---
title: "Junlebao Maintains 30% Growth, Poised to Become the Next Dairy Company to Break 10 Billion Yuan After Yili, Mengniu, and Bright"
description: "Despite the dairy industry downturn and struggling upstream milk suppliers, Junlebao has bucked the trend with 30% growth in the first quarter of 2016. The company's lactic acid bacteria beverages, formula milk powder, and yogurt segments are driving its expansion, positioning it to potentially reach 8 billion yuan in sales this year and join the race to 10 billion yuan."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2016-05-31"
language: "en"
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# Junlebao Maintains 30% Growth, Poised to Become the Next Dairy Company to Break 10 Billion Yuan After Yili, Mengniu, and Bright

> Despite the dairy industry downturn and struggling upstream milk suppliers, Junlebao has bucked the trend with 30% growth in the first quarter of 2016. The company's lactic acid bacteria beverages, formula milk powder, and yogurt segments are driving its expansion, positioning it to potentially reach 8 billion yuan in sales this year and join the race to 10 billion yuan.

The dairy industry continues to be in a downturn, with upstream milk source companies struggling to stay afloat and many enterprises seeing declining performance.
But even in a downturn, some companies can resist downward pressure and maintain growth. Besides dairy giant Yili, one such company is Junlebao.
From May 25 to 27, the 11th International Symposium on Lactic Acid Bacteria and Health was held in Shijiazhuang, Hebei. As a rising star in lactic acid bacteria beverages, Junlebao's lactic acid bacteria beverage business has become one of its main growth drivers. Consumer Daily Exposure met with Junlebao executives to learn about the company's continued strong performance.
Junlebao told Consumer Daily Exposure that in the first quarter of this year, its performance grew by about 30%, with all business segments performing well.
It's important to note that the dairy industry is currently facing many difficulties. About 80% of upstream milk source companies are unprofitable or in loss. Due to falling milk prices, raw milk is "oversupplied" and difficult to digest. Many companies may collapse within six months if they don't receive external support.
Relatively speaking, dairy product and milk powder companies are in a better position, but downstream dairy consumption is weakening, with consumption volumes declining compared to previous years. As a result, large and small companies are hesitant to operate at full capacity, instead compressing production and output. This has led to poor performance and declining results for most companies.
It's worth noting that dairy companies are continuously reducing raw milk purchases. A large amount of raw milk cannot be digested and is being sprayed into milk powder. According to the Ministry of Agriculture, dairy companies currently have 500,000 tons of milk powder in inventory. In 2015, China imported 547,000 tons of milk powder, and current domestic inventory has already reached the level of last year's total imports.
**Milk powder is expensive and hard to sell, creating immense pressure.**
Junlebao's continued high growth at this time is truly impressive.
According to information, Shijiazhuang Junlebao Dairy Co., Ltd. was established in 1995. It is the largest dairy processing enterprise in Hebei Province, with 13 production plants in Hebei, Jiangsu, and other places. Its main products include infant formula, yogurt, low-temperature lactic acid bacteria beverages, and pure milk. Its sales network covers the whole country, with main markets in North China, Northeast China, and East China. Its low-temperature yogurt and lactic acid bacteria beverages rank fourth in market share nationwide. In 2015, it achieved sales revenue of 6.3 billion yuan.
In 2015, Junlebao's growth rate exceeded 30%. Few companies maintained growth that year, with dairy giant Yili achieving double-digit growth in both revenue and net profit at over 10%. Junlebao's growth rate at that time could rank among the top three in the industry.
In the first quarter of 2016, the dairy situation continued to deteriorate, and Junlebao's maintenance of such a growth rate is commendable. If more companies could maintain positive growth, the raw milk oversupply crisis could be alleviated.
Based on Junlebao's growth rate of 30%, its 2016 sales could reach around 8 billion yuan. In 2015, Yili had 60.36 billion yuan, Mengniu nearly 50 billion yuan, and Bright less than 20 billion yuan, ranking in the top three. The competition for fourth place is currently fierce.
Companies aiming for 10 billion yuan include Junlebao, Feihe, and New Hope Dairy. Currently, their scales are similar. Feihe is at over 7 billion yuan, and New Hope exceeds 6 billion yuan.
Consumer Daily Exposure learned that three major business segments are driving Junlebao's continued high growth: lactic acid bacteria beverages, formula milk powder, and yogurt.
In the lactic acid bacteria beverage segment, Junlebao currently ranks fourth, behind Mengniu, Yakult, and Wei Chuan. Lactic acid bacteria beverages are the most promising emerging segment in the dairy industry and are relatively healthy. Currently, various companies are positioning themselves in this space, and the competitive landscape is still highly volatile, presenting significant opportunities for Junlebao.
**Junlebao has great ambitions.**
Consumer Daily Exposure exclusively learned that in the first quarter of this year, Junlebao's lactic acid bacteria beverage sales exceeded 1 billion yuan. Among them, "Changqing," endorsed by "national goddess" Zhao Liying, has already achieved sales of several hundred million yuan, growing at a rate of 5-6 times or more. It is no problem for it to exceed 1 billion yuan this year. Junlebao's goal is for "Changqing" to become a super product with 5 billion yuan in sales within five years.
Junlebao's "Junchang" is definitely its current flagship product. As Junlebao moves toward 8 billion yuan in performance, lactic acid bacteria beverages are expected to account for half of that.
Junlebao's specialty is low-temperature yogurt, and it is the pioneer of red date yogurt. Currently, Junlebao's yogurt market share is second only to Mengniu, Yili, and Bright. While Yili's Ambrosial room-temperature yogurt is advancing rapidly, Junlebao's Kefir room-temperature yogurt is also pushing hard, reportedly aiming for 2-3 billion yuan without issue.
Now let's talk about milk powder. Consumer Daily Exposure is familiar with Liu Senmiao, head of Junlebao's milk powder division. At this Shijiazhuang conference, we specifically met to discuss the industry. According to Liu Senmiao's goal, Junlebao's milk powder should exceed 2 billion yuan.
It's worth noting that Junlebao focuses on "130 yuan" high-quality, reasonably priced milk powder, rather than high prices. Last year, it recorded about 700 million yuan. This year, it aims for triple growth, which is both challenging and motivating. It is said that in the first quarter, production capacity was insufficient to meet demand, and milk powder was in short supply. When Liu Senmiao says supply is insufficient, it must be true because he is very straightforward.
Consumer Daily Exposure also heard that Junlebao's milk powder growth in some regions exceeded 3000%. Although these are newly developed areas, it is still quite astonishing.
Junlebao's high growth is due to the strong combat effectiveness of its team, and the management team's willpower is absolutely top-notch. Outsiders might not believe it, but the 50-year-old president, Wei Lihua, brisk-walks 10 kilometers every morning without fail. Executive President Zhong Yan and Vice President Liu Senmiao each insist on walking more than 10,000 steps daily.
Ordinary employees also adhere to the daily 10,000-step goal. Junlebao provides each employee with a wristband and ranks them daily. Those who don't reach 10,000 steps are "punished."
Not long ago, Junlebao organized a 50-kilometer walking competition for employees. Wei Lihua completed the entire course, staying in the leading group; Zhong Yan completed 55 kilometers, and Liu Senmiao completed 37 kilometers.
Wei Lihua's physical condition rivals that of a young man. One of the founders of Consumer Daily Exposure, who is me, only exercises 3-5 kilometers a day, far below President Wei's level.
Wei Lihua also participates in marathons and completes the full distance.
When a company's boss shows such perseverance, and all employees maintain this kind of willpower, the resulting combat effectiveness is indeed formidable.
Source: Consumer Daily Exposure
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