Ambrosial (安慕希) , a new Greek yogurt by Inner Mongolia Yili Industrial Group (Yili) launched in early 2014, is now available in more cities in China. The recent cities where Ambrosial have entered are Chengdu and Chongqing in the western region and Hunan in the central region. The unique thing about the Ambrosial Greek yogurt is it an ambient yogurt drink, which can be stored in room temperature for up to five months. The other unique selling point of this Greek yogurt is it contains 35% more protein than ordinary yogurt.
Sources said Yili has the capacity to make 1,000 tonnes of Ambrosial Greek yogurt a year as of May 2014. With each pack weighing 205g, that represents a production capacity of only 4.878 million 205g packs of Ambrosial Greek yogurt per year. At the moment, a 12x205g pack Ambrosial Greek retails at RMB66. That’s equivalent to a revenue of only RMB 26.83 million calculated at retail price. As a comparison, Bright Dairy’s Momchilovtsi Bulgarian yogurt sales in 2013 reached RMB 3.22 billion at wholesale prices, up 106.5% year-on-year. Another Bright Dairy’s yogurt Changyou (畅优) drinkable yogurt recorded sales of RMB 1.19 billion at wholesale prices, representing a year-on-year growth of 35.2%.
Ambrosial Greek Yogurt
What the new Ambrosial Greek yogurt shows is China’s dairy companies are starting to embrace Greek yogurt, which is already a global phenomenon. One of the strangest trend in the yogurt market is China, together with Japan, is a key market for Bulgarian yogurt with Momchilovtsi （莫斯利安） being one of the more popular Bulgarian yogurt in China. In Japan, 60% of the yogurt is Bulgarian yogurt, according to a news report in 2009. Meiji Bulgarian spoonable yogurt is still the best selling spoonable yogurt in Japan.
Bright Dairy Momchilovtsi Bulgarian yogurt
Now, Greek yogurt is challenging Bulgarian yogurt in a country tipped to become a rising start in yogurt consumption. Should Chobani wait or should it start aggressively make China as its next frontier before it is too late? However, if you notice, the Ambrosial Greek yogurt is actually a yogurt drink, not spoonable yogurt.
For the spoonable yogurt category in China, the existing products are yogurt with fruit bites and traditional style yogurt (老酸奶). These traditional style yogurt usually takes the name of the local province, landmark or city such as old Beijing yogurt, old Mongolia yogurt and even old West Lake (Hangzhou) yogurt.
Yili yogurt with fruit bites and cereals
Mengniu Old Mongolia Yogurt
So far, the Greek yogurt has largely ignored the spoonable segment but it will eventually come and that’s when Chobani can shine if it takes the initiative.
Dairy Farm International, the operator of Giant hypermarket and supermarket in Malaysia, said this in its 2013 annual report. We do not know the exact revenue of Giant in Malaysia but looking at the statement, it does show the food business in Malaysia in 2013 was facing challenges.
Giant is a strange beast. It still has stores in run down shopping malls or malls with low footfall. Examples of these include South City Plaza in Serdang, the mall occupied by Giant Superstore Taman Connaught and Viva Home, which is a one-stop furnishing mall.
Food retailers in Malaysia are facing problem growing their revenues. Even the likes of Tesco, which is viewed by many as a successful hypermarket chain, only reported 1.83% growth in revenue in the 12 months to end-February 2014, the slowest growth in 8 years.
Tesco Malaysia turnover
What about convenience store? The revenue growth of 7-Eleven slowed to 6% in 2013, the slowest in three years. Despite revenue growing to a single digit, net income managed to grow at an outstanding rate of 27.9% in 2013 due to the shift towards higher margin products.
7-Eleven Malaysia turnover and net income
Based on publicly available information, Aeon Big revenue increased by only 4.4% in 2013 to RM 1.66 billion, which shows once again 2013 was a bad year for food retailers.
Raising the profitability level is the key now as revenue growth grinds to a halt. That is why Tesco is heavily focusing its attention on private label, which offers higher margins. Aeon and Aeon Big have renewed push into private label, while Dairy Farm International’s Cold Storage has made available Casino private label range.
A consumer choosing Tesco private label snacks. Photo taken at Tesco Ampang.
Collectibles is also another weapon in the arsenal. Examples include Tesco’s Heroes and Friends and Aeon Big’s Doraemon figurines.
The emerging minimart scene such as KK Mart and 99 Speedmart has intenstified competition. The growth of neighborhood proximity shopping has drawn customers away from big-box retailers. For daily top ups, consumers including foreign workers are choosing minimarts only going to the big-box shops during the weekend.
The rise of premium homegrown supermarkets such as Jaya Supermarket and Village Grocer have also attracted well-to-do consumers and expats. The cheap and cheerful NSK and Econsave, meanwhile, have cannabalised Tesco and Giant’s price sensitive customers. NSK in particular has been very successful in attracting price-sensitive consumers with a wide array of cheap vegetables and fresh food.
Malaysia’s food retailing sector is becoming increasingly difficult and key players will receive another blow as the GST starts to be implemented on 1 April 2015.
