1) Ausnutria aims to produce high-quality goat dairy products up to the standard of Australian dairy. It has pursued an internationalization strategy involving acquiring supply chains in the Netherlands and cooperating with companies in Australia and New Zealand.
2) The company sees goat milk as having nutritional advantages over cow milk and has invested in clinical research and regulatory approvals internationally.
3) Ausnutria has built a global supply chain and distribution network for its goat milk products. The Kabrita brand in particular has grown rapidly in China and global markets due to Ausnutria's investments and market positioning.
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Ausnutria’s Efforts to Goat IMF ——Yan Weibin, Chairman, Ausnutria Dairy Corporation Ltd
1. Ausnutria’s Efforts to Goat IMF
——Yan Weibin, Chairman, Ausnutria Dairy Corporation Ltd
In terms of innovation, although Ausnutria is just a small company, it
does well in the production of goat dairy products. We are aimed to
produce goat dairy products that can up to the class of high quality of
Australian dairy. And that is also the origin of the name of our company.
The internationalization of Ausnutria has three steps. The first step is,
cooperate with the world-class supply chain companies to lay a good
foundation of the brand, when the company was just founded. We can
use relatively small amount of capitals to promote this cooperation. We
2. have been seriously building our brand, and selling Australia's
high-quality dairy products in China with our own brand and recipes. At
the same time, we have also achieved a good development in marketing
network. Our company was listed on the HKEX in 2009. After the listing,
we wanted to get further development, but the imperfection of the
supply chain restricted our further development. The possession of
enough and steady overseas supply chains is the second step of the
development strategy of our company. In 2011, we found the Hyproca
Dairy Group, a Netherlands company, who has been producing goat
dairy products for decades and has built a good foundation in this field.
It was a manufacture company with good history, who had been working
as the OEM of some big dairy companies. We merged this company in
the year of 2011. Then we worked out a new development plan in
December 2015.
In 2016, we decided to enter the nutritional products field, which is also
conform to the overall development strategy of our company. As a
latecomer, Ausnutria has no advantage in Hunan Provence, so we have
no way but to obtain supply chains form overseas. Integrate supply
chains form all over the world as the source of our development is what
we have always been insisting on. So we merged another company in
3. Netherlands, after the acquisition of the Hyproca. Then we merged
another Netherlands company of dairy acquisition, after we have already
had a strong supply chain. This allows us to have a good advantage to
realize the converting from a traditional milk factory into an organic milk
factory, from a cow dairy factory into a goat milk factory, which brought
us great advantage in the milk source. We are the first batch of dairy
enterprises to get the certification overseas. And the packaging factory
set up in Changsha also received a new domestic production license.
The dairy industry is intensely competitive, how can we stand out in such
a competitive market and make a big breakthrough? We decided to take
the production of goat milk as the development strategy of our company.
That is because that goat milk has a fairly high nutritional value, from the
perspective of the consumers. As is recorded in "Compendium of Materia
Medica", the goat milk is warm in nature and is more easily to be
assimilated. From the dimensions of the research we have further
confirmed that this product is more suitable for children, especially for
children who have an allergic to cow milk.
The World Dairy Goat Industry Development Forum held last year had
two objections, that is: on the one hand, from the perspective of
4. technical exchanges, the forum can get the experts who are engaged in
the study of the goat milk together to communicate with each other. On
the other hand, from the perspective of industry communication, the
forum can promote the communication of different brands so as to
boost the development of the whole industry. We have a little
competition among each other, but the competition among us is not the
most important one, the most important thing is to fight for the market
from other fields. So the participation of the forum showed that our
company is willing to share with others.
To do well in the production of goat milk, we must do a lot of clinical
research firstly. Our clinical research in domestic is mainly depends on
our own research strength and the joint research with the medical school
of Beijing University. Besides, our market positioning is not just confined
in China, but the whole world. We have also launched clinical research
both in Russia and the United States synchronously, which gives us big
confidence, for they can lay a better scientific basis for our products. In
addition to the scientific research, to do a new industry, we certainly
need to have a breakthrough in the compliance of the products.
Previously in Europe, there was no precedent of using goat milk as the
source of infant formula, so we promoted the regulation of this field. At
5. the beginning of 2014, to use goat milk as a kind of infant formula was
added to the European Code. That is a great progress. Moreover, in terms
of infant products, we made some infant clinical research with the FDA,
and promote the compliance of goat milk in the USA. In October 2016,
we officially got the FDA's GRAS certification, which approved the goat
milk, the concentrate of goat milk, and the whey protein concentrate as
the source of infant formula.
To do well in a certain industry is not just a question of the scientific
research; it needs the joint efforts of the entire supply chain. In the
Netherlands, as well as in its neighboring countries, we built a supply
chain from the ranch, and then built a comprehensive industrial chain
from the production, recipes to the entire sales service network, which
let us gain a little advantage in the new market, so that Ausnutria can get
a bit of progress in goat dairy.
