In 2024, the recovery of the consumer market is like a spring breeze, with data from the National Bureau of Statistics showing that GDP increased by 5.3% year-on-year, and per capita disposable income was not to be outdone, with a year-on-year increase of 6.2%. However, the dairy industry seems to be a bit out of step in this wave of recovery, with NielsenIQ data showing that dairy omnichannel sales growth fell 3.1% year-over-year in the first quarter.
In the dairy industry, the magic weapon of competition "brand, channel, product" is no longer the courage of the past. Today, the dairy industry is undergoing a spectacular transformation from basic categories to more innovative and scarce categories. At the same time, consumers are becoming more savvy, price-sensitive, cost-effective, and increasingly concerned about health and value. The dairy industry is showing a diversified trend of "nutritional addition, sugar-free and low-fat, conditioning and compound health, and raw health", which is undoubtedly a new challenge for dairy companies.
In the face of the growth pressure of the dairy industry, broadening the category track has become a way for many dairy companies to break the situation. For example, the dairy brand "Adopt a Cow" has launched fresh milk ice cream in two sizes, stick and cup, making its first entry into the ice track. This is not an isolated case, Feihe Ranch, Yili, Nestle and other brands have also launched their own new ice cream products, trying to get a piece of the fierce market competition.
Ice cream seems to have become a magic weapon for dairy brands to create market increments. Taking Yili and Mengniu as examples, their financial report data shows that the growth rate and gross profit margin of ice cream products are quite impressive. According to Yili's 2023 financial report data, the main business income of cold drink products in the current period was 10.688 billion yuan, a year-on-year increase of 11.72%, and the growth rate exceeded the growth rate of liquid milk and milk powder products, and at the gross profit level, the gross profit margin of cold drinks of 38.45% was also higher than that of liquid milk of 30.36%.
Mengniu has the same performance, especially after Mengniu and Moutai joined forces, the ice cream business revenue in 2022 will be 5.65 billion yuan, a year-on-year increase of 33.3%, and the revenue growth rate will slow down in 2023, but it will also maintain a 7% increase to 6.03 billion yuan. Industry insiders believe that the ice cream market has great potential, high attention from young people, diverse marketing methods, and great plasticity, which can bring marketing breakthroughs to brands, and at the same time form synergies with the dairy brand's own advantages, channel outlets and consumer groups.
The size of the global ice cream market is expanding and is expected to reach €80.8 billion by 2027. China's ice cream market is also promising, with the market size expected to exceed 200 billion yuan in 2027. However, the boom in the market has also brought fierce competition. Brands such as Yili, Heluxue, Mengniu and Nestle occupy half of the market, forming a concentrated market pattern.
The ice cream products launched by "Adopt a Cow" are priced at about 10 yuan, including three flavors: milk, strawberry and shengqiao, and are aimed at adult consumers and children. In the ice cream market, where the general price is 3-8 yuan, this price seems a bit high. Especially after the "ice cream stimulus" incident, consumers have become more rational and no longer easily pay for high prices.
Still, the success of Adopt-a-Cow ice cream needs to be tested by the market and consumers. The brand has the advantages of the industrial chain of pastures and milk sources, as well as the good reputation and brand power in the e-commerce channel. Just as its cup product is positioned as "professional children's ice cream, only clean ingredient list", whether it can attract the attention of the exquisite mother group will be the key to the success of this ice cream.
With the approach of midsummer, the ice track is about to usher in the peak sales season. Whether it is the delicious and inexpensive "sky-high price disappears and the mainstream of parity", or the truth that it is expensive and expensive, everyone takes what they need, and they will see for themselves! Let's wait and see how this ice feast will play out.