In July 2015, Bright Dairy acquired high-quality assets and dairy cow breeding businesses of 13 enterprises under Bright Food Group through its subsidiary Holstein Farming.

In early 2016, the Chinese women's national volleyball team signed a strategic partnership with Bright Dairy. During the September volleyball finals, daily sales of Bright's Mosilian increased by 42%, and on the day of the championship, Bright Dairy's stock nearly hit the daily limit.

In September 2016, Bright Dairy launched a new low-temperature premium yogurt product "Zhida".

On October 10, Bright Dairy announced plans to build a new factory and set up a wholly-owned subsidiary in Chaozhou, Guangdong Province, with a total investment of 349 million yuan. The new subsidiary will be named "Yuedong Bright Dairy Products Co., Ltd.".

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Bright Dairy has been striving Three-way split in South China The South China market has always been a "must-win" for dairy companies, and it is also one of Bright Dairy's main battlefields. But maintaining a dominant position in this fiercely competitive market is not easy. Besides dairy giants Mengniu and Yili, Bright also faces challenges from local brands such as Yantang Dairy (29.340, 0.24, 0.82%) and Fengxing Milk. Currently, there is no specific figure for Bright Dairy's market share in South China, but it is an indisputable fact that the region is divided into three parts. One part belongs to Mengniu and Yili, one part to local dairy companies, and the remaining part to Bright and other dairy companies. Despite being called the "third-oldest" in China's dairy industry, there seems to be a considerable gap between Bright and the two giants (Yili and Mengniu): In the first half of 2016, Mengniu's revenue was 27.26 billion yuan, with net profit of 1.077 billion yuan; Yili's revenue was 30.087 billion yuan, with total profit of 3.807 billion yuan; while Bright Dairy's revenue was 10.27 billion yuan, with net profit of 321 million yuan. Dairy Company | Revenue (100 million yuan) | Net Profit (100 million yuan) Yili | 300.87 | 38.07 Mengniu | 272.6 | 10.77 Bright | 102.7 | 2.41 In the first half of this year, the dairy farming business was one of the few business segments that achieved revenue growth. In 2015, Bright Dairy's subsidiary Shanghai Bright Holstein Farming Co., Ltd. (hereinafter referred to as "Holstein Farming") acquired the equity and assets related to the dairy cow breeding business of Shanghai Milk Group and Shanghai Taijie Industrial under Bright Food Group through share acquisition and asset purchase. The dairy industry has always been "those who get the milk source get the world", and integrating dairy farming resources is also part of Bright's "building a full industry chain". Now Bright has made building a full industry chain one of its corporate strategies. Bright's biggest problem has never been the lack of a full industry chain. Building a full industry chain is very difficult. Today, Bright not only faces the impact from Yili and Mengniu, but also has to prevent the squeeze from imported dairy products. For Zhu Hangming, who has been Bright's president for just one year, this is a considerable challenge. The "embarrassment" of the third-oldest dairy company The importance of the South China market to Bright Dairy is self-evident. Although Bright's market in South China is also large, overall, caught between Mengniu, Yili, local dairy companies, and imported dairy products, Bright Dairy is not sailing smoothly in South China. One reason for this is Bright's disadvantage in distribution channels. Industry experts revealed that although Bright is called the "third-oldest" dairy company, in some areas of the Northwest and North China markets, Bright's performance is even worse than some local dairy companies. According to Bright Dairy's plan, the company will stabilize the Central China market in the coming years. During this period, the company's new Central China factory, with an investment of 1.2 billion yuan, will also be put into production in 2017. Even in these key markets, Bright's products mostly appear in KA supermarkets. Compared with Mengniu and Yili, Bright's channels lack depth. Bright Dairy's home base is in East China, especially Shanghai. In the first half of this year, Bright's revenue in the Shanghai market reached 2.622 billion yuan, while revenue in the rest of the country was 6.130 billion yuan. Industry experts revealed that Bright's pasteurized milk once held a 40%-50% market share in East China. But even in its "home base" Shanghai, Bright Dairy faces considerable challenges. First, Bright's advantage is mainly in low-temperature pasteurized milk; in room-temperature milk, the positions of Yili and Mengniu are hard to shake. Second, in East China, especially Shanghai, imported dairy products are numerous and compete with Bright, so Bright still faces considerable challenges in the squeeze. As a result, Bright's performance shows this state: It has many high-margin products, but the company's