Tag Archives: COFCO

Beans in China: too many to count, but never enough

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Beans are considered a strategic food group in China

My post on biscuits starts by introducing the Chinese word binggan as umbrella term for a range of biscuit-like products. The word doulei, literally: ‘types of beans’, is a similar term. The major subcategory is the soybean, but it also includes all other types of beans, as well as peas. This is partly dictated by the structure of the Chinese vocabulary. Chinese knows many families of words that are di- or trisyllabic, in which the final syllable refers to a general category. In this case dou means ‘bean’, but because pea is wandou in Chinese, peas are regarded as a subtype of dou (beans). Wan by itself also means pea in Ancient Chinese, which was a highly monosyllabic language.

Beans as staple

Beans themselves are regarded as a subtype of the umbrella term zhushi, ‘staple food’, together with the various cereals and tubers. As a consequence, beans are perceived as a strategic product. A bad harvest does not only harm the farmers, but also the food safety of the nation. You do not want the supply of staple foods in your country to rely too much on imports, as that would make you vulnerable for boycotts. Still, the Chinese demand for soybeans still relies for 80% on imports.

The following table (unit: 10,000 mt), listing the national and regional production of beans in 2012 and 2017, shows that the national output has not grown that much over the years.

Region
2012
2017
National
1,730.534
1,841.561
Beijing
0.9695
0.58
Tianjin
1.49
0.8485
Hebei
32.45
20.8295
Shanxi
27.6
28.3065
Inner Mongolia
162.9
186.1941
Liaoning
34.2
21.0464
Jilin
52.5718
67.0779
Heilongjiang
479.6
719.6173
Shanghai
1.52
0.3004
Jiangsu
81.15
58.7924
Zhejiang
36.64
27.3824
Anhui
120.5
97.1389
Fujian
20.758
9.9457
Jiangxi
29.83
28.2933
Shandong
39.85
33.6169
Henan
84.56
53.3572
Hubei
32.21
38.4764
Hunan
38.44
31.98
Guangdong
20.14
11.1431
Guangxi
23.6
24.6758
Hainan
2.3543
1.7287
Chongqing
45.04
40.224
Sichuan
93.6
119.2296
Guizhou
23.6
25.5616
Yunnan
129.65
118.3145
Tibet
2.28
3.98
Shaanxi
43.12
28.6251
Gansu
33.09
25.1621
Qinghai
7.1
2.8014
Ningxia
4.7
1.73
Xinjiang
25.02
14.6015

In fact, it has gone up and down, with a slight long-term growth. The regional situation, on the other hand, shows big changes in both directions. Insiders expect considerable growth in the coming years and estimate that the output of 2019 will be 21.94 billion mt.

Key industrial figures

The growing area for bean products in China was 10.051 hectares in 2017. Chinese national statistics regarding the food industry are usually focused on so called ‘enterprises of a certain scope’. In practice, it refers to the entire industry, minus small household or workshop-like enterprises. The total turnover of the industry has increased from RMB 59.5 billion in 2013 to RMB 99 billion in 2017. The number bean processing companies of a certain scope in China was 4890 in 2017. The total profit of the industry increased from RMB 3.6 billion in 2013 to RMB 5.5 billion in 2017. Insiders estimate that it will further rise to RMB 6.5 in 2019.

Trade war troubles

China’s 2018 soybean imports were 7.9% lower than in 2017 according to statistics from Chinese customs released in January 2019 – the first drop since 2011. Fuelled by strong domestic demand for food oil and animal feed, China’s soybean imports have grown rapidly from 30 mln mt in 2007 to 95 mln in 2017. But the ongoing trade war with the US, which is the largest source of imported soybean, disrupted that trend. China has turned toward other suppliers such as Brazil, while also exploring technological solutions (such as soybean substitutes in animal feed) to reduce reliance on imports. US companies remained interested in the Chinese market. Cargill Inc acquired a soy processing facility in Rizhao, Shandong, in September 2020 for RMB 421 mln. The plant was previously owned by Shandong Xinliang Oils & Fats Co. Ltd. However, although Cargill is among the largest foreign soy processors in China, its crushing capacity in the country is dwarfed by Chinese-owned processors such as COFCO and Jiusan.

Products

You can make many products from beans. I will concentrate on the more typically Chinese types in this post. The Chinese perception discerns two main types of bean products: fermented and non-fermented. Ferment bean products included furu, cubes of bean curd fermented with a red mould (see my earlier post on furu in this blog) and douban, spicy fermentend bean curd, also introduced in an earlier post. Another well-known type if douchi, a black fermented paste that is best known from its frequent use in Cantonese cuisine, e.g. douchi chicken. Soybeans are also a major ingredient in soy sauce. Better known nonfermented products include: bean milk, bean strips, bean curd, dried bean curd, etc. A product that deserves to be mentioned specially is soybean milk (dounai). While the regular soy milk (doujiang) is a by-product of bean processing, soybean milk is a beverage with a higher protein content, developed as an alternative for milk. Many Chinese still have a problem with the creamy taste of milk and prefer to drink soybean milk as an alternative. With the recently increased interest in protein beverages (see my special post on that product group), soybean milk has become a product of focal interest. Another trend that benefits the bean processing industry is the growing interest in vegetarian food. Bean protein is the first alternative for animal protein, so many Chinese food technologists are busy formulating bean-based artificial meat products. These two pictures show a traditional product: doupi or dried bean curd skins, and vegetarian roast goose made from doupi.

   

Now that this post has been added to the blog, I will regular update it with the latest bean-related news and information.

Beans as ingredients

A host of food ingredients can be made from beans. Most of these have in common that they add (vegetable) protein to foods. Bean-based ingredients are even added to meat products. An example can be found in my post on the typology of meat in China, where bean powder is added to a variety of meat floss.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

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Mengniu – game changer of the Chinese dairy industry

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China’s two dairy giants, Mengniu and Yili, are located in the self-styled Dairy Capital of China: Huhhot. What is their relation and the nature of their competition in the Chinese cultural context?

A blog needs to renew regularly. Although most of my posts introduce companies, after the post on COFCO I have never written another one featuring a single company. I will make up for that, starting with this post about one of China’s top dairy companies. This post is derived from a case study in one of my academic writings: Chinese Corporate Identity. Readers who are triggered to get a deeper understanding, please read that chapter, or better: the entire book.

