General Mills launches Yoplait brand in yogurt-hungry China
French-style yogurt Perle de Lait, a drinkable yogurt with fruit pieces that requires an extra-large straw called O’Fruit, and Panier de Fruits, which will become China’s first fruit on the bottom yogurt, will initially be rolled out across Shanghai.
It then plans to introduce Perle de Lait, O'Fruit and Panier de Fruits city-by-city before offering it nationwide.
Ken Powell, chairman and CEO, General Mills, described the move as "a major milestone" for the company, which acquired its 51% stake in Yoplait from French dairy Sodiaal and private equity firm PAI Partners in 2011.
"We're excited about the prospect for growth across our global yogurt business," said Powell. "Yogurt has become one of the hottest food categories in the world over the past decade."
"We like our positions in key developed markets, and we see plenty of room for future growth as category consumption continues to develop in emerging yogurt markets."
According to Euromonitor, Chinese yogurt sales grew from US$5.38bn to around US$10.25bn between 2010 and 2014 to become the world's largest market for yogurt - ahead of Japan, the US, Brazil and France.
The market is expected to grow to nearly US$18bn by 2019, it says.
"With the tremendous economic growth in China, consumers are increasingly demanding better quality and experience of foods," said Gary Chu, president, General Mills Greater China.
"Chinese consumers like the health benefits of yogurt and we are thrilled to add our world-class Yoplait products to our growing portfolio of brands and products that Chinese consumers have come to love and trust," Chu added.
"Likely to remain a niche player": Euromonitor
China's top five yogurt manufacturers - Mengniu, Bright Food, Hangzhou Wahaha, Yili and Yakult respectively - currently account for 73% of all sales in the country.
As shown by fifth ranking Yakult, however, it is "challenging for global new entrants to build a major presence" in China, says Euromonitor.
"As local manufacturers are rapidly improving their quality reputation against foreign-owned brands and focus on innovations, differentiation strategies are also more difficult to achieve for foreign brands," Raphael Moreau, food analyst, Euromonitor, said in a note.
"In a competitive environment already dominated by local producers, Yoplait could benefit from opting for a co-branding strategy," he said.
"In Japan the brand has developed such an agreement with Meiji under the Gurt brand, available in squeezable pouches for on-the-go consumption targeted children. A similar strategy could also be explored at a later stage by Yoplait in China."
Its chance of success in the country are also likely to increase if Yoplait emphasises the "functional credential" of its products like Japanese dairy Meiji, which launched Meiji Bulgaria probiotic yogurt in China in December 2013.
While it can expect to emulate Meiji's "modest" US$17m 2016 Chinese sales target, Yoplait is "likely to remain a niche player" with its current offerings, Moreau added.
General Mills launches Yoplait
Posted by Kalle Leporanta,