The key future trends for Malaysia’s food retailing sector are:
1.) Proximity shopping with big-box retailers started to move into this space
2.) More private label
3.) Online grocery to attract consumers not willing to make the commute to the outlet
4.) Stores adapting to local need eg. price leader in produce and fresh food
5.) Going upscale with more premium supermarkets
6.) Making grocery shopping an experience where it serves as a one-stop destination for eating, shopping and experience
7.) More collectibles on their way to drive footfall
8.) Supermarket targeting certain ethnic group
This is the type of product that I have been hoping to appear in the market. The new 330ml Cowa coconut water comes in Tetra Prisma Aseptic with a plastic closure to lock in the freshness. The 100% natural juice drink is made by Linaco Manufacturing (M) Sdn Bhd, which is also the manufacturer of coconut cream powder, easy to cook premixed recipes and flavours and seasonings.
The picture below is the same Tetra Prisma Aseptic used for another coconut drink product by a different manufacturer. It just gives you an ideal of the pack.
Cowa coconut drink fills the gap in the on-the-go coconut juice segment in Malaysia. The existing coconut drink in the market are 1L carton pack (Tropicana), cans (Yeo’s) and PET plastic (Icetea Co Sdn Bhd). There is still no mainstream coconut juice in portable carton. Linaco has hit the right note by coming up with a 330ml coconut juice in a grab-and-go portable packaging.
To attract consumer attention, the packaging design needs to be improved. At the moment, it simply lacks the punch. In terms of price, it is sold at Village Grocer (Mont Kiara outlet) for RM 2.99. The taste is not too ideal and can be improvised further.
The Facebook page is at https://www.facebook.com/cowah2o
SCS cheese, the house brand cheese of Auric Pacific Group Limited, now comes in a new clean looking packaging in Malaysia with more white spaces. The new look makes the word Original and the iconic SCS logo more prominent.
Old packaging
The new packaging scheme was adopted for sliced cheese likely as a move to standardise the colour scheme across the whole dairy porfolio.
There is a big market selling collectibles to retailers for use in their in-store marketing activities. The limited-edition Bolario bear introduced by 7-Eleven Malaysia as part of the FIFA World Cup promotion could also be found in Indonesia. The bears were known rather unexciting as Football Bear in Indonesia and it was Carrefour that made them available there.
Similarly, the Marvel and Disney-Pixar super heroes collectibles exclusively available to Tesco Malaysia were also used by the Indonesian Alfamart minimarket chain as part of their in-store campaign.
Owners of animated characters or toy companies are in for a good time as retailers need collectibles to stimulate sagging sales.
A news that caught my eye today was about All Market Inc, the maker of Vita Coco, selling a 25% stake to Thailand’s Reignwood Group, the parent company of Red Bull China. The deal will give Vita Coco access to the China market through Red Bull’s distribution channel. Red Bull is the number one energy drink in China.
You might be wondering why would Reignwood want to buy a stake in All Market and introducing Vita Coco to China? Would Chinese consumers drink coconut juice?
Well, there is already a sizable coconut juice market in China. The top player in the market is Yeshu Group or Coconut Palm Group based in the subtropical Hainan island. Its Yeshu coconut juice range or plant protein drink enjoys strong distribution, which means its products can be found all over the country. The other company is known as Hainan Yedao (Group).
China’s Yeshu Group coconut juice range
The white colour products are sold by Yedao Group. As you can see, most of the coconut juice in China is in a slim can, followed by carton. PET bottle is the least common packaging format for coconut juice.
The Yedao and Yeshu coconut drinks have been in the market for a very long time and consumers have gotten used to their milky taste. The Vita Coco drink can be an alternative to consumers looking for a more watery coconut taste, a drink that can be consumed rather like a sports drink to replenish the energy levels. This everyday ion replenish positioning can make Vita Coca rather similar to Danone’s Mizone, which is the number one isotonic brand in China.
The Yeshu and Yedao packaging also seems rather old fashion and dull. What about their advertisements. Well, Yeshu’s advertisement highlights its natural credential. It claims not to use artificial essence, preservatives and colouring. As a protein drink, it helps to create a soft white skin and makes you voluptuous. Obviously, such advertisements targets women who want to have a better body shape. As the goodness of protein is the key message, this drink has to have the thick protein taste. Coconut drink is classified not as a juice drink in China but as a protein drink, competing with other protein-based drinks such as walnut and peanut beverages.
In contrast with Yeshu, Vita Coco advertisement focuses on the natural hydrating message. Vita Coco does not claim to help to augment the breast size. Rather it is positioned as a hydrating drink with 100% coconut juice. This is something Vita Coco can really excel in China with its ‘natural’ halo. Vita Coco coconut juice can be positioned as a ‘natural’ choice for consumers who does not want carbonated soft drinks, the really sweet ready-to-drink tea and juices and artificially flavoured isotonic drinks. As Vita Coco will slowing make its way into the country, let’s see which product positioning the brand will take in China.
