activity of "getting a new can of milk powder for free". guest.
However, "I don't know if it's a milk source problem. Our store Mead Johnson Lanzhen 1st Duan and Platinum Rui 1st Duan have been out of stock since November last year, which will once again affect the choice of many consumers, many newborn babies, etc. I can't afford it." A mother and baby shop owner in the Beijing market revealed to a reporter from China Business Daily that Mead Johnson Lanzhen 1 has been out of stock for a long time, and the warehouse in the region is also out of stock.
In addition, Mead Johnson also faces fierce market competition.
"In recent years, domestic milk powder brands have risen rapidly, fresh milk products are thriving, and the new generation of consumers no longer pursue foreign brands, which puts a lot of pressure on Mead Johnson's channels to sink." Wang Ziheng said.