Inner Mongolia – a bit Chinese and a bit Mongolian

Inner Mongolia is an administrative region of northern China of the same level as a province, but with a larger degree of political autonomy.

The greater part of Inner Mongolia is a plateau with elevations of about 1000 metres. The Yellow River flows north from Ningxia and forms a loop that encloses the Ordos Desert. Grasslands predominate on the plateau, where they sustain large numbers of grazing animals such as cows, sheep, goats, camels, and horses. Milk from all those animals has been part of the traditional diet of the Mongols. Apart from drinking the fresh product, milk is processed into a number of cheese and yoghurt-like products. Horse milk is even fermented into an alcoholic beverage.

The population of Inner Mongolia is approximately 25 million, up from only 6.1 million in 1953. The rapid population growth since the 1950s is a result of better nutrition, increased health care services, and a substantial migration into the region of Han Chinese. More than 80% of the current population is Han. Mongols comprise the largest minority group in Inner Mongolia, and their presence is acknowledged by the government’s designation of Inner Mongolia as an autonomous region.

From orphan to entrepreneur

Mr Niu Gensheng (1956), Mengniu’s founder, is one of the most mythical among present day China’s entrepreneurs; more even than that of Jack Ma, the founder of Alibaba. Story has it that he lost his parents at the very early age of 3 months and was raised by a farmer called Niu (which ominously means ‘cow’). His foster parents gave him the name: Niu Gensheng.

Niu was hired by what was then called the Yili Dairy Factory in Huhhot, as a bottle washer, in 1978. From that humble position, he gradually worked his way up from work shop supervisor, subsidiary director, vice-director of the mother factory to Vice-President in charge of production of, what was then rename into, the Yili Group. Niu’s career did not pass by unnoticed. He has been granted a number of regional awards and was included in the 10 Top Young Entrepreneurs of Huhhot.

Ousted from Yili

For reasons that have never been actually expressed, a conflict developed between Niu and the other board members, resulting his removal from the board in November 1998. The Board issued a statement indicating that ‘Comrade Niu Gensheng no longer fitted his position.’ He was ‘advised’ to find a place to study outside his home region for at least two years. Judging by this ‘advice,’ it could have been that his fellow board members did no longer feel comfortable with a self-made man among their ranks. Niu grabbed this opportunity to enrol himself in the MBA course of the prestigious Guanghua Business School of Beijing University. He left Yili the following year.

Founding Mengniu

Already within the same year, 1999, Niu Gensheng and a group of more than 50 of his old subordinates at Yili and a number of private individuals, raised RMB 1.3 billion to establish Mengniu Dairy Co., Ltd. When asked during an interview how Niu could so easily convince a considerable number of his former colleagues at Yili to not only quit their comfortable positions, but also entrust a considerable amount of their savings to him, Niu’s own rationale was that he had the habit of sharing his income with his subordinates. His last salary as a Vice-President of Yili exceeded RMB 1 million, which he found more than he needed to make a good living. He often shared part of it with subordinates that he believed to have contributed to his success. In Niu’s eyes, he was cashing in on the goodwill thus accumulated during the establishment of Mengniu. This was good leadership in a communitarian culture like the Chinese.

Fastest growing private enterprise

At that point of Mengniu’s early age, the company was still in a situation Niu himself recalls as ‘four deficiencies:’ no raw milk source, no factory, no brand (he had registered a brand name, but it was unknown among Chinese consumers), no market. He contacted dairy plants all over China with a surplus capacity and contracted those to produce for Mengniu. Mengniu provided specifications, a brand name and technological assistance. Mengniu first created a market and only then built its own production facilities.

Mengniu turned out to be the fastest growing private enterprise in China’s history. The company generated a turnover of RMB 43 million in the first year of its existence, which was approximately 4% of Yili’s turnover of the same period. The turnover of 2002 was already RMB 2 billion, exactly half of Yili’s turnover of that year.

Foreign investment

A milestone in the history of Mengniu was its acceptance of foreign participation late 2002. Niu Gensheng himself had repeatedly stated in the national press that he was not in a hurry to follow Yili’s example in seeking registration on the stock exchange and expose Mengniu to the whims of speculators. It therefore was even a surprise to insiders when it was reported that Morgan Stanley, CDH Fund and China Capital Partners had signed an agreement with Mengniu to invest USD 26 million in Mengniu. As a result of that deal, the three foreign investors held a total share of 32%. According to a spokesperson of Mengniu, the Chinese side had attracted foreign participation to better compete with the other dairy giants like Sanyuan (Beijing) and Bright (Shanghai), that were heavily supported by their respective local governments. Morgan Stanley had already invested in a number of Chinese enterprises including Ping’an Insurance Company, Nanfu Battery Company and Heng’an International Group. CDH Fund had invested in 12 Chinese enterprises, also including Nanfu Battery and Sina.com, an important Chinese business Internet portal. China Capital Partners, a UK fund for investment in China, had invested USD 55 million in China since its establishment in June 2000. Following opening its door to foreign influence, Mengniu’s next step was to seek listing on the Hong Kong Stock Exchange in June 2004.

Cultural drivers of Mengniu’s success

Niu Gensheng’s strategy has never been to ‘push Yili from the market’, which would be the typical Western MBA textbook approach. Instead he kept praising Yili in his advertisements of Mengniu, position his company as a faithful follower of leader Yili.

He vouched in media interviews that Mengniu would not try to snatch raw milk sources from Yili and that Mengniu would never buy raw milk that did not comply with Yili’s specifications.

In the Chinese cultural context, Niu himself, and the Yili employees he had pulled from Yili, would still maintain friendly contacts with their former Yili colleagues. An aggressive strategy would not fit such relations. In the political field, the Huhhot authorities, while welcoming new entrepreneurial activity, would dislike a Western-style life or death fight between state-owned enterprise Yili and private newcomer Mengniu. Commercial competition must never harm the Confucianist ideal of harmonious society.

In short: Niu Gensheng’s entrepreneurial behaviour suited the Chinese communitarian culture and complied with the Confucianist principles of good governance.

Mengniu and Yili outside Inner Mongolia

During the following years and decades, Mengniu and Yili kept growing and expanding into other regions of China. In most regions, either Mengniu or Yili would be the first to enter, but the other would soon follow suit. While Mengniu kept profiling itself as the follower, in their de facto relationship they alternately acted as follower or leader (for concrete case studies see the above-mentioned book).

