中国牛奶市场分析

GOTMILK?WehaveHOODandChinaneedsitEdwardBatten,GretchenRemien,HarryWalker,KobeLee,YanyuanXu,Betty,WangCaiTrustedBrandTrustedBrand•Forover160yearsHoodhasbeenanameassociatedwithfresh,qualitydairyproductsthattastegreat.•Foundedin1846inCharlestown,MassachusettsbyHarveyPerleyHood•HoodisadairycompanythathasexpandeditsNewEnglandrootsandisnowdistributingalloverthecountry•HoodisoneofAmerica’slargestandmosttrusteddairyoperatorshaving15manufacturingplantsintheUS•Hoodislookingtoexpandtheirmarketsevenmore…interestedinintroducingHoodtotheChinesemarket•In2008therewasamajormilkscandal,involvedmilkandinfantformulaadulteratedwithmelamineresultingin300,000sickchildren,6ofwhichdiedduetomalnutrition•Similarscandal4yearsbefore,watereddownmilkresultedin13infantdeathsfrommalnutrition,and16infantswithkidneystonesfromthepowderedmilk•BeneficialtotheChinesepopulation’shealth,strongbones,addingsomecomponentsthathadbeenmissingfromtheirdiets…protein,calcium,andothernutrientsyourbodyrequirestooperateproperlyWhyMilk?WhyChina?•ThedangersmilkhaspresentwhenproducedinChina…health/foodsafetyviolationsbyChinesecompanies•Chineselackoftrustinthequalityandsafetyoftheirmilk•Largepopulation,largemarket,largedemand•Raisedconcernsaboutthefoodsafetyandpoliticalcorruption•Largemarket,largedemand•MilkscandalisfreshonChineseconsumersminds...GoodtimetointroduceanewtrustedWesternmilkcompetitorintothemarket,morespecificallyanAmericancompany.DataAnalysis•100surveyswerehandedouttostudentsatQingdaoUniversity,localsatvarioussupermarkets,andonlinesurveystothegeneralpublic•Fromthesurveyswehavegathered…thatthemajorityofchina’spopulationdrinksmilkTheyareunsatisfiedwiththequalityofthemilkinChinaTheyareopentonewsuperiormilkbrandsenteringthemarketTheyareveryconcernedwhowheretheremilkcomesfromandwhoproducesit. MarketOverview•DairyconsumptioninChinareached19milliontonsin2011•Expectedtosurpass25millionby2014•ThisgrowthwouldplaceChina’smarketsizeaheadofEuropeandairymarketssuchasFranceandGermany•Worldaverageconsumptionofdairyis270gramsadayandtheAsiaaverageis140grams,Chinaisaveraging42gramsleavingpotentialforexponentialgrowth.MarketOverviewCont.•Milkaccountsfor60%ofdairyconsumptioninChina•Newindustrystandardrecentlymandatedthatonlypasteurizedmilkcanusetheword“freshmilk”onthelabel•Demandlikelytogrowduetoincreaseofdisposableincome,higherawarenessofhealthbenefitsandincreasedavailabilityofrefrigeration.Gov’tBacking•VerydifficulttobegindoingworkinChinawithoutgovernmentbackingandapproval•XinhuanetpostedanarticletalkingaboutChinesePremierLiKeqiangvowstoboostdairyindustry•Lookingtoimprovethequalityofthedairyindustryandregainconsumerconfidenceafterthe2008scandalGov’tBackingCont.•TheNationalDevelopmentandReformCommissionisexpectedtoallocate1billionyuan(162millionU.S.dollars)thisyearforthedevelopmentofnewmilksources,accordingtotheDairyAssociationofChina•ThegovernmentplanstosupportstandardizedfarmingofcowsandencouragemergerstodevelopthedairyindustryinamodernmannerHOODcomingtoCHINA200PurebredHoodDairyCowswillbetransportedfromAmericatoChinaacrossseasoncargoshipstothenbedeliveredtoour3farmlocationsintheNorthEasternregionofChina.SWOTAnalysis•Strengths:TrustedAmericandairyproductthatcarriesmultiplehealthbenefitsandthebackingoftheChinesegovernment•Weaknesses:Lackofknowledgeofhealthbenefits•Opportunities:Amassiveandexpandingmarketandanincreaseindisposableincomefromconsumertoconsumer•Threats:Thecurrentlowlevelofconsumptionanddistrustofdairyproductsduetothe2008milkscandalFACILITIES•HeadquarterslocatedinBeijing•Processingandpackagingfacilitieslocatedamileawayfromthedairyfarms•Variousstructuressuchasmilkingparlor,maternitypens,strawstore,feedstore,milkroom,manurepit,anoffice,barns,sheds,andmachinerySupplies•AverageAmericandairyfarmhas115maturecows•Amaturecowcanproduce7gallonsadaywhichisnearly2,500gallonsayear•Roughly500sqft.oflandrequiredperanimal•AbundantamountoflandoutsideofmajorcitiesandinEasternChina•Withour300purebreddairycowsimported,Hoodwillhave3runningdairyfarmsintheNorthEasternregionsofChinaPackaging•CardboardMilkcartons•PlasticMilkbottlesCurrentmilkSalesinChina*These4companiesareourlargestcompetitorsinChinaPricingStrategiesPenetrationPricing:offeralowinitialpricetogetitoutintothemassmarketrightawaylowersperunitproductioncostsmarketingcostsperunitaregreatlydiminishedAlowinitialpricediscouragescompetitorsfromenteringthemarket*Firmmaywanttomaintaininitialpricetogainprofitlostfromlowintroductorylevel.ORlowerthepricefurther,countingonthenewvolumetogeneratethenecessaryprofit.PriceForeigncompanywithdomesticproductionanddistributionCompetitiveprice:20RMB(slightlylessthensomeoftheotherforeignmilkcompetitorsinChina)TheinformationanddatawehavegatheredhasshowedusweneedtosellinthispricerangetohaveachanceinthemarketwhilebeingcompetitiveandprofitableBREAKEVENAnalysis•Price:20RMB(perliter)•Cost:5RMB•Fixed:1,800,000RMBBreakeven=fixedcosts/(unitsellingprice-variablecostsperunit)=1,800,000/(20–5)=120,000unitsFinancialsItemcows200-499 dollarspercwtsoldGrossvalueofproduction:Milksold19.38Cattle1.4