On 27 July, Taiwan's Uni-President China Holdings Ltd. (Uni-President) used its official WeChat platform to notify customers of a “50% discount for having an early taste” of Westgold UHT - as a result, up to 31 July it was sold for RMB99/250ml*24 cartons instead of RMB199/250ml.

Source: Baidu

The marketing wording tells consumers that the product is imported from New Zealand in original packing - “The cows are grazed and the protein content of the milk is 3.3 g. It is from Westland Co-operative Dairy Company Limited (Westland) on the western coast of New Zealand.” Westland is owned by 425 farmer shareholders and processes about 4% of New Zealand's milk - its role in China has largely been as a supplier of raw materials such as base powder, commodities, lactoferrin etc.

Westland penetrated into Chinese market with its Westgold

In April, Westland confirmed the start-up of its UHT milk/ butter plant in Rolleston, just outside Christchurch, reportedly based on an investment of USD28.6 million (NZD40 million, USD/NZD exchange rate @ 1.3968 on 4 August, sourced on hexun.com) - production capacity was given at 14,000 L/h, and this paved the way for the launch of its products onto the Chinese market in June.

“The plant will enable us to reduce our commodities business which faces great fluctuations and is now facing oversupply. Now we are focusing on manufacturing high added value products for premium market segments and for high profits.” stated Westland’s CEO at that time: “The Chinese middle class is now growing. They are well educated, having considerable disposable incomes and high requirements regarding the quality and safety of dairy products.”

In May the company took the opportunity of Bakery China 2016 (Shanghai, 11-14 May) to launch its “Westgold” brand - this activity focused on the brand only, not specific products, but the indicated focus was on whipped cream, butter and UHT milk. “The brand launch signals that we are making a significant step into the Chinese market,” stated a manager of Westland in China, “....based on our already established image as a raw materials supplier.”

Much of the focus should be on foodservice - our research shows clear demand amongst customers in this channel. In respect of B2C sales, however, its whipped cream is currently only marketed on Taobao.com, by just 6 online stores at a price of about RMB32/1L – the figure for transactions shown within 30 days was only 1! Moreover its butter has yet to appear – apart from an unsalted butter on YHD.com priced at RMB25/250g.

The UHT milk launched by Uni-President lacks really distinctive reasons for consumers to buy it - its protein content is similar to other imported ones, and a claim for grass-fed production based on 5 generations of farming knowhow may not be sufficiently persuasive for consumers. Another concern must be that the online mall on WeChat is a very limited sales platform compared to Taobao.com - it could take a long time to build a consumer following on this medium.

Westgold UHT milk

Source: Uni-President China Holdings Ltd.

Westgold whipped cream

Source: Taobao.com

Westgold unsalted butter

Source: YHD.com

This article comes from Dairy Products China News 1608, CCM

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

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Tag: dairy