Mengniu turns SEO

The Chinese business world was shaken by the news that COFCO (see my post that positions COFCO as the next Nestlé) had acquired a significant share in Mengniu in 2009. The media, that had so far regarded Niu Gensheng as a favourite person to interview, now accused him of going against the tide. While privatization was the trend in Chinese economy, China’s most successful private company was now becoming a de facto state-owned enterprise. Niu was not shaken by the fierce criticism, as usual. He calmly replied that the real trend was that the differences between various types of enterprises in China (state-owned, private, foreign invested, etc.) were decreasing. He simply believed that Mengniu would be best off as a subsidiary of the emerging multinational COFCO.

History has proven him right. Mengniu ranked 9 in the Rabobank 2019 Top 20 global dairy companies. The company has generated a turnover of almost RMB 70 billion in 2018; up 14.7%. Net profit for that year came in at a record RMB 3.04 billion, up from a profit of 2.05 billion yuan in the previous year.

Food for thought

Mengniu Dairy’s entrepreneurial history provides a large bowl of food for thought. I will leave most of it for you, my readers, to think over. I will restrict to one challenging thought: considering the problems major dairy multinationals like Fonterra and FrieslandCampina are experiencing in China, how much could they learn from Mengniu, to grow roots in the Chinese cultural context? Nestlé, an early Western investor in China, seems to have done a good job in this respect. The key issue in embedding your Chinese subsidiary in the local society is forging valuable relationships, with business partners, but also with competitors.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

Belt and Road – Wheat and Yeast, and more

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By now, the new motto of the Chinese government, the Belt and Road Initiative (BRI) aka One Belt One Road (OBOR), is known all over the world. Not only the national government, but also local governments in China, enterprises, and universities are rephrasing their goals and strategies in terms of OBOR. The Chinese food industry cannot escape this trend either, witness a conference held in October, 2018.

I have already posted a number of stories featuring wheat flour in this blog, including texts focusing on flour improvers, bread, and steamed bread (mantou). This is certainly not overkill. China has been the world’s largest importer of wheat for a number of years. The import volume in the 2015-16 season is estimated at 2 mln mt, an increase of almost a third compared to the previous season.

An important reason for that increase is the growing consumption of bread in China. Chinese domestic wheat is relatively low in gluten, which is fine for traditional Chinese products like steamed bread, dumplings or noodles. Bread, however, requires wheat with a higher gluten content. China used to import such wheat from Australia, the USA and Canada, but an emerging source of high gluten wheat for China is Kazakhstan. Chinese wheat imports from Kazakhstan increased from 40,000 mt in 2010 to 250,000 mt in 2014.

KazakhFlour

The fact that China and Kazakhstan are neighbours makes them more obvious trading partners than those faraway Western nations. However, the story is more complicated, more related products are involved, in particular another essential ingredient of bread: yeast. The favourite staple of Central Asia, the nan, is also a baked product using yeast.

Yeast feeds on molasses and Xinjiang, the Chinese border region with Kazakhstan, is an important sugar region in China with 14 sugar plants producing 250,000 mt of molasses p.a. Along the region’s Uighur majority, Xinjiang is also the home of a considerable Kazakh minority. Moreover, Kazakhs and Uighurs share the same Muslim religion, so there is a mutual understanding regarding Halal food regulations. This motivated China’s top yeast producer Angel (Yichang, Hubei) to establish a subsidiary in Yining, a city in Xinjiang close the border with Kazakhstan. A considerable part of the produce of that plant is exported to Kazakhstan. According to one source, ‘Chinese yeast is a famous in Kazakhstan as Coca Cola or Marlborough’.

Angel

Meanwhile, China has started investing in the continuous supply of high gluten wheat from Kazakhstan through an intensive aid program. The country’s wheat output in 2011 was 26.9 mln mt, but was almost halved in the following year, due to severe drought. The average wheat output per hectare in Kazakhstan is about 1/5 of that in China. The Chinese authorities have organized a number of government agencies and companies to combine their expertise in helping Kazakhs to improve their wheat production. One tractor maker in Shandong has developed tractors specially geared to the conditions in Kazakhstan. Chinese experts believe that this development aid can unlock the potential of another 20 mln mt of high gluten wheat p.a. And yes, much of that will find its way to China.

Oil from Kazakhstan – from buying to producing

The Aiju Grain and Oil Industry Group (Xi’an, Shaanxi) imports cooking oil, wheat and flour from Kazakhstan. Aiju’s Chairman noted during his visit of a trade fair in Almaty in 2015 that a considerable acreage of rich arable land is left unused in Kazakhstan. Aiju is now building two factories in the region, which will process up to 1000 mt of wheat and 1000 mt of sunflower oil a day, as well as a base to plant wheat and sunflower seeds over 33 hectares. The base will be finished by 2020 and create 300 jobs. Aiju intends to bring high-efficiency planting and processing technologies to Kazakhstan, which will help with local economic development. The company also plans to start importing beef, mutton, honey and milk from Central Asia too. This includes other countries besides Kazakhstan. Bai Qinbin, deputy director of port management for the Xi’an International Trade and Logistics Park, said the city’s large transportation network can help boost trade and investment between China and countries involved in the Belt and Road Initiative. “We are working on starting a service between Xi’an to Teheran this year, as the Middle East is in great need of Chinese goods, especially food and commodities for daily use.” Xi’an is one of the most important multimodal infrastructure hubs in China.

Tomatoes and more

The role of Xinjiang in the development of Kazakhstan’s food industry does not stop at wheat and yeast. Xinjiang is already the world’s largest supplier of tomato paste. One of these companies has invested in a tomato processing plant in Almaty. Chinese companies have so far offered to invest USD 1.9 bn to upgrade Kazakh food processing industry with 19 projects such as tomato, chicken and meat processing plants. According to Gulmira Isayeva, Kazakhstan’s deputy agriculture minister, Beijing’s USD 40 bn Silk Road Fund is planning investments in three projects, including one to move three tomato processing plants from China to Kazakhstan. Investments under consideration in Kazakhstan’s agriculture sector include USD 1.2 bn by Zhongfu Investment Group into oilseed processing; USD 200 mln into beef, lamb and horsemeat production by Rifa Investment; and USD 80 mln into the production of tomatoes and tomato paste by COFCO, China’s state agriculture conglomerate.

OBOR as milky way

Yili (Huhhot, Inner Mongolia; aka China’s Dairy Capital) has broken into the ranks of the world’s top 10 dairy makers in 2016, ranking 8th. The company is advertising its global strategy in terms of OBOR.

