China Baby Food Market

Baby Food Product in China

Chinese babies have a thirst for quality milk. What pushes industrialists to perfectly master the origin of their products. Danoneproves with the announcement on December, with a heavy investment of 240 million euros in a new manufacturing plant in Holland. Part of products manufactured in this country will be sold in China, where Danone now plays the card of highh range, with its international brand Nutricia. It has also concluded Tuesday, the transfer of its Dumex brand, which had been very heckled, to its Chinese partner Yashili. An assignment which amounts to EUR 150 million.

Danone in China

The coincidence in the calendars pushed Danone to explain the concomitance of the two ads. It prevents. They shed light on the strategy of the french group, which has made child nutrition one of the four pillars of its strategy. A strategy put in place by Franck Riboud, and Emmanuel Faber, appointed to the head of the company there are a little more than a year, continues while putting it to music according to its own partition.
In the Danone 2020 plan, presented in early November to investors, the infant nutrition division appears as one of the poles to stronger growth expected, with an annual increase between 7% and 10%. In 2014, this activity weighed 4.39 billion euros or one-fifth of the Group‘s sales. The overall objective for the world‘s number one dairy fresh is to achieve an increase in turnover of 5% in five years, against a growth estimated this year between 4% and 5%
However, shocks, Danone in has known. And severe. Particularly in China. After his alliance failed with Chinese Wahaha in dairy products, the french has been shaken by the Fonterra case. A false alarm to its New Zealand supplier in summer 2013 botulism has been plunging sales of infant milk in China. Its Dumex brand, parents dug in stores, has suddenly been shunned. The sensitivity of Chinese consumers, shaken by the scandal of milk melamine, remains high. This abrupt stop private Danone one of its main engines of growth. The Dumex brand has, therefore, to be transferred to Yashili. In July, when the publication of its half-year results,

Danone’s International brands

Danone, for its part, placing on its international brand Nutricia. The manufacture of the products out of the Chinese borders is in his eyes one pledges of its value-added. Danone relies also on e-commerce and specialty shops to distribute it. Ms.Cabanis says that ‘ today sales of infant products in China have regained their pre-crisis level. Where the interests ofDanone to strengthen its industrial facilities in Europe.
The choice fell on the site of Cuijk in the Netherlands, where the group already has a factory. Investment of EUR 240 million will double its capacity in 2017. The plant will manufacture the Nutricia international brand, and its variations Nutrilon and Aptamil, but also standard products. This project also proves the importance that keeps Europe in the game of Danone.
Christoph
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