Ice-cream business heats up in summer
( 2003-06-02 11:51) (1)
The ice-cream business in China is hotting up as manufacturers are vigorously promoting new products to grab a major share of the market.
Some new participants are adding to the mix.
The Beijing-based Sanyuan, one of the country's largest dairy producers, said it planned to enter the ice-cream business by co-operating with the Beijing Allied Faxi Food Co, the maker of Bud's brand ice cream.
Guo Weijian, general manager of the Sanyuan Food Co, said: "We have developed more than 100 flavours of ice cream and we will soon release three of them on a trial basis."
He said his company will regard the ice-cream business as a key area.
Guo said he expected sales of Sanyuan-brand ice cream to be worth 150 million yuan (US$18.14 million) next year.
The Shanghai Bright Dairy Co Ltd, a rival of Sanyuan, also entered the business last month.
The dairy giant has invested 130 million yuan (US$15.7 million) in a new company, which it expects to produce its own ice cream by the end of this year.
Industrial insiders said the prosperous future of the ice-cream market is the driving force behind the two dairy giants now both entering the market.
Zhu Nianlin, president of the China Association of the Bakery and Confectionery Industry, said the total ice-cream market in China was worth 23 billion yuan (US$2.78 billion) last year.
The market will grow to 40 billion yuan (US$4.84 billion) in three years, he said.
Zhu said he believed that as living standards improve in China, people will develop bigger appetites for ice cream.
Many investors are considering entering the fast-growing market, he said. Chinese per capita consumption of ice cream is less than 1 litre a year, compared with nearly 23 litres in the United States.
Foreign ice-cream makers have also been working harder to grab a bigger share of the Chinese market.
China has 4,000 ice-cream producers but the Wall's and Nestle brands still have the lion's share of the Chinese market.
The British firm Unilever, which owns the Wall's ice-cream brand, said it will invest 150 million yuan (US$18.14 million) in new product development and brand promotion in China this year.
Wall's now holds 10 per cent of the China ice-cream market. Unilever said it expected its sales in China to increase by 8 per cent this year, compared with a 5 per cent global increase.
The Swiss food giant Nestle said it planned to speed up investment in its Chinese ice-cream operations this year in an effort to outdistance its rivals.
Ken Donaldson, head of Nestle's ice-cream business in China, said: "Our investment this year will be much bigger than last year."
In the face of such tactics, Chinese ice-cream giants are not prepared to be outdone. Yili and Mengniu, two Inner Mongolia-based dairy companies, are the major challengers.
The Yili Group, one of China's largest ice-cream producers, has said it will focus its efforts this year on the high-end ice-cream market.
The company used to apply a low-price strategy to attract customers.
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