YiliOBOR

So OBOR really can create win-win situations.

Jiangnan University joins in

A founding ceremony of the  was held by Jiangnan University in Wuxi, East China’s Jiangsu province on Nov 16, 2018. Hong Liu, deputy director of the Jiangsu Provincial Department of Education, Liu Xia, deputy mayor of Wuxi, as well as presidents, experts and scholars from 49 universities in 27 countries involved in the Belt and Road Initiative (BRI) attended the ceremony (including the University of California, Davis (UC Davis), the University of Queensland, the University of Reading, Massey University and the National University of Singapore). During the ceremony, general secretary of the alliance, Liu Yuanfa announced the Taihu Lake Declaration, aiming to pool together the wisdom and strengths of the member universities to strengthen strategic communication and coordination in the food industry.

Shared Chinese and Kazakh interests in the agri-food industry

In May 2016, Gulmira Isayeva, Kazakhstan’s deputy agriculture minister, announced that Chinese companies were in talks to invest USD 1.9 billion in 19 agricultural projects as part of the BRI. According to a list of prospective investments that Isayeva showed to the Financial Times and statements from the project planners, agricultural investments under consideration include: USD 1.2 billion by Zhongfu Investment Group in oilseed processing; USD 200 million in beef, lamb, and horsemeat production by Rifa Investment; USD 80 million in the production of tomatoes and tomato paste by Chinese agriculture conglomerate COFCO and Evraziya Agroholding; and USD 58 million in a grain processing venture between China’s Aiji and Kazakhstan’s Total Imepx in northern Kazakhstan. Other projects include the establishment of feed lots and broiler poultry farms by CITIC and Kazakhstan’s Baiterek and an approximately USD 500 million investment by a finance group from Hong-Kong Oriental Patron in the development of “Kazexportastyk” for deep processing of agricultural products in Kazakhstan for export to the Chinese market.

In the future, Kazakhstan might also become a platform for certification and export of Central Asian agricultural products to China. According to Isayeva, laboratories are currently being established in the East Kazakhstan and Almaty oblasts. These labs will have technical equipment that meets the requirements of the General Administration of Quality Supervision, Inspection and Quarantine of China, a Chinese government body that will have the final say over whether or not to accredit enterprises. Using these laboratories, farmers from across Central Asia will be able to certify their products to be exported to China. China will trust the laboratory test results and will not re-examine the goods. Between December 14, 2015 and June 8, 2017, the Ministry of Agriculture of Kazakhstan and the General Administration of Quality Supervision, Inspection and Quarantine of China signed 6 protocols on phytosanitary requirements for export of wheat, horses, soy beans, wheat bran, honey, and the frozen meat of small cattle from Kazakhstan to China.

On July 11, 2017, Kazakhstan and China signed seven agreements worth a total of USD 160 mln at the Kazakh-Chinese Agriculture Investment Forum in Astana. Kazakhstan’s National Company Food Contract Corporation signed agreements with Xi’an Aijugrain & Oil Industry Group Co Ltd, Xinjiang Zhaofenghe Bio-technology Co., LTD, and Zhongxinjian LLC to supply 200,000 mt of grain and 100,000 mt of oil-producing crops to China, as well as construct a grain and oil-producing crops terminal at the Kazakh-Chinese border. Furthermore, Zhannur-Astana and Tianyang Yinhai Seed Co. agreed on the establishment of a seed cluster with a full grain processing cycle, including the transfer of advanced practices in seed production. The two countries also signed a memorandum of understanding aimed at the establishment of a model zone of agricultural cooperation on the basis of the National Agricultural Research and Education Centre, which will contribute to the establishment of joint processing plants and the introduction of new innovations in agricultural production.

Finally, Kazakh Agro-Technical University signed an agreement with China’s Northwest University of Agriculture and Forestry to create a joint agricultural technology park and with Chinese potato company XISEN on a joint experimental demonstration lab for growing potatoes.

BRI and Halal

Among the 65 BRI countries, 31 are Muslim countries, and Muslims account for more than half of the total population of BRI nations. Halal food is therefore an important factor in the relationship between BRI and the Chinese food industry. China has advanced technology and huge capacity to produce Halal food on a large scale, but this potential is far from being developed. In 2019, the world’s Halal food sales reached USD 3.2 trillion, while China’s export value was only USD 100 million. There are great opportunities for future development.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation.

Is China the future for chocolate?

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Chocolate is one the most appreciated gifts to friends in East Asia

The confectionery industry is a sweet line of business by itself, but it can be even sweeter in China, where market potential and a growing confectionery culture is leading to a new bonanza of sweets and chocolates. Even the Chinese army is producing specially packed chocolate for its soldiers.

 Chocolate sales in China grew 58% from 2009-2013. They are expected to expand to USD 4.3 billion by 2019, rising nearly 60% from USD 2.7 billion in 2014, lifted by outstanding demand from the growing urban population, Bert Alfonso, president of Hershey International, forecast in a recent webcast at the Consumer Analyst Group of New York conference.

China has become such an important market for chocolate suppliers, that Barry Callebaut had chosen Shanghai as the place to introduce its inhouse-developed ruby chocolate to the world in September 2017. Barry has further opened a new Chocolate Academy in Beijing in 2019 – the company’s 22nd globally – to meet demand and better serve the Chinese market. Barry announced to open a fourth office and the third Chocolate Academy Centre in Shenzhen, China in November 2020.

High-end market

Sales of China’s chocolate and confectionery boomed over the past five years after a handful of Western brands began entering the country in the 1980s. The maturing chocolate culture has prompted Chinese consumers to begin asking for a greater variety of premier products. China’s chocolate consumption is increasing 10% to 15% a year, as living standards rise and there is a growing acceptance of Western lifestyle.

So far, the top 20 chocolate makers have already presented themselves in the market. In a common supermarket in Shanghai, you can easily find over 70 brands of chocolate. Most of them are foreign brands. The big four (biggest four companies in China chocolate market: Dove, Ferrero, Cadbury and Leconte) have taken over 70% of the market. Of these, only Leconte is a local brand (Owned by COFCO, possibly Nestlé’s main international challenger). Among the three foreign brands, Dove alone has taken one-third of the market. Dove has charmed Chinese consumers by its special taste. Secondly, Dove chocolate has nice packaging with a neat wrap which leaves a deep impression of delicious and good quality in the consumers’ mind. In addition, Dove always produces new products with special packaging which propose meaningful designs. Chinese consumers care about the packaging of a product, because chocolate is also a good choice to buy as a present. How the chocolate appearance has been the most vital factor for the purchasing decision as a gift.

