Author: Xiaoshidai
After entering the "10 billion club" with annual revenue last year, the domestic dairy "fresh" force once again delivered good results on behalf of the brand New Dairy.
On April 25, the company released its 2023 performance report, achieving operating income of 10.987 billion yuan, a year-on-year increase of 9.8%, net profit attributable to the parent company of 431 million yuan, a year-on-year increase of 19.3%, and non-net profit attributable to the parent company of 465 million yuan, a year-on-year increase of 57.9%.
It is worth mentioning that this is also the fifth consecutive year that New Dairy has maintained revenue and profit growth since its listing.
Since 2023, the dairy industry has faced pressure from insufficient demand and weak consumption, and the overall sales volume of liquid milk has declined slightly. However, thanks to the insight into the trend of the consumer market to pursue both high-end and cost-effective, New Dairy has achieved growth in 2023 by continuously deepening the "Fresh Cube" strategy, strengthening its core business, and increasing technological innovation.
Let's take a look.
Strengthen low temperatures
From the perspective of New Dairy, in the context of the long-term improvement and cyclical adjustment of the dairy industry, the fresh milk business with "freshness" as the core has become one of the dairy segments with significant anti-cyclical and fastest growth in recent years due to its strong competitive barriers and high entry requirements.
Xiaoshidai once reported that in May 2023, New Dairy released a strategic plan, proposing the goal of "expanding and strengthening the core business, enhancing corporate value, and doubling the net profit margin in five years". Under this goal, the company continues to make efforts to strengthen the market positioning with "fresh" as the core.
According to the financial report, in 2023, the company's fresh milk will increase by double digits year-on-year, the overall revenue of DTC business will increase by more than 15% year-on-year, and the revenue of new products will account for 12%, and the market positioning with "fresh" as the core will continue to strengthen.
In this fiscal year, New Dairy focused on low-temperature fresh milk and low-temperature specialty yogurt, and launched a number of new products to promote the further upgrading of low-temperature categories, becoming an important engine for growth.
Among them, "24-hour fresh organic milk" refreshed the definition of "fresh organic" with "true freshness, true activity, and true traceability", and the "24-hour" high-end series products increased by nearly 40% year-on-year; the main fresh "Today's Fresh Milk Shop" launched a high-calcium upgraded version, and the "thick" milk doubled year-on-year; the low-temperature yogurt "Activated Crystal Ball" product completed the iterative upgrade; and the special product sparkling yogurt "Leqi" added two new flavors: peach and cola.
Technology empowers
Xiaoshidai noticed that in addition to those large single products, the performance of a number of new products in the new dairy industry during the reporting period also performed well.
For example, in the field of low-temperature flavored milk, New Dairy has newly launched raw milk mung bean shuang, beibei pumpkin milk, and five-black nutritional milk according to the seasonal flavor, and has become a new engine for growth through the rapid production of low-temperature flavored milk products;
According to the financial report, the revenue of new products of New Dairy will account for 12% in 2023, and the proportion will remain in double digits for three consecutive years. This also shows that New Dairy has never stopped pace in scientific and technological innovation and transformation of scientific and technological achievements.
In fiscal year 2023, New Dairy invested in biotechnology, digital technology and other scientific and technological fields around the "Fresh Cube Strategy", and on this basis, it achieved continuous innovation achievements in products, services, marketing and other paths, and built a technological moat for the company's core business.
In addition, New Dairy continues to deepen the field of probiotics. According to the financial report, during the reporting period, New Dairy established a "molecular power" biotechnology company, focusing on the research and transformation of achievements in the direction of biotechnology such as probiotics and enzyme engineering, with more than 1,500 strains in the platform strain bank, and has realized the industrialization of its own starter culture and probiotics, and has taken a solid step in the domestic substitution of strain "chips".
Channels & Marketing
In the FMCG industry, there is a saying that "those who win the channel win the world", and it is of great significance for the company to occupy a strong position in the competition and deepen the channel. In order to further improve the penetration rate of low-temperature milk, it is equally important for the new dairy industry to deepen its cultivation at the channel level.
New Dairy also shared its channel layout in its 2023 financial report.
On the channel side, New Dairy has intensively cultivated local resources, improved its operating capabilities, and driven the continuous expansion of its "fresh territory", with significant growth in the scale and management level of DTC business. In 2023, the overall revenue of New Dairy's DTC business will increase by more than 15% year-on-year, of which the far-field e-commerce business will increase by more than 40% year-on-year, and the self-subscription business will increase by more than 15% year-on-year. The sales volume of "Fresh GO" exceeded 270 million, and the number of global digital users exceeded 19 million, a year-on-year increase of nearly 50%, and the repurchase rate of cyclical users throughout the year was effectively improved, and the support ability of "Fresh GO" to support business was significantly improved.
Under the continuous promotion of the urban agglomeration strategy, New Dairy has strengthened the construction of three-dimensional channels, actively expanded core channels such as snacks, fresh food, and supermarkets in key areas around the base market, accelerated the penetration of surrounding foreign markets, and further increased its market share. Focusing on fresh products with one hand and three-dimensional channels with the other, New Dairy focuses on its core business capabilities, and its net sales margin will be increased in 2023.
In addition, New Dairy has also taken a lot of actions in marketing to continuously enhance its brand influence.
In the past year, under the theme of "New Life, Fresh Departure", New Dairy successfully held the "9th Milk Fan Festival" and the "4th Fresh Milk Festival" in 7 cities across the country, enhancing the brand's potential and sharpness through user-centered new marketing. In terms of brand rejuvenation marketing, while co-branding major IPs, New Dairy strives to build a private domain traffic pool, incubates hundreds of internal high-quality KOCs and KOLs, and releases a total of 25,000 pieces of content annually around core products, with a total of more than 70 million total readers.
Digital transformation
Since 2022, New Dairy has begun to fully deploy the "Lighthouse Project Group". Last year, this digital transformation continued to deepen, and the initial investment began to feed back the entire industrial chain from marketing to production, from factories to pastures, especially the digitalization of the supply chain based on digital factories, PMC lean management and optimization, and milk source digitalization, which improved the company's operational efficiency.
Taking the breeding sector as an example, New Dairy has strengthened refined management through digital means, continuously promoted the progress of breeding technology, focused on improving operation efficiency, and established a demonstration farm for key technologies for green dairy cows to improve quality and efficiency. After the launch of the new dairy digital factory, it further met the needs of flexible production, and the lean management of the supply chain promoted the online rate of the whole business system and omni-channel orders to reach 90%, realized the streamlining of personnel and the improvement of efficiency, and reduced the cost of the whole supply chain system, and the annual labor and manufacturing costs per ton decreased by more than 5% year-on-year.
At the same time, the digital traceability platform "Fresh Source" project has realized transparent closed-loop management and forward and reverse quality traceability in the whole process, realized the docking with the food safety information system of local governments such as Yunnan, improved the accuracy of quality analysis and the sensitivity of abnormal alarms, and better ensured food safety in the form of digital technology.
Since the listing of New Dairy, it has maintained both revenue and profit growth for five consecutive years, and once again stepped up to the annual revenue of 10 billion yuan, which shows that the moat built by the company around the word "fresh" has been formed. How to maintain its competitive advantage in the market changes and economic cycles, and further consolidate the position of the representative brand of fresh dairy industry, and run out of more possibilities, the future of new dairy industry is worth paying attention to.