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Operator Finance Network Fang Yue/Wen
A few days ago, Danone announced its 2018 financial results, and its net profit fell by 4.1% year-on-year, especially the growth of single-brand pulse decline was obvious. Not only that, the operator Finance network found that in January this year, Danone's Yili bottled water has announced the suspension of production, it can be said that Danone's situation in 2019 is still not good.
However, Danone, a large company that has won the titles of The Third Largest Food Group in Europe, the Second Largest Mineral Water Producer in the World, and the World's No. 1 Bottled Water Producer, has been "in danger" in recent years?
"Water" roads are difficult to navigate
According to Danone China's official website, Danone has many drinking water and beverage businesses in China, in addition to Loeb's pure water, it also has pulsating vitamin drinks, Yili mineral water, Suiyue vitamin fruity drinks, etc., but although there are many products, the development status is not satisfactory.
In 2000, Danone acquired a 92% stake in Robex, becoming the company's largest shareholder. Subsequently, several business segments of Robex were gradually divested, and finally a single business of drinking water was left. In 2016, Danone sold its Loeb, with the brand belt factory, and spun off Loeb as a whole.
Some people questioned that The sale of Loeb was to make room for Yili and weaken the pressure of competition with the same door, but in fact, Yili did not get better.
As early as two years ago, some netizens issued a question of "how did Yili disappear". From the beginning of Yili and Yibao in Shenzhen equally divided, to fall out of the top six in the domestic market for drinking bottled water, and then gradually fell out of the public vision, the development of Yili bottled water has deteriorated.
Nowadays, Yibao bottled drinking water has become the second largest bottled drinking water brand in China. In this contrast, Yili Bottled Water can really be called "today is different from the past", falling from the peak to the bottom, which can't help but make people sigh.
Not only that, but Danone's most impressive product is Pulsation. It is as if the advertising slogan of "anytime, anywhere, pulse back" is still in the ear, and pulse is attracting much attention because of the sharp decline in performance dragging down Danone.
Since its launch in 2003, Pulse has experienced a period of rapid growth between 2009 and 2014, expanding from regional markets to the whole country. Danone's 2016 financial report showed that due to the impact of inventory adjustments in the market transformation, Pulse's sales in China declined throughout the year. According to Danone's 2018 financial report, Danone Group's net profit was 2.349 billion euros, down 4.1% year-on-year.
In this regard, Emmanuel Faber, chairman of the board of directors and CEO of Danone, made it clear at the analyst meeting that Pulse's results have dragged down Danone's overall performance in 2018 to some extent, and is not satisfied with Pulse's performance in the fourth quarter of 2018, and does not expect the product to grow significantly in 2019.
It is no denying that from Robex to Yili to Pulsating, there are signs that Danone Group's road to drinking water development is not smooth.
"Milk" road is not smooth
Danone Group can still be called a big man in the dairy industry, but since the end of 2015, after the forced "departure" of Domezi milk powder, the situation has been bad in recent years, and its share in the Chinese market has been repeatedly squeezed by outsiders such as Meisu Jiaer and Wyeth, and the development path of Danone milk powder in China is not smooth.
On October 17, 2018, France's Danone announced its new quarterly earnings report, which is the company's worst performance growth in more than a decade, and Danone's stock price fell 4.4% after the earnings report. At the same time, according to Danone's latest 2018 annual performance report, Danone's infant milk powder market is weak, and the growth rate of performance in the first three quarters has declined significantly, although the early life nutrition business has improved in the fourth quarter, but it has not been able to completely get out of the predicament.
A few years ago, the General Administration of Customs of China issued an announcement to renew the registration of 64 overseas production enterprises of imported infant formula dairy products with registration validity until the end of 2018, of which 55 were successfully approved.
It is understood that the 9 enterprises that have been deregistered due to failure to submit applications for renewal of registration include Danone. This means that Products produced on or after January 1, 2019 by Danone may not be imported. Products produced before January 1, 2019, with a shelf life of less than three months at the time of customs declaration, shall not be imported. ”
It is worth noting that danone's dutch production site was completed recently, costing 240 million euros. In addition to ordinary formula milk powders such as Nuoyouneng and Aitami, Danone has also made great strides into special medical infant formula. However, Danone has been dequergiated for import due to failure to submit an application for renewal of registration, and can the new formula be listed and occupy a place in the Chinese market?
Not only that, in March this year, Royal Meisu Jiaer 3rd stage milk powder was out of stock in many parts of the country, and the sales of Meisu Jiaer's consumer products in China in 2017 were about 4.68 billion yuan; and the sales of Wyeth milk powder reached more than 12 billion yuan. Danone's desire to come out on top in the domestic milk powder market remains to be considered.
Looking back at Danone's growth path, from the original food industry leader to the current frequent negative and highly concerned, what is the possibility of Danone racing in the Chinese market?
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