Foreign players go into lengths to ensure the quality of their products on the Chinese market. E.g., Hershey’s indicates on its packaging that it uses 100% imported milk.

HersheyImpMilk

Don’t think that this market is only accessible to the big multinationals. Belgian chocolatier Filip Esprit runs a chocolate shop in Weihai, Shandong province. This is good location, close to China’s unofficial Food Capital Yantai.

Major potential

China’s current per capita chocolate consumption is very low at about 100 grams a person, compared with more than 10 kilograms in Europe. Even in Japan and South Korea, the figure is close to 2 kg. However, by 2016, 340 million Chinese will be middle class – more than the population of Western Europe – creating a huge market. Greater purchasing power – and the growth of large foreign retail chains – will boost consumption. This leaves plenty of room for business growth in China.

Insiders estimate the total value of chocolate sales in Chinese retail in 2019 at RMB 22.4 billion; up 4.4%. The further expect an annual growth of 3.5% for the coming 5 years.

Milk chocolate is still the favourite flavour with Chinese consumers. However, in some developed regions of China, such as in the east, sophisticated customers are more likely to choose dark chocolate as it has an image of being healthier. This flavor’s share of retail value has more than quadrupled in five years to 34% in 2013. Of all the chocolate fillings, nuts are the most popular.

Selling Points of Chocolate

What are the factors to getting Chinese people buying chocolate ? A report shows that the No.1 factor Chinese consumers consider is the taste (30%), following by brand (18%) and price (7%).

  1. Taste

It’s true that in China, taste is the most important factor, but compared to western consumers, Chinese consumers don’t care about the taste nearly as much. A report shows 66% western consumers put taste as the most important factor, while only 30% of Chinese consumers think it’s the top factor.

  1. Brand

When chocolate came to China’s market, it was branded as an exotic food product which is an added extra value. And now the brand has become even more important. First of all, a big part of imported chocolates purchased in China are for gifts or ceremonial use like wedding candy.

For young Chinese men, chocolates, especially luxurious delicately packed chocolates have become a must to show their love to their girlfriends. During the Chinese Valentines’ Day this year, half of the top 10 items sold online were chocolates. That’s why imported chocolates are sold as high class food product.

Apart from their fancy look, imported chocolates also enjoys a fame of high class ingredients. With the growing concern for health and food safety, consumers are becoming more careful about the ingredients of chocolates and imported chocolate are trusted for containing more coco or milk.

  1. Price

When chocolate first appeared in China, the price for a box of imported chocolates was sky-high. Today, chocolate has become a common food product that most people can afford. But some chocolate brands are still famous for their high price such as Ferrero because Ferrero targets on high class chocolate market where price is an important tool to show its value.

A Chinese consumer can easily find reasons to buy a box of imported chocolate for its taste, brand and price. And what chocolate makers need to do is to produce nice chocolate, promote its brand and label with a suitable price.

Local players

Local competitors are still finding it hard to set up a premier brand recognition among Chinese consumers and adopted cheaper compounds to secure price competitiveness. The 415 producers active in 2018 produced a total of 2.9 mln mt of chocolate products. Almost 75% of that volume was produced in Fujian, Guangdong, Hunan, Hubei and Anhui.

LeConte holds 6.7% market share and another local company, Golden Monkey (Shanghai), with 1.5% market, was acquired by Hershey in 2015 (after acquiring an 80% stake in the previous year). However, Hershey sold the Chinese subsidiary again in July 2018 to a local party Yuxiang Food Technology (Henan), a company co-founded by Xizang Cangying (literally: Tibet Goshawk) Investment Management Company and Henan-based Youshi Foods, which has become one of the biggest bakeries in central China.

LeConteMCGM-mchoc

Ingredients listed on the packaging of domestic chocolates:

  • LeConte milk chocolate: sugar, cocoa butter, whole milk powder, cocoa mass, skimmed milk powder, lactose, food additives (soybean lecithin, food flavour), cocoa butter 35% min., cocoa solids 40% min., milk solids 26% min. The cocoa beans are imported from Ecuador.
  • Golden Monkey milk chocolate (cocoa butter alternatives):sugar, hydrogenated vegetable oil, cocoa powder, milk powder, whey powder, salt, food additives (lecithin, polyglycerol ricinoleic acid ester), food flavour.

On the other hand, the higher prices of global players also scare away Chinese customers, who do not have the purchasing power of their Western counterparts. There is still room for growth in second-tier cities dominated by these lower-end products. This applies particularly to China’s vast rural population. The challenge for domestic players is to develop affordable chocolate products that apply to the various local tastes and habits.

Perhaps foreign tourists can be charmed into buying chocolate replicas of the famous terra cotta soldiers from Xi’an.

chocolateWarriors

Russian chocolate making progress

Chinese imports of foods and beverages from Russia have been rising during the past few years and chocolate is one of the favourite categories. One Russian chocolate, Krokant, chocolate filled with toffee crunch, is hard on the way to become the most popular chocolate in China. Chinese refer to it as ‘Purple Candy’ due to its purple wrapper. Similar Russian products are also available.

China imported 64,000 mt of chocolate from Russia in 2020; up 30%.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation.

Food companies in China’s top 100/500

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The list of the 2014 Top 500 Chinese enterprises in terms of turnover included the following food and beverage companies.

Rank Company Turnover 2013(RMB bln) Business
84 COFCO 189.05157 Food in general, see our blog on COFCO vs Nestle
94 Bright 159.38217 Dairy
165 Wahaha 78.27856 Beverages
168 New Hope 77.89271 Dairy
195 Wuliangye 63.09445 Spirits
253 Yili 47.77887 Dairy
257 Shuanghui 47.20541 Meat
299 China Salt 39.82552 Salt
307 Luzhou Laojiao 38.53574 Spirits
321 Zhengbang 36.04589 Meat, poultry
330 Wens 35.18706 Meat, poultry
337 Moutai 34.62301 Spirits
407 Qingdao 28.29098 Beer
430 Xiwang 27.12007 Corn processing
451 Weiwei 26,18069 Soybean milk
470 Daohuaxiang 24,86100 Spirits, beverages
482 Hope-Full 24,11415 Soybean processing

The two companies in the top 100 are both state owned enterprises that have succcessfully adapted to the new economic reality in China. Still, the second two are private enterprises.

