Chinese Creamer Maker Jiahe Foods Shifts Focus to Coffee Products to Vie With Dairy Giants(Yicai) Sept. 11 -- Chinese non-dairy creamer company Jiahe Foods Industry will shift its main business focus to coffee products to avoid competition from dairy giants that have forayed into the tea and coffee ingredient market.
“For the to-customer segment, Jiahe will sell package products on e-commerce sites and through offline channels,” Chairman and General Manager Liu Xinrong said at an investor relations event yesterday. “For the to-business segment, the company will target existing coffee chains and industrial clients.”
Jiahe’s main coffee products are roasted coffee beans, coffee powder, and coffee concentrate, Liu noted.
Chinese dairy companies have recently experienced difficulties in their main business segments, so they have aggressively expanded in the raw material business-to-business segment, which has shown significant growth.
Inner Mongolia Yili Industrial Group accelerated its expansion in the B2B catering, baking, and tea beverage markets in the first half of the year, the company’s management said in its latest earnings conference call. Yili is also planning to upgrade its B2B system.
China Mengniu Dairy has already moved its B2B focus to the catering, coffee, tea beverage, and baking industries, President Gao Fei said at the firm’s semiannual performance briefing. Mengniu’s main B2B customers were Kentucky Fried Chicken, Pizza Hut, Luckin Coffee, Cotti Coffee, and Mixue Bingcheng, which was one of Jiahe’s core customers in 2022.
As dairy giants expanded in the B2B market in the first half, Jiahe’s sales declined. As a result, its net profit halved to CNY69.4 million (USD9.8 million), and revenue fell 19 percent to CNY1.1 billion (USD150 million) in the six months ended June 30 from a year earlier.
In May last year, Jiahe announced a plan to raise up to CNY750 million (USD105 million) through a private placement. Of the proceeds, the company said it would use CNY550 million for coffee production expansion projects and CNY200 million for replenishing working capital.
Editor: Futura Costaglione