Last year, there introduced a new policy about China's milk powder that
is in order to protect the interests of consumers, the manufacturer need
to give a clear indication of if the milk powder is goat milk powder and if
the whey protein powder comes from goat, which is very beneficial to us.
A few years ago, our company has already stipulated that the
6. concentration of whey protein must be from the goat, which allows us to
have a first-mover advantage in the market. We take a lot of work in the
creation of goat whey protein, which give us some advantages across the
world. Besides of the milk powder, we also formed an advantage over the
raw materials of infant formula. Now with the development of market
both in China and Russia, the business of the company have gained a
relatively good development.
What I want to tell you is that it may be much easier for us to choose a
different weapon in the competition of “Red Sea” market.
In order to be able to expend the market, in addition to do well in
research, supply chain and market, the more important thing is to attract
the consumers, so that the consumers can buy your products. Moreover,
we have to make the dealer and the store willing to sell your Products.
And all of this are based on our education to the consumers.
7. In recent years, from the perspective of the entire milk powder market of
China, the development of goat milk powder is much faster than milk
powder. The goat dairy products were first launched in 2011; by 2013 the
market size of the goat dairy products reached 2.5 billion, and then 3.2
billion by 2014, 4 billion by 2015, 5.2 billion by last year, which is the
advantage of a new category. The fast growth in the past has laid a good
foundation of us. The next few years, the goat dairy market will still grow
faster than the cow dairy market. Due to the high technological of goat
milk powder and its uniqueness to the whole market, it will inevitably
have better growth potential than other products. Kabrita is a brand that
had already been in existence before our acquisition, but the
Netherlands haven’t made it big after many years of efforts. After we
took over the company, the first thing we did is to clarify the intellectual
property thing. We bought up the intellectual properties of the brand
8. which were registered in other places so as to build it into the main
product of our joint venture business in the future. The second thing is
the comprehensive re-creation of the image of the brand. We gave it a
fairly new look, so that it can be re-launched in the world synchronously.
This way of development is constructed on the basis of the plentiful
experience of the Ausnutria in the field of milk powder production, which
can easily acquire the customer relations and awareness. In 2011, we
specifically set up a company for the goat milk powder, gave the team
part of the stake, which mobilized the initiative of them to a large extent.
By the year 2015, we have not only completed the market layout of
Kabrita in China, but also completed it in the market of North American
and the CIS, so as to really turn the Kabrita into the most important core
business of Ausnutria. In 2015 and 2016, we accounted for 50% of the
import share in this category. Thanks to the foresight of us to move into
this industry much earlier than other companies, we can develop much
faster than them.
As a Chinese dairy company, how can we stand out in the competition
with some foreign companies in the foreign markets? The point is we
mainly use goat milk powder as our spearhead, and then followed up the
9. development of organic milk powder in the international market almost
at the same time. Now our global market layouts have basically ended.
Last year, the overall overseas brands of the company were profitable.
The original prediction was that we will not get payback until 2020. But
surprisingly, the overseas cash flow and profits were all showed a turn
from loss to profit in 2016.
How to realize the internationalization of Chinese companies? The
experience in the development of the goat milk is to make a new project
of a special product. The first step is to build up the industry chain.
Ausnutria announced a new development plan in 2015, in order to meet
the coming of the golden ten years of Ausnutria. We hope we can not
10. only get the optimization of the technology of goat milk production, but
also get the respect of the whole world in the field of infant cow milk,
and become the world's leading Infant formula milk powder company
through the conduction of the new development plan. We have also
made a comprehensive arrangement on our supply chain, which
included technical investment, technological transformation and sales
growth after the acquisition of several factories in Netherlands. In order
to expand the overseas markets, we established an infant milk powder
company with the cooperation of Westland Milk Products, which is the
second largest dairy company in New Zealand. The new company will be
put into operation in this year. And our factory which is located in
Australia will also be immediately put into operation, so that we can
really be prepared in terms of supply chain and scientific research. In
addition, we can also win in the Red Sea market depending on our
products and efficiency. And that is the global layout of our cow milk
powder business. In the era of interconnection, the connection is the
most important value. As for us, the most important value is the
connection between the company and our consumers. We hope to be
able to provide nutrition services from the preparation to pregnant of
the mother-to-be to the grown up of the children till 3-year-old. And we
also hope that we can continuously provide nutrition services afterwards.
11. So in 2016, we turned the investment orientation into the functional
health-care food products. First of all, we acquired a vitamin company in
Australia. And then we merged the Nutrition Care, an Australia company.
Although the company is not in a large scale, it is the most professional
nutrition brand, the products of which have all been recommended by
the doctors. We hope that we can realize the precise medical services by
entering the functional health-care food products.