Spirits remains the best represented type of business with four companies on this list. If we broaden the scope to alcoholic beverage in general, we can add Qingdao and COFCO (Great Wall Wine) as well, to make 6 out of 17 companies.

However, as Mengniu Dairy is now a subsidiary of COFCO, the current list also de facto comprises 4 dairy companies, 2 of which are in the top 100.

You may want to compare this list, which is based on the 2013 turnover, with the list of the Top Food Companies of 2014, which ranks the enterprises according to their estimated brand value.

Food & Beverage in China’s 2017 top brands

The 2017 China Top 100 brands have been published late May. I have extracted a sublist of the food and beverage companies in that list and simply add it to this blog, so we can compare the results with the situation of 2014. First the list.

Rank Brand Industry
6 Moutai spirits
9 Wuliangye spirits
19 Yili dairy
21 Mengniu dairy
25 Wahaha beverages
64 Chef Kang noodles
67 Shuanghui meat
73 Luzhou Laojiao spirits
74 Tsingtao Beer beer
80 Bright dairy
84 Kouzijiu spirits
85 Junlebao dairy
92 Huiyuan fruit juice
93 Changyu wine
95 Gujing Gongjiu spirits
96 Yingjia spirits
97 Daoxiangcun pastry
98 Quanjude Peking duck

Spirits stand out as the leading industry with 6 out of 18 brands in the national Top 100. Dairy is the runner up with 4. Quanjude is a restaurant chain rather than a manufacturing company, but it also markets vacuum packed ducks ready for consumption. Regular readers of the blog will recognize most of the names. Don’t hesitate to use the Search function to look for more information of each company in other posts.

Almost all companies have rising dramatically, in particular Moutai. Three years ago, only 3 F&B companies were included in China’s top 100, now 18. This corroborates what has been said about the Chinese food industry in numerous recent publications: it is rapidly becoming a pillar of the national economy.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.

Will Nestlé’s challenger be Chinese?

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Nestlé is still the world’s leading food company, but for how long? It is very active in China, but China’s own giant is occupying Nestlé’s markets too, one by one, step by step.

The increasing Chinese appetite for high end foreign products is not a new issue. The economic problems in Europe and North America now seem to push China even faster in the position of top region for investment, and in both directions: inward and outward. The two giants, Beijing based COFCO (China Oils & Foodstuffs Corporation) and Bright from Shanghai, continue their race in acquiring foreign companies. Unlike many of their Western counterparts, they have the money to spend and they are the top food makers for more than 1.3 billion domestic consumers. COFCO claims to provide food products to one-fourth of the world’s population, around 1.8 billion customers. COFCO rose to the 121th position in the World Top 500 companies of 2016.

COFCO’s revenue amounted to RMB 216.12 billion ($32 billion) in the first half of 2017, up 7% year-on-year. Its net profit in the same period also reached RMB 5.51 billion, surging 112% from the same period a year earlier.

Moreover, while most Chinese overseas investors are constrained by lack of financing, COFCO has received large infusions of credit from Chinese policy banks. These include a RMB 30 bln line of credit from the Agricultural Development Bank of China for investment in grain-related projects in 2011; RMB 30 bln in financing over 5 years from the China Development Bank; and another commitment in 2016 from the Agricultural Development Bank to finance projects related to food security, food safety, and agricultural modernization.

Simultaneously, we see multinationals like the two Colas, Nestlé, Unilever, etc., increase their stake in their respective Chinese markets. These corporations as well have no choice. If they do not invest now, there will not be enough of the pie left for them. Nestlé is very frank in admitting that it finds it harder than before to keep its market share in China, let alone increasing it. And in our current troubled world, losing market share in growing market like China equals losing market share worldwide.

COFCO has become a genuine powerhouse. Following Donald Trump’s announcement about putting high import duties on imported steel and aluminium, COFCO’s President Patrick Yu alluded in an interview that he, as the world’s largest importer of soybeans, was able to harm the US by stopping to source that product from the US.

Nestlé

Nestlé was one of the earliest multinational investors in China with an infant formula plant in Heilongjiang in the 1980s. The company is now active in the country with most of its product groups, like coffee, biscuits, or breakfast cereals.

After 13 years of talks, Nestlé was formally invited into China in 1987 by the government of Heilongjiang province. Nestlé opened a plant to produce powdered milk and infant formula there in Acheng in 1990, but quickly realized that the local rail and road infrastructure was inadequate and inhibited the collection of milk and delivery of finished products. Rather than make do with the local infrastructure, Nestlé embarked on an ambitious plan to establish its own distribution network, known as milk roads, between 27 villages in the region and factory collection points, called chilling centers. Farmers brought their milk— often on bicycles or carts—to the centers where it was weighed and analyzed.

Unlike the government, Nestlé paid the farmers promptly. Suddenly the farmers had an incentive to produce milk, and many bought a second cow, increasing the cow population in the district by 3000, to 9000, in 18 months. Area managers then organized a delivery system that used dedicated vans to deliver the milk to Nestlé’s factory. Although at first glance this might seem to be a very costly solution; Nestlé calculated that the long-term benefits would be substantial. Nestlé’s strategy is similar to that undertaken by many European and American companies during the first waves of industrialisation in those countries. Companies often had to invest in infrastructure that we now take for granted to get production off the ground. Once the infrastructure was in place in China, Nestlé’s production took off. In 1990, 316 mt of powdered milk and infant formula were produced. By 1994, output exceeded 10,000 mt, and the company decided to triple capacity. Based on this experience, Nestlé decided to build another two powdered milk factories in China and was aiming to generate sales of USD 700 million by 2000. Nestlé already operates three “milk districts” in China, in Shuangcheng (Heilongjiang), Laixi (Shandong) and Hulunbeier (Inner Mongolia).

Nestlé has signed an agreement with a local government in north China’s Inner Mongolia region to build a 2,000 cow dairy farm in the area. The company says the farm will be “a transitional solution between small and individual farmers and a large modern farm”. Nestlé rarely invests in its own dairy production, preferring instead to develop supply chains with local farms or to import powdered milk on the global market. Its moves in China follow those of New Zealand’s Fonterra, the world’s largest milk producer and a major supplier of powdered milk to Nestlé.

