a2milk reaps big from China’s mother-and-baby stores and domestic e-commerce in FY2022

CHINA – Premium branded dairy nutritional company, a2milk Company, has reported strong sales of its infant milk formula in China via both mother-and-baby stores and domestic e-commerce channels in the full year 2022.

The company uniquely focused on products containing the A2 beta-casein protein type, said revenue was up 19.8 percent to A$1.45bn (US$997m) and net profit after tax (NPAT) jumped 42.3 percent to A$114.7m (US$79m).

The growth was largely driven by China, where its China label and English label infant milk formula sales were up 12.2 percent and 11.6 percent respectively.

In particular, demand for its China label product, a2 Zhi Chu (至初), had been strong over the year, and the firm had bumped up its presence in both offline and online stores

The sale of liquid milk and other nutritional products in China & Other Asia was up 34.4% to US$11.1 million and revenue from other nutritional products was also up 19.7% to US$22.1 million.

These impressive sales were achieved after New Zealand- based dairy had progress in executing against adjacent category growth opportunities, including the launch of UHT in China.

The company revealed that it has accelerated online growth as a strategic priority for China label IMF and performance in DOL.

 As measured by Smart Path, retail sales for DOL by value were up 4% for FY2218 and a2MC’s market value share in DOL increased to 2.5% at the end of June 2022 versus 2.0% at the end of June 2021.

The firm also uses cross-border e-commerce (CBEC) to sell its English-label products in China where sales were up by 53.3percent to US$255.8 million.

Meanwhile, its offline distribution, mother-and-baby stores, have expanded to 26.5k stores at the end of June 2022 from 22.8k at the end of June 2021.

Amazingly, the company has been experiencing growth when retail sales for the mother-and-baby stores were shrinking.

Citing data from Nielsen, although retail sales for mother-and-baby stores by value were down 2 percent in value in FY22, the firm’s market value share in this channel had, however, increased to three percent at the end of June 2022. This was also higher than the 2.2 percent seen last year. 

According to the firm’s consumer survey, there has been a higher brand awareness of a2mc’s products in China between January and July this year.

Its brand awareness in China was up from 16 percent to 21 percent between January and July this year, following a 36.3 percent increase in marketing investment.

The percentage of consumers who have tried the company’s infant milk formula product was also up from 19 to 20 percent, and those who claimed to use the company’s products most often had grown from 12 percent to 13 percent.

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