2017 Top 100 Food & Beverage
Companies of China: WH Group Takes the Lead
Author: Mote Chan (Wechat ID: motechanfbif)
Translator： Sandy
Thanks to: Paris Zou, Xiaomin Liu, Haibin Jiang, Shushu Li, Wilbur Zhu, Feifei
Chinese version：2017中国食品饮料百强榜
Introduction
On August 24, 2017 (Beijing
Time), FBIF first released its Top
100 Food & Beverage Companies of China (hereinafter referred to as “FBIF
Top 100”). FBIF Top 100 sorts out the top 100 Chinese local food and beverage companies on the basis of their
sales performance.
Beyond the seas, there is a World Top 100 Food Companies and a Top
100 Food & Beverage Companies in U.S. and Canada annually issued by Food
Engineering and Food Processing respectively. Although domestically various
ranking lists are published by some institutions every now and then, there are
few lists highlighting “sales performance”; some lists are made up only by a
certain index; and some other lists even claim “to rank in a random order”.
People can hardly learn anything of industrial structures from these ranking
lists, not to mention being convinced.
Only by reference to the external world can a company learn about
his own development level and stage. And to better understand Chinese food
industry and its current situation, we also need more transparent figures,
combined with comparison with the global data.
The past “Information Age” put emphasis on quick access to
information. Whoever gets information quicker holds more advantage. However, in
this Big Data Era, we believe that the openness
and sharing of data is more important. Only with more comprehensive
figures, more open and faster circulation channels can information be more
valuable and contributable to the development and progress of the industry.
We release the Top 100 Food & Beverage Companies of China this year for the first time. We admit that there might be some
flaws and much room to play with its totality,
completeness and ranking standards. However, this is our first step and we
believe that our endeavors can motivate your acceptance of “Open Data” and
finally promote the development of food industry. We also hope to accumulate
abundant figures and information concerning Chinese food industry by virtue of
this first ranking list. As time flies, with more comprehensive data, we can
look back into the past more clearly to find the hidden rules and predict the
future more accurately.
Download the FBIF Top 100:
Contents
Part One: Analysis of the Ranking List
Part Two: Comparison with the World Top 100 and the Top
100 of NA
Part Three: Top 100 List
Part Four: Contact Author, About FBIF
Part One: Analysis of the
Ranking List
Top one: WH Group
WH GroupLogo
The top five are WH Group (73.921 bn yuan), Yili (59.172 bn yuan),
Tianyi (55.273 bn yuan), Mengniu (53.433 bn yuan) and Wahaha Group (52.91 bn
yuan). These five companies are also the exclusive companies with total sales
over 50 bn yuan on the list. At present, there is no company with total sales
over 100 bn yuan.
There is no surprise for WH Group leading the list, as according
to the Top 500 Chinese Companies issued by Fortune
magazine on July 31, 2017 at www.fortunechina.com, WH Group held the first position
in food industry with sales of 143 bn yuan (21.534 bn dollars). On our list, the sales of WH Group is 73.921
bn yuan (11.073 bn dollars, 1USD=6.6752CNY), because we only calculate its meat
products (processing food) business and leave out its businesses of fresh pork
and hog raising, just like “the Basis of the List” (explanation as below) says.
Its meat products business has generated
51.4% of its total revenue, while the profit of this part accounting for 82.5%.
In 2013, Shuanghui Group (the former WH Group) purchased American
pork producer Smithfield Foods with 7.1 billion dollars. The deal became the
biggest trade among mainland China companies’ acquisition of American companies
in the year and made the annual turnover of the newly named WH Group soaring to
over 90 billion yuan (the 2016 turnover of Shuanghui was 51.8 billion yuan). WH
Group has become the world’s largest company covering businesses of meat
products, fresh pork and hog raising.
WH Group still continues its globalization steps and expands its
blueprint by buying European and American enterprises in the way. Nowadays,
with Smithfield Foods, WH Group has become an international company whose
overseas performance outruns its domestic performance. In its 2016 annual
report, it said, “In 2016, businesses in China generated 36% of the Group’s
gross turnover, while the turnover of American businesses accounted for 57.4%”.
Yili and Mengniu grow
solidly, while Tingyi and Wahaha fall from their peak
During the past four years (since 2013), only Yili Group and
Mengniu Diary grew relatively solidly. Yili Group has improved its (overall)
performance from 47.8 billion yuan in 2013 to today’s 60.6 billion yuan and
Mengniu from 43.36 billion yuan to 53.78 billion yuan.
Wahaha and Tingyi underwent a drop from their peak in 2013,
though. The total performance of Wahaha has fallen from its summit of 78.3
billion yuan in 2013 to today’s 52.91 billion yuan, and Tingyi from 66.77
billion yuan to 55.878 billion yuan.
From the above tendency chart, we can see that the growth rate of
Yili and Mengniu slowed down while Tingyi and Wahaha fell from their peak and
haven’t climbed to its 2013 summit. The author will analyze the reasons of
these adverse situations by comparison with global companies later in this
paper.
The largest food group of China
Among the 2016 Top 500 Companies of China issued by China
Enterprise Confederation and China Enterprise Directors Association on September
1, 2016, we select out some enterprise groups that are closely related to food
and beverage and conduct a study by contrast. These groups include China
Resources, COFCO Group, Bright Food and Beidahuang Group.
China Resources Group
There are three companies engaged in consumer products under the
control of China Resources Group. Below is their sales performance of
processing food:
CR Beer: 28.694 billion yuan
CR C’estbon Beverage: 9.347 billion yuan
CR Ng Fung: 1.212 billion yuan (as an outstanding assorted food
products enterprise, its turnover reached 10.653 billion yuan in 2016.)
