CHINA – Chinese dairy giant Inner Mongolia Mengniu Dairy Group has reported a 27 percent increase in first-half Year-on-Year profits totaling 3.75 billion yuan after a gain from selling a subsidiary and the fair value of its financial liabilities rose.
The Hohhot-based company said its net profit was CNY3.8 billion (US$555 m) in the six months ended June 30, versus CNY3 billion a year earlier, while revenue rose 4 percent to CNY47.7 billion (US$7b).
The fair value of Mengniu’s financial liabilities rose by CNY773 million (US$113 m), and the disposal of a subsidiary brought CNY241 million (US$34.87m) , the firm noted.
Income from sales of liquid milk had a pick of 0.5 percent up to CNY39.7 billion(US$5.74b), milk powder products revenue reached CNY1.89 billion (US$270m )while that from ice cream jumped 30 percent to CNY3.9 billion(US$560m), despite the economic hurdles being faced.
“Mengniu’s fresh milk business continued to lead the market,” the company said, with “Its high-end brand, Shiny Meadow, and Modern Meadow fresh milk products achieved rapid growth far above the market level.”
The dairy giant also revealed to speed up the development of its online-to-offline delivery business and other online channels.
The home delivery segment grew over 35 percent, with an e-commerce market share of 28 percent which enabled Mengniu Dairy to lead in the online market segment for room temperature liquid milk.
Moutai ice cream’s potential growth in China
Meanwhile, market analysts in China are optimistic about the growth of the newly launched Moutai ice cream developed by Kweichow Moutai Co Ltd in partnership with Mengniu Dairy that has gone viral among consumers and is enjoying the backing of transboundary cooperation between different sectors.
Thanks to continuous innovation and transboundary cooperation with other sectors, in 2021, Inner Mongolia-based Mengniu Dairy saw its ice cream business achieve sales of 4.24 billion yuan, up 61 percent year on year.
The market size of the ice cream industry in China, an industry that sprung up in the 1990s, has had steady growth and has managed to surpass that of the United States.
A survey by market research firms KuRunData and Mintel said that the top three reasons for Chinese consumers to buy ice cream are trying new tastes, rewarding themselves, and after-dinner desserts.
From 2015 to 2021, sales of ice cream in China grew from less than 90 billion yuan (US$13.55 billion) to 160 billion yuan, up 90 percent cumulatively over the period, according to a report by Shenzhen, Guangdong province-based Qianzhan Industry Research Institute.
In addition, Chyxx projects the market which was valued at 160 billion RMB in 2021 to reach 275.19RMB (US$40.19b) by 2027, growing at a CAGR of 8.84% during the forecast period of 2021-2027.
The growth potential is also indicated by the rise in per capita consumption of the Chinese, although it is still far less than that of many other countries.
Last year, China’s per capita ice cream consumption volume is likely to have reached 2.9 kilograms, which doubled the level seen in 2011, according to GlobalData, a London-based data analytics and consulting company.
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