Bovine Colostrum Products Face Challenges Summary: Data from 5 key processors shows that their performance in H1 is rather mixed, reflecting market challenges. Tags: grain & food processors, General Administration of Customs of China, local food safety standards, dairy farming, UHT milks, infant formula product, the State Council
There are indications that recent sales of bovine colostrum products have been poor. This appears to be the result of the policy – released in April by the Ministry of Health (MOH) and effective from 1 September – which stipulated that bovine colostrum could not be added to 1st/2nd/3rd stage infant formula (please see Dairy Products China News, Vol.5 May issue, p9) , according to CCM’s September issue of Dairy Products China News.
Pure colostrum powder, tablets and capsules are still available now and are not limited by the policy. However it appears that, as was raised as an issue by the trade back in April, many consumers have become concerned about products with added bovine colostrum since the policy was released. Some distributors are indicating that sales of bovine colostrum products decreased by nearly 90% from May to August, and some suppliers have been streamlining their product ranges as a result.
Yet bovine colostrum infant formula remains available, especially on e-commerce sites: whilst they are being discounted, products imported or produced before 1 September may still be sold up to their expiry dates. For example, Nouriz colostrum milk powder imported from New Zealand with its original package is selling at USD15.8 (RMB100), a 3.8% discount. But the sales seem poor: only 225 cans were sold in the last 3 months according to the sales record from Nouriz’s official e-commerce site on tmall.com.
There is no national standard for bovine colostrum products in China, only the industry standard RHB602-2005 for bovine colostrum powder. Their efficacy is unproven and demand appears largely limited to mothers. According to a survey from China.com which ran up to 18 September, mothers represented 73.2% of customers for bovine colostrum products. From these mothers, 67.6% indicated that they knew something about bovine colostrum. The spending on such products is relatively low, in most cases only accounting for 9-10% of the total spending of a family.
The most popular brand of bovine colostrum powder is Shelca among domestic consumers according to the survey; 2 New Zealand products which we have covered before in past issues fared less well: Biolife ranked 9th favourite and 6th most familiar, and Neutrien ranked 8th and 7th respectively (please see Figure 9). Unexpectedly, Sunlife, Biolife and By-health all achieve
mediocre rankings, though they are the largest players in the market (the former 2 import their products pre-packaged, whilst By-health manufactures its products with imported ingredients).
Marketers typically target their bovine colostrum products at adults, elderly consumers and older children who need nutrition supplements, and persuade consumers to add bovine colostrum powder to infant formula, but avoid discussion of the Government policy wherever possible.
Impact on the infant formula market seems minor, as this is a minor niche in the overall market. Most domestic producers state that they will not produce such products any more; major dairy processors avoid the category and no new bovine colostrum products are likely to be launched until the situation is clarified. This will certainly assist challenges to the category from other nutrition products unless the Government moves to address the issues which have arisen about standards of identity in this area. Meanwhile the effect has been to make the international colostrum market difficult for suppliers – for example the market situation was a factor in Westland Milk Products reduced colostrum collection and its lower 2012-13 payout forecast in August.
Source: Dairy Products China News 1209 http://www.cnchemicals.com/Newsletter/NewsletterDetail_22.html
Content of Dairy Products China News 1209: High Prices for Dairy Products Prospects for Pasteurised Milk Bovine Colostrum Products Face Challenges Dairy Imports Increase Jiangsu Addresses Potential School Milk Safety Scares Mengniu Growth Strategy Bright Dairy Faces Further Scandal Tianhong Enters the Dairy Industry Natural Dairy Records Further Losses Wahaha to Target Overseas Investment Modern Dairy Performs Well in 2011 & 2012 Carrickmore Targets Formula Market Amway Expands Nutrilite Business Dairy Products China News, a monthly publication issued by CCM on the 30th/31st of every month, brings you the latest information on new market dynamics, company dynamics, new dairy products and consumption trend, new legislations and policies and raw milk supply dynamics that
are shaping the market.
About CCM CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.
For more information, please visit
http://www.cnchemicals.com.
Guangzhou CCM Information Science & Technology Co., Ltd. 17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China Tel: 86-20-37616606 Email: econtact@cnchemicals.com