Produced by | At the forefront of entrepreneurship
Reporter | Fu Yancui
Edit | Feng Yu
American Editor | Li Yufei
Audit | Ode
As the "No. 1 stock in China's dairy industry", Bright Dairy once again handed over an unsatisfactory report card.
At the end of April, Bright Dairy's "belated" performance failed to meet expectations. In the first quarter of 2024, the company's revenue decreased by 9.25% year-on-year to 6.417 billion yuan, and the net profit attributable to the parent company decreased by 8.07% year-on-year to 172 million yuan. In the past 2023, Bright Dairy's revenue will be 26.485 billion yuan, a year-on-year decrease of 6.13%; Although the net profit attributable to the parent company increased by 168.19% year-on-year to 967 million yuan, the pre-tax income of land compensation exceeded 400 million yuan.
Bright Dairy also had a "bright" past.
Bright Dairy's business was first started in 1911 and has a history of 100 years. It has brands such as "Bright Cold Drink", "Zhiyou", "Youbei", "Rushi", "Changyou", "Jianneng JCAN", "Moslian", "Youjia", "Milk Shack", "Guangming Youbake" and so on.
(Photo / Bright Dairy official WeChat)
In 2002, Bright Dairy was the first to go public, leading the national dairy industry with a revenue of 5.022 billion, and at that time, its market value was equivalent to 11 Mengniu.
However, since 2016, its revenue has never exceeded 30 billion yuan, and its market value has fallen from the highest point of 23 billion yuan in 2021 to 12.5 billion yuan now. As a comparison, Yili's market value is 177.9 billion yuan, and Mengniu's market value is 66.7 billion Hong Kong dollars.
As room temperature milk gradually becomes the mainstream, Bright Dairy, which has been deeply cultivating low-temperature fresh milk, is limited by milk source and cold chain cost conditions, and its sales radius is limited, so it can only move around in East China. Later, even if the cold chain logistics was built and the regional restrictions were eliminated, the room temperature milk giants gradually focused on the low-temperature milk track, and new challengers emerged one after another.
Since the resignation of Wang Guifen, the "soul figure" of Bright Dairy, in 2008, Bright Dairy, which has experienced five changes of leadership in the past ten years, is facing a severe test in the increasingly involuted dairy industry.
1. Relying on land sales, net profit increased by 1.6 times
Since the 50s of the last century, many Shanghai consumers have almost all such scenes in their childhood memories: the morning light gradually brightening, the alleys with loud voices, the small key, gently turning to open the milk box, and taking out the bright milk inside.
As a century-old dairy enterprise, Bright Dairy does not forget to help consumers recall the good memories of their childhood from time to time. For example, in the hit drama "Flowers" at the beginning of this year, there were many direct appearances of the bright milk box hanging on the red wall tiles, the bright banner advertisement on the bus, and the butterfly cake of the bright milk shed.
(Photo / TV series "Flowers")
Faced with slowing performance, since Huang Liming took the helm of Bright Dairy at the end of 2021, the latter has been working hard to boost performance. Marketing, cross-border co-branding and new product development have become indispensable.
Bright Dairy revealed in its annual report that it will continue to increase investment in brand and marketing, strengthen the application and dissemination of digital new media technology, grasp new hot spots such as Internet celebrity economy, fan economy, and community economy, create private domain traffic, enhance brand rejuvenation index, closely combine brand, product promotion and marketing, achieve precise delivery, and drive the company's performance growth.
Perhaps due to the influence of joint activities such as Mengniu Ice Cream, Luckin Coffee and Moutai, Bright Dairy has also begun to frequently cross borders. For example, it cooperated with Wang Yutai to launch Longjing milk tea, cooperated with Taiji Group to launch Xiaohuo Xiang ice cream, and jointly launched orange juice popsicles with Zhengguanghe.
At the same time as the brand crossover, Guangming is also vigorously developing new products. In 2023, Bright Dairy will develop and launch 63 new products, including Zhiyou Raw DHA Fresh Milk, Bright Light UFIT Ready-to-eat Probiotic Powder, Bright Changyou 0 Belly Dan Flavored Fermented Milk, Guangming x White Rabbit Crispy Ice Cream, etc.
(Photo / Bright Dairy official WeChat)
From the perspective of income, compared with the previous target of 32.05 billion yuan, the performance of Bright Dairy is still not ideal. In 2023, the company will achieve a total operating income of 26.485 billion yuan, and the revenue completion rate last year was 82.6%.
From the perspective of specific business, Bright Dairy includes three major business segments, of which the revenue of dairy business was 23.006 billion yuan, a year-on-year decrease of 4.5%; animal husbandry revenue was 1.757 billion yuan, a year-on-year decrease of 33.47%; The revenue of other segments was 1.384 billion yuan, a year-on-year increase of 24.75%.
