Yili joins goat milk powder baby formula market 12-15-2019

The Chinese company Yili, a key player in the dairy industry, has officially stepped into the goat milk market. Although the official website of the country’s regulatory department has not yet made a public announcement, several media companies have received confirmation from Yili that on November 29, the company received an official registration number for its goat milk powder formula.

According to sources familiar with the matter, around one month ago, Yili was already preparing to purchase goat whey powder from overseas. Yili has succeeded in registering its goat milk powder formula, and plans to move this product to the market quickly.

New policies benefit milk powder companies in China

Under a new registration policy, large Chinese companies in the milk powder industry are currently enjoying bonuses for registering formulas. According to data from AC Nielsen, since 2017, baby products and baby foods have seen a rise in the Chinese market due to the stable development of the Chinese economy, increased trust from consumers, the implementation of China’s second child policy, an increase of the birth rate in China. These factors have caused an increase in all channels of domestic production and consumption of milk powder, an in particular, Chinese milk powder products are beginning to make up an increased share of the market compared to foreign products. The data shows that between October 2016 and September 2017, the number of Chinese brands of baby milk powder increased by 9%, while the number of foreign milk powder brands increased by only 5%. In other words, the gap between Chinese and foreign companies in the milk powder market is shrinking.


After thousands of registered formulas, milk powder registration standards become stricter

According to familiar sources, in 2017, during which what is called “the most extreme milk powder policy” was passed, the potential reward of registering multiple milk powder formulas outweighed the potential challenges. Data shows that on January 11, 2017, the Food and Drug Administration of China (FDA for short) announced the registration of 36 milk powder formulas, and during the entire year, over one thousand milk powder formulas were registered. As a result of this new piece of legislation, Chinese milk powder products came to make up over 80% of the Chinese market. Although the door for milk powder formula registration remained open in 2018, the formula registration standards were stricter than in 2017, making it more difficult for a large number of companies to register their products. Yili was one of the companies to take advantage of this golden opportunity in 2017. Yili has registered 10 brands of milk powder under its name with 30 formulas.

After the implementation of the second child policy in China, the Chinese birth rate has been steadily increasing, which has led to an increasing demand for milk powder products. With these current social conditions, as well as the increased FDA standards for milk powder formula registration, companies that already hold a registered milk powder formula have a great opportunity to find success in the market.

For more information on China’s dairy market, please check our Dairy Products China News.

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