In China, Nestlé has collaborated with public and private organizations in opening breastfeeding rooms (the number was 3,297 mid 2019). This is an important expression of its global commitment to support breastfeeding, which it also protects by implementing a leading policy to market breast milk substitutes (BMS) responsibly.

Nestlé is also keen on developing products particularly suiting the Chinese market. A find example is ‘milk powder for elderly’, enriched with medium-chain triglycerides (MCT). It is marketed with the slogan ‘gas station for the brain.’

Since 2010, Nestlé has formed a bottled water venture with Yunnan Dashan Drinks Co. and bought controlling stakes in candy maker Hsu Fu Chi International and Yinlu Foods Group, producer of congee, saqima and a peanut-milk beverage. Through the alliances, Nestlé has tripled its China headcount to 47,000 employees. With 31 factories across the country, 90% of the products it sells in China are made there.

Nestlé plans to build R&D centers at facilities owned by Hsu Fu Chi and Yinlu, where researchers will focus on ready-to- drink beverages and baked goods. The Swiss company already has a research center with Totole, a Chinese bouillon maker in Shanghai in which Nestlé has an 80% stake. Another facility in Beijing focuses on nutrition and food technology.

COFCO

Still, an intriguing thought for us to dwell upon every now and then is this: how many years are we away from the moment that Nestlé will start feeling competition from COFCO in Europe? For Nestlé, actually, this is not an issue to dwell upon, but to act on, by increasing its investment in COFCO’s home land.

COFCO, formed through a series of mergers of state food and animal husbandry companies in the 1950s, has successfully transformed itself to a top national player in the food industry. E.g., COFCO controls 90% of China’s wheat imports. Nowadays, COFCO claims to provide food products to one-fourth of the world’s population, around 1.8 billion customers.

COFCO plans to build new warehouses and processing facilities in countries including Myanmar, Kazakhstan, Ukraine and Indonesia to enhance its ability to acquire global food resources. COFCO has already purchased and built ports, logistics companies and storehouses in the world’s main grain-producing areas such as Australia, South America and the Black Sea region. Wan Zaotian, COFCO’s vice-president, said China has become the world’s largest market for food trade. Supported by the Belt and Road Initiative, food trade between China and its partners is expected to grow rapidly. It is critical for the group to build efficient global supply and logistics networks.

In 2011, COFCO took control of Australian sugar producer Tully Sugar Ltd, but it lost a bid for Proserpine Cooperative Sugar Milling Association, another Australian company, in November of that year.

In the wine sector, COFCO bought Chateau Viaud in Bordeaux, France, in February 2011 after investing USD 18 mln on a large swathe of Bisquertt, one of the Chile’s most upmarket brands in 2010.

To put the competitive relationship between the world’s top food giant and China’s domestic one, I have compiled a simplified table of the major food groups and Nestlé and COFCO’s participation in each industry.

Image

(-: not applicable; +: a broad range of products)

COFCO’s foreign-oriented activities since the publication of this blog:

14/1/2014: COFCO is said to be on speaking terms with China’s second largest meat processor Jinluo Group to acquire the latter.

28/2/2014: COFCO to buy 51% of Dutch grain trader Nidera. The Nidera purchase gives Cofco a strong platform to produce grain in Brazil, Argentina and Central Europe. All regulatory approvals to close the transaction whereby an investment consortium led by COFCO, consisting of Hopu Investment, Temasek, IFC, Standard and Chartered Private Equity, has acquired 51% of Nidera have been obtained in October 2014.

4/3/2014: COFCO has acquired Noble’s agribusiness arm. With Noble’s agribusiness COFCO has gained grain elevators in Argentina and sugar mills in Brazil, as well as oilseed crushing plants in China, Ukraine and South Africa.

29/4/2014: COFCO is setting up a huge vegetable oil plant in the port city of Tianjin.

6/6/2014: COFCO Meat attracts a capital injection from a consortium of investors composed of KKR, Baring Private Equity Asia, HOPU, and Boyu.

8/10/2014: COFCO unveiled plans for an initial public offering (IPO), in a move that would allow it to compete with leading U.S. agribusinesses, according to several news reports. The planned IPO would include assets recently acquired Nidera and Noble. COFCO said its goal with the acquisitions was to connect large grain production areas, including those in South America and the Black Sea region to Asia. These investments are meant to will allow COFCO to compete with the traditional big-four trading houses from the west that are collectively known as ABCD: Archer Daniels Midland, Bunge Ltd, Cargill Inc and Louis Dreyfus Commodities BV as rising incomes drive up food demand in China.

10/11/2014:  COFCO has signed an agreement with New Zealand Government-owned food safety firm AsureQuality and PricewaterhouseCoopers (PwC) to enhance the country’s food safety and quality.

Oct. 2015: COFCO announces plans to construct two warehouses (100,000 MT capacity each) in Russia’s Mikhailovsky priority development territory in southern Primorsky Krai.

22/12/2015: Embattled commodities trader Noble Group has reached an agreement to sell its 49% stake in Noble Agri to COFCO International for $750 million. With this move, COFCO will pose an even bigger challenge to ABCD (see 8/10/2014 above).

October 2016: COFCO signs an agreement with Australia’s Monash University. Under the deal, Monash University’s new Food Innovation Centre – and Australian food businesses – will now have access to the COFCO research arm’s resources, in-depth knowledge of Chinese consumers and regulatory expertise to fast-track supply opportunities for exporters. The university said the new centre would enable businesses to expand and target export markets, including China.

19/10/2016: Cofco Meat Holdings Ltd, a pork producer part-owned by KKR & Co, is seeking to raise as much as $333 million in a Hong Kong initial public offering.

8/11/2016: COFCO launches a power drink called Big Bang in cooperation with Refresco (Netherlands) to compete with Red Bull and similar beverages.

18/2/2017: New Zealand’s AgResearch has signed a collaboration arrangement in Beijing with the Nutrition and Health Research Institute of COFCO and with the College of Food Science and Nutritional Engineering of China Agriculture University (CAU). They would explore opportunities to work together formally in the name of a “joint international research center for food science to promote international exchange, research and productivity, with a particular focus on further enhancing a China-New Zealand relationship.”

May 2017: Loch Lomond Group, based in Alexandria in Scotland, has entered into a partnership with COFCO for the distribution in China of their whiskies, including Loch Lomond, Glen Scotia and Littlemill.According to the Scotch Whisky Association, the value of exports to China increased 0.5% to 41 million pounds in 2016.

