Junlebao enters the Chinese cheese market 04-11-2021

In March, Sikeqi, a food company in Shanghai in which Junlebao Dairy Group has heavily invested, launched two new types of cheese sticks for children. The packaging of the two products is printed with “Junlebao Dairy Group”, which means that Junlebao has officially entered the cheese market. 

Like Junlebao, many dairy enterprises, such as Inner Mongolia Yili, Inner Mongolia Meng Niu, Bright Dairy, Milklaud, Pada Dairy, Milkana, Fonterra, and FrieslandCampina have entered the cheese market in China. Some dairy experts believe that with the old brands launching various cheese products and the new brands entering the cheese market by collaborating with famous dairy enterprises, the competition in the cheese market will become fiercer. 

Junlebao is a one of the key dairy enterprises in China. The company was founded in 1995 and now has become the largest dairy processing enterprise in the Hebei province. Junlebao mainly engages in the production of baby formula milk powder, low temperature yoghurt, room temperature liquid milk, and livestock farming.

Sikeqi launches new cheese products amid a rapidly growing cheese market

Sikeqi is a comprehensive enterprise, which consists of product development and brand marketing. The company’s main business includes retail cheese products such as cheese sticks and cheese slices. The company also provides restaurants and individual consumers with products such as butter, cream, light cream, mozzarella.

According to recent data, Junlebao invested RMB 2.25 million in Sikeqi. Junlebao holds 30% of shares of Sikeqi, and Junlebao has become the second large shareholder for Sikeqi.

According to Junlebao, the main reason for launching new cheese products is because the company has good prospects in the Chinese cheese market. According to data from a recent research report on market demand prospect and competitive strategy of cheese industry in China, the market value of retail cheese in 2019 was RMB 6.55 billion, which is a 22% increase since 2010. It is expected that the total market value will reach RMB 11.2 billion, and the growth between 2020 and 2024 will reach 12%.

However, China still mainly relies on imported cheese products. Data from China's customs shows that from January to October in 2021, China imported a total number of 106 thousand tons of cheese from other countries, which is an increase of 12.7% compared to the same period in 2019.

China's demand for cheese soars

An analyst in the dairy industry said that the increasing number of imported cheeses shows that China still relies on cheese from other countries, but it also shows that Chinese cheese market is huge, and the demand of cheese is increasing. Compared to the liquid milk market where the increasing trend is steady, the cheese market shows a rapid growth trend. And cheese will also probably become the largest category in the consumption structure of future dairy products.

In fact, one of the Chinese key cheese companies, Milklaud, released an earnings report from 2020, showing that the revenue of the company was RMB 2.75-2.85 billion, which was an increase of 57.68%-63.42% YoY. The net profit was RMB 55-75 million, which was an increase of 186.01%-290.02% YoY. Specially, the revenue of the cheese stick products of Milklaud in the first three quarters of 2020 was RMB 866 million, accounting for 46.2% of the total revenue, which was an increase of 190.85%.

For more information, please check our resources on China’s dairy products.

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