Cocolisap is threatening to decimate the Philippines coconut industry. It appeared the epidemic is three years in the making. Farmers are experiencing mounting losses due to the infestation. The estimated losses so far is at least PHP 200 million. Government statistics has also revealed the annual coconut production in the country fell 3.3% in 2013 to 15.34 million metro tonnes, down from 15.86 million metric tonnes in 2012, according to the Bureau of Agricultural Statistics (BAS).
It seems the government has embarked on a PHP 750 million program to control the infestation. A state of emergency has already been declared in Cavite, Laguna, Batangas, Rizal, and Quezon as well as in Basilan. Not only are coconut trees being infected with cocolisap, lanzone fruits and mangosteens have also been infested in Batangas, Cavite, Laguna and Quezon.
The much loved coconut juice in the West such as the celebrity-endorsed Vita Coco is at risk of supply shortage. The US-based company has been sourcing coconut water from the Philippines since 2010. The country accounts for 59% of the world’s coconut exports. Looks like Vita Coco will need to have a contingency plan in case the Philippine government’s plan to stop cocolisap infestation goes wary.
Typhoon is also hurting the Philippines coconut industry with reports of the recent Typhoon Rammasun damaging 13% of the country’s coconut trees. The typhoon felled 1.45mn coconut trees and damaged over 43mn coconut trees, said the Philippine Coconut Authority (PCA). In comparison, cocolisap has damaged over 2mn coconut trees, according to the PCA. Expects your coconut water to get more expensive.
The Coca-Cola Company had a interesting second quarter 2014 with a 9% growth in unit cases in China with sparkling outperformed with a 10% increase. According to the company, Coca-Cola, Sprite and Fanta were the key drivers.
The “lyric bottle” campaign launched in June 2014 has been a success. The campaign puts lyrics from popular songs on Coca-Cola packaging. By scanning the QR code, users can listen & watch the lyrics on their mobile devices and share the short clip in the social media.
With so many non-carbonate options, it has become difficult to get people to drink carbonated soft drinks. Marketers have to increasingly think out of box. One of Coca-Cola’s initiatives was to introduce the mini pack to target on-the-go consumption. The nickname campaign in 2013 was another interesting marketing initiative. It made used of the packaging to give each bottle popular Internet buzzwords such as “fans”, “artistic youth” and “cool dude” to attract the youth market. Now, the lyric bottle campaign is something on the same line as the nickname campaign to create something that is related to popular culture.
Unique packaging design is important. FMCG Affinnova‘s latest report argues package design is key to winning in the beverage aisle. A unique example is Schweppes +C （怡泉+C柠檬味汽水）, a lemon-flavored sparkling beverage, launched in March 2014. It comes with an interesting design. Sales exceeded 10mn unit cases within the first three months it was launched. The pack design looks simple and easy to understand. It shows an outline of a lemon and vitamin C represented through “+C” and the use of the eye-catching lemon yellow colour.
Schweppes +C
Coca-Cola’s new Shui Dong Le (水动乐) isotonic drink, launched in early 2014, also enjoyed strong sales during the second quarter of 2014. However, the packaging design of Shui Dong Le does not seem to exude a sense of energy whereas Danone’s Mizone is seen as more energetic due to the use of a better font.
Coca-Cola’s latest Shui Dong Le
Market Leader – Danone’s Midong or Mizone
In terms of standing out on store shelf, Schweppes +C is more prominent compared to Shui Dong Le.
Photo taken from Chinabyte.com
Both packaging design and marketing are equally important in an increasingly crowded beverage aisle. Great taste is important but the product first needs to attract attention of the consumers first. Dull packaging is a guaranteed recipe for failure.
Tortilla dips sold at My Hero Supermarket in Bukit Jalil
Tortilla dips are sold in one of the most unlikely places in KL at My Hero Supermarket in Bukit Jalil. Strangely, the dips are to be eaten with Chacho’s. Where are Mission Foods and other tortilla chips?
Notice the price? The one on the left Frito-Lay Chucky Salsa Tostitos (15.5 ounces) sells at a price of RM 15.95, while the one of the right Fritos Mild Cheddar (9 ounces) is retailed at a price of RM 14.50. Interestingly, Trendcell Sdn Bhd is the importer of the Frito-Lay dips. Trendcell is the company that runs Jaya Grocer, a chain of high-end supermarket in Malaysia.
Mission Foods has recently introduced six recipes to go with its tortilla chips to enjoy during the World Cup. We all know Germany won the final match against Argentina. Now consumers longer need to buy the expensive dips from supermarkets. They can make their own dips in the comfort of home in “minutes”, thanks to the creation of chef Isadora Chai who produced six local dips to go with Mission Foods tortilla chips.
According to Chef Isadora, “Mission Chips is not your average chips as they are thick and crunchy making them great for dips, or even on their own”. The recipe comes timely for Mission Foods to cultivate a following for its tortilla chips through the dipping ritual. However, I don’t know if I can make the dips in minutes. The recipes look awfully complex for a male tortilla chip eater who just want something that can be prepared in seconds.
The six recipes are: – Curried Cream Cheese Dip
– Sarawakian Umai Dip
– Chicken Satay Dip
– Spiced Green Pea Dip
– Crunchy Spiced Mint Chutney Dip
– Sweet Spicy Tomato Coriander Dip
