Bel Group has acquired a 70% stake in cheese producer Shandong Junjun Cheese Co., including licences and authorizations to operate the Chinese company’s factory.
Based in Northeastern China, Shandong Junjun Cheese was founded in 2017 and has achieved annual growth of more than 100% since 2018. The company produces a large portfolio of cheese, though it is first and foremost a co-manufacturer with financial, industrial and R&D capabilities.
For Bel, which previously had no production facility in the country and all of its products were developed and manufactured abroad, the acquisition of an existing Chinese co-manufacturer ‘makes perfect sense’ as it will allow the Group to fulfil local conditions and accelerate its product’s time-to-market.
“Bel needs to be able to quickly innovate and adapt to market trends and Chinese consumer preferences,” a group spokesperson told DairyReporter. “Thus, allying ourselves with a local player with strong financial, industrial, and R&D capabilities perfectly aligns with our growth strategy. We will work with partners to optimize the use of the portfolio of products and brands offered by both Bel and Junjun on the Chinese market.”
As part of the agreement, Shandong Junjun Cheese will help deploy Bel products in China through local R&D and production facilities. The company’s leadership team is also set to play ‘a critical role’ in the joint venture.
Cécile Béliot, Bel Group CEO, commented: “With the acquisition of a majority stake in Shandong Junjun Cheese, we are pursuing our growth strategy by expanding our product portfolio and strengthening our manufacturing footprint. Our will to accelerate in new territories is at the heart of our growth strategy, as well as our re-balancing around the dairy, fruit, and plant-based segments of healthy snacking.
“We have chosen Shandong Junjun Cheese, a company with huge industrial capabilities and innovation potential. This will enable us to increase our scale on the Chinese market and compete for leadership. We warmly welcome the more than 300 Shandong Junjun Cheese employees to the Bel Group and look forward to successfully developing our position together.”
Zhao Lu, Shandong Junjun Cheese founder, added: “Partnering with Bel immediately appealed to us as a win-win approach, with a culture close to ours and strong synergies. With over 150 years of experience in Cheese, Bel will enable the further development of Shandong Junjun Cheese by strengthening R&D and production capabilities. Meanwhile, our company will help accelerate the deployment of Bel branded products in China through its state-of-the-art R&D and production facilities, supported by a strong team of experts and entrepreneurs.”
An untapped market
Dairy products are not traditionally associated with the Chinese diet, but demand for cheese in the country has been growing in recent years. According to GlobalData research, China’s cheese market is set to expand at an annual rate of more than 8% during 2020-2025, with processed cheese being the fastest-growing segment, and supermarkets - the main distribution channel.
Statista meanwhile has projected that consumption will grow at a pace that would far outstrip supply in 2026, reaching nearly 670,000 metric tons, with Chinese production providing around 322,000 metric tons.
“Cheese is the preferred snacking category of over 50% of Chinese consumers in 2021, with a strong focus on processed cheese,” Bel’s spokesperson explained. “The key to opening the market further rests in our ability to offer innovations adapted to Chinese consumers’ taste and preferences, while exploring yet untapped trends. Therefore, Bel’s strategy focuses on exploring new flavors and formats for all snacking occasions - leveraging both Junjun’s local R&D and innovation capabilities and Bel’s global expertise in offering healthy snacking occasions in a portion format.”