June 2017: DGB Pty Ltd, South Africa’s largest independent wine, spirits and craft beer producer, announces an exclusive distribution agreement with COFCO. COFCO will, in the initial phase, exclusively import DGB brands Boschendal and Tall Horse, with the expectation to later expand the portfolio with other brands from the DGB wine stable.

15/8/2017: COFCO partners with the Illinois-based farm cooperative Growmark Inc. they will jointly own and operate a truck, rail and barge terminal in Cahokia, Illinois, on the Mississippi River, the main pipeline that supplies exporters along the US Gulf Coast with corn and soybeans. The facility can receive about 180,000 bushels (4572.24 mt) of corn per hour, delivered by truck and rail, and can load two river barges simultaneously at a rate of about 60,000 bushels per hour.

Feb. 2018: Cofco International Ltd., the trading arm of China’s largest food company, is building a soft commodities hub in Dubai. About 10 employees will trade sugar, coffee and cotton.

Summer 2018: Cofco launches an energy drink of its own, jointly developed with Refresco (The Netherlands), marketed under the Big Bang brand.

July 2019: COFCO International, the Geneva-based global trading arm of COFCO has signed a $2.1-billion credit a sustainability-linked loan for a commodity trader.

July 2020: COFCO International releases plans to achieve full traceability of its direct soy suppliers in Brazil by 2023.

Nestlés activities in China since the publication of this blog:

8/5/2014: Nestlé announces intent to invest in coffee growing in Pu’er (Yunnan).

9/5/2014: fertiliser producer China Green Agriculture has entered a cooperation agreement with Nestlé (China) Co., Ltd. to jointly develop a direct sales program, as a mutual effort to supply the Company’s fertilizer products to coffee bean farmers in China.

16/6/2014: The University of Wisconsin-Madison, US, will develop the curriculum for a $400m Nestlé dairy training center in China.

17/6/2014: Nestlé has officially inaugurated its latest Chinese research and development facility in Dongguan (Guangdong). The R&D facility will support its partnership with Hsu Fu Chi and focus on research in confectionery and ice cream.

15/10/2014: Nestle opens China Dairy Farming Institute; Nestlé has inaugurated a “dairy farming institute” in Shuangcheng ( near Harbin, Heilongjiang) as part of ongoing efforts to foster the development of sustainable dairy production in the market in order to secure the supply of raw milk. The project involves an investment of CHF30 mln and is one of its biggest dairy investments in China. GEA Group will contribute its expertise to this institute. From February 2015 onwards, some 17 different courses about milking will be taught with direct involvement of the GEA Farm Technologies Academy.

20/11/2014: Nestlé Research Centre Beijing organizes a joint symposium with The 25th Great Wall International Congress of Cardiology (GW-ICC). The symposium focuses on nutritional approaches for cardiovascular and metabolic health.

8/5/2015: Nestlé China helps building a school in the earthquake stricken region of Sichuan. The company deftly combined the opening of the school with the “Food Safety Week into Campus” launched by the State Food and Drug Administration.

18/5/2015: Chinese Nutrition Society’s “12th National Nutritional Science Conference” was recently held in Beijing May 2015. Nestlé organized a “Start Healthy Stay Healthy” forum during the conference, inviting leading experts to deliver keynote speeches revolving around the latest developments in maternal and child nutrition research.

4/8/2015: Nestlé has invested RMB 50 mln in improving the cold storage facility of its ice cream plant in Guangzhou. The new installation is more environment friendly and will facilitate Nestlé serving the regional market better.

8/6/2016: Nestlé and Alibaba have launched a digital commerce and marketing campaign. It will feature 154 products from 30 brands, 67 of which will be introduced to Chinese consumers for the first time.

12/9/2016: National Institute of Nutrition and Health and Nestlé Research Center partner as sponsors for a symposium on nutrition and eating behaviours in Chinese children and adolescents. For the first time in China, findings from the Kids Nutrition and Health Study (KNHS) were presented at a national symposium held on September 11, 2016 in Xian.

29/12/2017: Nestlé announces plans to sell its dairy factory in Hulunbuir (Inner Mongolia), as part of the company’s efforts to reduce its local output of raw milk powder.

16/5/2018: Nestlé announces a partnership with technology company Xiaomi to support health through technology and explore digital nutrition.

May 2018: Nestlé has finalised the move of its industrial milk powder production from Hulunbuir in Inner Mongolia to Saishang Dairy in Ningxia.

Nov. 2018: Nestlé announces the first product developed by its incubator team in China which had been launched earlier in the year. Xingshan is a new brand of ready-to-drink herbal drinks and soups made with traditional Chinese ingredients, for busy urban professionals.

22/3/2019: Nestlé China unveils a new Research & Development center in Beijing and a system technology hub in Shenzhen to accelerate its trend-based innovation in China.

Nov. 2019: Nestlé inaugurated its first Gerber NutriPuffs cereal snacks plant in Shuangcheng (Heilongjiang), with an investment of around RMB 100 mln.

April 2020: Nestlé is exploring options for the potential divestment of Yinlu Food.

May 20,2020: Nestlé announces it will invest more than 100 mln Swiss Francs in the Tianjin Economic-Technological Development Area (TEDA). This includes a significant capacity expansion of Nestlé’s existing pet food plant. The investment will also see Nestlé’s first production facility in Asia for plant-based products. In addition, there will be an upgrade of the production of Nestlé Chengzhen Wafer and Nestlé will further develop its Tianjin Nestlé Quality Assurance Centre.

Aug. 2020: Nestlé announces that it will invest in Tiantu Capital, a Chinese venture capitalist specialised in the food industry. A salient detail is that one of Tiantu’s latest investments is in Saturnbird Coffee, a Chinese innovator in the instant coffee sector.

Sept. 2020: Nestlé China has announced that it intends to invest CHF 53 mln in sustainable agriculture and production in Heilongjiang with an initial focus on organic grains.

Dec. 2020:Nestlé has made its official plant-based food debut in China with the launch of Harvest Gourmet, its nutritious plant-based food brand.

Dec. 2020: Nestlé has launched a milk product for adults (50+) in China, consisting of ingredients to support bone health, muscle strength and joint functionality.

Other opinion

Interestingly, in a recent article, a Chinese insider is wondering whether Dali Group will become the ‘Chinese Nestlé’. We will hold that thought and see.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success.