Bright Dairy said that the target was not completed mainly because the growth rate of the domestic dairy industry slowed down, the market competition was fierce, and the operating income of dairy products did not meet expectations; At the same time, the animal husbandry sector is affected by the imbalance between supply and demand in the industry, and the income of animal husbandry products such as feed has declined.
It is worth mentioning that Bright Dairy's net profit attributable to the parent company in 2023 will be 967 million yuan, with a completion rate of 142.21%. However, the main reason why Bright Dairy will exceed its profit plan in 2023 is the sale of land.
Bright Dairy said that the company located at No. 777 Chengshan Road, Pudong New Area, Shanghai, implemented the collection and storage, and recognized the land compensation income in the current period. According to the previous announcement of Bright Dairy, the No. 777 plot of Chengshan Road, which was acquired and stored by the Pudong New Area Government, mainly contains two plots. The compensation for the two plots is about 424 million yuan and 8.2318 million yuan respectively.
In addition to land compensation, Bright Dairy's net profit attributable to the parent company in 2023 will only be about 530 million yuan, which is still a big gap with its previous net profit target of 680 million yuan.
As a 30-year veteran of the dairy industry, Huang Liming was full of ambition when he took over as the head of Guangming. But now more than two years later, Bright Dairy is still facing a slowdown in revenue growth and sales pressure.
2. The development problem of time-honored brands
Wang Jiafen, the "Iron Lady" who once sent Bright Dairy to the leading position, once said, "Our main products have always been fresh milk and yogurt, and our basic strategy has always emphasized freshness and has never wavered." ”
As early as 1992, Bright Dairy introduced the concept of milk preservation from France and began to establish a complete refrigeration logistics.
According to the data, all production links of Bright Dairy are carried out in a refrigerated environment (0 °C ~ 4 °C), in order to make the cold chain in the last kilometer can not be interrupted, Bright Dairy has established a small community cold storage in Shanghai, and equipped with a large number of three-wheeled distribution vehicles with insulation layers and ice packs, plus the user's insulated milk box, so that consumers can get the milk before work at 7 o'clock in the morning is still cold.
Relying on advanced cold chain logistics, Bright Dairy has achieved milk delivery to homes in East China, and successfully landed on the Shanghai Stock Exchange in 2002, becoming the "first stock of China's dairy industry", when the revenue exceeded 5 billion yuan, Yili and Mengniu were still regional brands in border towns.
However, with the development of the times, "freshness" has become the core competitiveness of Bright Dairy, but also gradually become a shackle that restricts its development to the whole country.
Previously, the fresh milk sterilization technology was mainly pasteurization, which was sterilized at a temperature of 72 °C-85 °C for 15s, which could eliminate harmful pathogens in raw milk almost without destroying the nutrition of milk, but the shelf life of pasteurized milk was 5-7 days. As a result, fresh milk is limited by milk source and cold chain costs, resulting in a limited sales radius and can only be quickly distributed within a radius of about 300 kilometers from the milk source.
As a result, Bright Dairy's low-temperature fresh milk is subject to the cost of cold chain laying and transportation distance, etc., and it can only be transferred to room temperature milk in terms of scale efficiency, and can only be rotated in East China.
On the contrary, Yili and Mengniu began to develop the normal temperature milk in 2003, because it has been heated at a high temperature of more than 100 degrees, although the nutrition is reduced and the taste is worse, but the shelf life can be as long as 6 to 12 months, which is not only suitable for long-distance transportation, but also only a quarter of the cost of low-temperature milk. The iteration of sterilization technology has also successfully allowed room temperature milk to enter the stage of rapid laying of national channels, and it has been strongly attacked from third- and fourth-tier cities to super first-tier cities.
As a result, in 2003, Yili quickly surpassed Bright Dairy to become the market leader. In 2004, Bright Dairy was surpassed by Mengniu.
After more than 20 years of development, Bright Dairy has been working hard to break through the regional restrictions of the brand.
According to the information on the official website, Bright Dairy currently has 28 pastures, 17 dairy processing plants, and its Lingxian Logistics has set up 65 integrated logistics centers across the country, with a total warehouse area of more than 172,000 square meters and more than 50,000 daily distribution terminal outlets. The company's products and channels are located in Shanghai, East China, Central China, South China, North China, Southwest China, Northwest China and other regions.
However, from the consumer side, the user's perception of the brand is still half a beat slower than the company's logistics layout - Shanghai is still the base camp of Bright Dairy, and outside the base camp, there is still room for improvement in the brand effect of Bright Dairy.