net sales margin is lower than that of Mengniu and Yili. Integrating pastures: the first step in building a full industry chain Since most of Bright's milk sources come from large-scale factories, the purchase price of raw milk is higher than that of Mengniu and Yili, which is another reason for Bright's lower net sales margin. In July 2015, Bright Dairy acquired high-quality assets and dairy cow breeding businesses of 13 enterprises under Bright Food Group through its subsidiary Holstein Farming. Holstein Farming mainly integrates some pasture resources for Bright, but this acquisition will not have a significant impact on the company because it mainly focuses on East China. In North China and Northeast China, Bright still relies on large-scale pastures. The integration work of Holstein Farming does not seem to be over. In August this year, Bright Dairy announced that Holstein Farming would apply for a one-year loan from a bank, with a total credit limit of 650 million yuan. However, regarding the specific use of the loan, Bright did not respond to reporters from Times Weekly. In fact, integrating pasture resources is part of Bright Dairy's "full industry chain" strategy. Bright Dairy stated on its official website that the company will connect pasture management, dairy processing, cold chain logistics, and brand sales by building a full industry chain. Industry experts believe that building a full industry chain is beneficial for dairy companies. When a company integrates pastures into its supply chain, it can not only reduce product risks but also alleviate cost pressures. Currently, even most of Mengniu and Yili's milk sources come from third-party pastures. Even if a few companies can achieve full industry chain production, such companies are mostly small in scale. Bright's brand concept is "Fresh for Joy", and "freshness" places considerable demands on the company's cold chain logistics. In June 2015, Zhu Hangming, former chairman, president, and party secretary of Haibo Co., Ltd., became the new president of Bright Dairy. Public information shows that Haibo Co., Ltd. is a listed company under Bright Food Group, with two main businesses: "Haibo Taxi" and "Haibo Logistics". In 2014, it began to lay out cold chain logistics business. Low-temperature pasteurized milk is a major trend in the dairy industry today, but it has high requirements for logistics. Zhu Hangming's joining will, to some extent, benefit Bright's layout in cold chain. However, China's cold chain is not yet developed, and the development of cold chain logistics is constrained by urban infrastructure. Bright can proactively develop logistics and cold chain, but for a single company, this is difficult. The challenge of overseas mergers and acquisitions In Bright Dairy's full industry chain plan, New Zealand's Synlait and Israel's Tnuva Group also play a certain role. Bright Dairy acquires shares in these companies directly or indirectly, integrating advantageous resources to bring into China or processing its products overseas. In August this year, Bright Dairy announced that it would provide a guarantee of 65 million US dollars for its wholly-owned subsidiary Bright International, with a guarantee period of one year. It is reported that Bright International's main business is investment holding. In fact, besides Bright Dairy, Mengniu and Yili are also actively conducting overseas mergers and acquisitions. Compared with Mengniu and Yili's revenue-oriented acquisitions, Bright Dairy's overseas mergers and acquisitions are, to some extent, influenced by national strategies, which has also meant that these cross-border mergers and acquisitions have not had a significant positive impact on the company's operating performance. Theoretically, a full industry chain can help dairy companies optimize the industry chain and correspondingly reduce costs and risks. However, achieving full industry chain production is very difficult. Dairy experts believe that Bright's current predicament mainly stems from fierce external market competition. If this "third-oldest" dairy company wants to achieve a breakthrough, it needs to innovate in channels and products, but "this has certain difficulties". Bright needs to adjust its thinking to meet the needs of the new generation of consumers. Recently, Bright hired Wang Kai and Hu Ge as image spokespersons for two of its products, and signed the Chinese women's volleyball team at the beginning of this year. Consumers' purchases are driven not only by functional needs but also by emotional needs. When products in the industry are highly homogeneous, emotional needs may, to some extent, influence consumers' choices. But emotional needs and functional needs are intertwined. "Bright also needs to make certain adjustments to its product line." -END- The best learning platform for FMCG distributors in China Focusing on providing professional, practical, and actionable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brand | 016 Distributor B2B transformation | [Long press QR code to follow]