(Yicai Global) Nov. 22 -- As competition becomes ever more blood-curdling, Chinese milk powder producers are actively releasing high-end milk powder products in a bid to stop their profits from going sour.
Yicai Global has learned that organic milk powder has become the byre of dairy enterprises' coming competition, with 33 Chinese organic milk powder brands now selling it.
On Nov. 21, Biostime Group [HK: 01112] said it will whey in with the first organic infant milk formula powder in China's market. Zhu Dingping, general manager of the infant nutrition and nursing materials of Biostime Group, told Yicai Global that this participation in the competition over organic milk powder just aims to skim above the homogenized competition and grasp a new udder of growth for dairy businesses to milk.
Dairy expert Wang Dingmian told Yicai Global rules for organic products are stricter. Per regulations, the organic-only portions of cattle feed must be as much as 95 percent, and therefore organic milk powder products still make up merely a modest portion of the whole.
Song Liang, a senior dairy analyst, said that, in 2015, the domestic market share of all-channel organic milk powder was about CNY30 billion (USD450 billion). Song also told Yicai Global unremitting price competition and the impact of online and cross-border shopping on Chinese producers' performance in the milk powder business has induced each enterprise to seek to stamp its own unique competitiveness. Some enterprises opt to go organic, while others plump for goat milk powder to take advantage of these products' price differentials from prevailing international norms. Also, these products' significant divergences from ordinary market brands also bolster their sales prices and thus promote the performance of both channels and enterprises.