Beipiao Li Mei, who was born in Shanghai, told "Jiemian News - Entrepreneurship Frontline" that Bright Dairy's low-temperature milk is a brand recognized by Shanghainese, and she will only look for Bright brand milk when she goes to supermarkets, "And in my memory, the convenience store near my home, the five-row freezer, Bright Dairy's products can occupy nearly one-third of the area." ”
But Li Mei, who came to Beijing to work, found that Sanyuan, Yili and Mengniu were more powerful in Beijing's convenience stores, "If you want to buy Bright Dairy's products, you have to go to the store to 'search' carefully." ”
"Jiemian News - Entrepreneurship Frontline" also found in a supermarket in Hebei Province that Bright Dairy's fresh milk and yogurt can only occupy one column in the freezer, while Junlebao, which is adjacent to it, can occupy six columns.
(Photo / Bright Dairy's products on the freezer)
In fact, from 2022 onwards, Bright Dairy's revenue in foreign markets has shown a negative growth trend, with a year-on-year decline of 5.07%; In 2023, the revenue from foreign markets will be 11.715 billion yuan, a year-on-year decrease of 13.30%.
Obviously, how to go out of Shanghai and go to the whole country, how to go out of Shanghai and go to the whole country is still a problem.
3. Siege of "Bright Peak"
In recent years, the concept of "those who get the milk source gets the world" has penetrated into the dairy industry, and after 2018, as the price of raw milk has entered an upward cycle, a new round of pasture construction fever has emerged in China, and dairy farms have sprung up.
However, since the second half of 2022, consumer demand for dairy products has grown slowly, while raw milk production capacity has continued to increase, resulting in an imbalance between supply and demand. This supply-demand imbalance puts dairy farmers at risk of overstocking raw milk and having to sell it below cost.
At present, there is a periodic surplus of fresh milk, and the price continues to decline. According to data released by the Department of Market and Information Technology of the Ministry of Agriculture and Rural Affairs, in January 2024, the price of fresh milk fell slightly, and the purchase price of fresh milk in the dairy producing province was 3.65 yuan per kilogram, down 0.5% month-on-month and 11.2% year-on-year.
After the upstream cost was reduced, some small and medium-sized dairy enterprises purchased low-cost loose milk, and the products produced by them carried out rounds of price wars in the terminal market by virtue of their low-cost advantages, and the industry was seriously involuted.
At the same time, more and more leading dairy companies emphasize health labels, and at the same time the price is high, and the low-temperature milk of "no additives", "nobility in milk" and "high-end milk" is regarded as the second growth curve of the development of dairy enterprises.
Mengniu Dairy established a fresh milk division and launched the brand "Daily Fresh Language"; Yili Co., Ltd. established the Jindian fresh milk brand and officially entered the field of low-temperature milk; Nestlé has also launched its first cold-chain fresh milk – and they have used their existing advantages to launch a siege on the bright fresh milk base.
For the core business to continue to usher in new challengers, the management of Bright Dairy Company said at the 2023 semi-annual results briefing that from the perspective of industry trends, the fresh milk category has expanded rapidly in recent years, and it is a promising segment of the dairy industry. "As the builder and advocate of 'freshness' in the dairy industry, Bright Dairy coexists with 'danger' and 'opportunity'. Fresh milk is the bottom plate for the development of Bright Dairy, and it must maintain its position as the first in the industry. ”
(Photo / Bright Dairy official WeChat)
But under the siege of many competitors, it is not easy for Bright Dairy to maintain this goal.
"There were only a few kinds of low-temperature milk before, such as Guangming, Sanyuan, Wandashan, etc., and now the fresh milk showcase is getting bigger and bigger, and there are more and more brands, but the position of Bright Dairy has become smaller and smaller." Liu Han, a liquid milk promoter in a supermarket in Gu'an, Hebei Province, told "Jiemian News - Entrepreneurship Frontline" that the main reason is that "it can't be sold", and Bright Dairy's promotion efforts are not as good as other brands, "consumers are too expensive." ”
Liu Han said that now brands are fighting a promotional war. Whether online or offline, you can see liquid milk, yogurt, milk powder and other categories sold at reduced prices, buy more and reduce more.
There are limited cakes in the market, but there are many predators. Today, although Bright Dairy can still hold on to its regional and channel advantages in East China for a while, it is difficult to develop business outside the base camp, which also means that other regional markets are being occupied by more competitors.
In fact, the fresh milk business of leading dairy companies has been reported frequently: in 2023, the retail sales of Yili Jindian's low-temperature fresh milk series will increase by 54.6% compared with the previous year; New Dairy's liquid milk revenue in 2023 will be 9.76 billion yuan, a year-on-year increase of 11.2%, mainly related to the "fresh + innovative" strategic adjustment it has adopted in recent years.
However, the sales volume of Bright Dairy's base camp has fallen into a growth bottleneck. In 2023, its revenue in Shanghai will be 7.112 billion yuan, a year-on-year decrease of 4.13%.
Under the pressure of declining performance, poor channel sales, less than expected extraterritorial expansion, and intensified competition in the same industry, there seems to be little time left for Bright Dairy to regroup.
*Note: The title image in the article is from the photo network and is based on the VRF protocol. Li Mei and Liu Han are pseudonyms in the article.