Apart from that, although CR Pharmaceutical owns 28.14% shares of
Shandong Dongeejiao, we don’t count this part of revenue due to the lower
shareholding ratio. Therefore, the total sales of China Resources processing
food business is 39.253 billion yuan.
COFOC Group
COFCO Logo
“There are 11 listed
companies under COFCO Group as its controlled companies through investment”,
cited from COFCO 2016 Social Responsibility Report. On this basis we sort out
the companies related to food industry and list their sales performance as
below:
Mengniu Dairy: 53.433 billion yuan (a finalist in the Top 100)
China Foods: 23.645 billion yuan (a finalist in the Top 100)
COFCO Tunhe: 16.4 billion yuan (a finalist in the Top 100)
COFCO Meat: 0.949 billion yuan ( sales of meat products, its total
sales are 6.616 billion yuan)
Jiugui Liquor: 0.65 billion yuan
COFCO Biochemical: 0.545 billion yuan ( sales of cooking oils and
by-products, its total sales are 5.6 billion yuan)
China Tea: unlisted, with data unpublished
Companies
under the control of Mengniu include:
Modern Farming: 4.862 billion yuan (a finalist in the Top 100, as
of March 21, 2017, Mengniu holds 61.3% of its shares)
Junlebao Dairy: 8 billion yuan (a finalist in the Top 100, with
50.99% shares held by Mengniu)
As sales performance data of Yashily and Dumex are contained in
Mengniu’s annual report, we don’t calculate them alone.
Furthermore, it has been reported recently
that “CPMC (a packaging company belongs to COFCO) plans to buy 30% shares from
Qingyuan Jiaduobao”. But how much revenues Jiaduobao can contribute to CPMC is
still unclear.From the above we can calculate that the total sales of processing food which COFCO holds in a direct or indirect way wouldn’t be less than 108.484 billion yuan.
Bright Group
Listed companies under the control of Bright
Group include:Bright Dairy: 17.817 billion yuan (a finalist in the Top 100)
Shanghai Maling Aquarius: 3 billion
yuan (a finalist in the Top 100)
Shanghai Jinfeng Wine: 2.125 billion
yuan (a finalist in the Top 100)
Its total sales of processing food are
22.942 billion yuan.
Beidahuang Agriculture
Jiusan Oils & Grains: 41.047 billion yuan
(a finalist in the Top 100)Wondersun: 4.5 billion yuan (a finalist in the Top 100, calculated based on 2015 sales)
Its total sales of processing food are 45.547 billion yuan.
1.
The above “total sales of processing food” only contain
published sales of “controlled enterprises”. The figures are for your reference
only.
2.
As subsidiaries of some group companies are listed companies and
operate their businesses independently, we calculate each subsidiary separately
and leave out the group companies. The follow-up analysis in the article will
also not refer to the operation of these group companies.
Based on the above contrasts, we can figure
out that COFCO Group is the largest food
group in China from the aspects
of controlled enterprises and total sales. If we consider the total processing food sales of COFCO when
listing the ranking list, COFCO would undoubtedly rank the Top one.
The most profitable company, the threshold, the
average sales revenue and the 10 billion yuan companies
The Most Profitable Company
Kweichow Moutai Liquor
Image Source: www.dfic.cn
The Threshold
Hebei Hengshui Laobaigan Liquor is the last
finalist in the Top 100, with total sales of 2.065 billion yuan. Therefore,
2.065 billion yuan is the threshold to be listed. According to the statistics
for over 400 companies, more than 80 companies have total sales of 1~2.065
billion yuan and most of them are listed companies. As our data may be limited,
we believed that there are much more companies whose sales run higher than this
figure, such as Lee Kum Kee and Infinitus.
The 10 Billion Yuan Companies
The average sales of FBIF Top 100 companies
are 10.795 billion yuan. It’s not a daydream out of reach for domestic food
companies to obtain sales over 10 billion yuan. According to the list, there
are more than 26 companies with sales
equal to or exceeding 10 billion yuan, 16
companies with sales over 20 billion yuan and 5 companies over 50 billion yuan.
Companies established
after 2000 and 2010: an emerging power that cannot be neglected
Three Squirrels Logo
Because of lack of ranking information in past years, we could not make a comprehensive comparison for tendency of companies’ ranking. However, from the perspective of the establishment year and growth rate, we can learn that some companies rise rapidly during a short period.
In the list, 16 companies were established after 2000 and only a company established after 2010. The only company is Three Squirrels which was established in 2012.
By leveraging e-commerce, after five years’ growth, Three Squirrels obtained total sales of 4.423 billion yuan in 2016, and ranked 60th in the list. Its growth rate doubles almost every year.
There are other companies that were founded after 2000 and grow fast, including Juewei Food (Rank 73th), Zhou Hei Ya (Ranked 84th), Bestore (Ranked 40th), XIANGPIAOPIAO Food (Ranked 93th), Ausnutria Dairy (Ranked 88th), Shanghai Laiyifen (Ranked 75th), etc.
Ausnutria Dairy: compared with 2015, its sales in 2016 have grown 30.3%.
Zhou Hei Ya: compared with the same period of 2015, its sales in 2016 have grown 15.8%.
Juewei Food: its revenue in 2016 reached 3.274 billion yuan, with year-on-year growth of 12.08.
XIANGPIAOPIAO Food: compared with 2015, its sales in 2016 have grown 18.32%.
…
With the rapid development of economy and in a Chinese market that is pushed forward by internet, e-commerce and new retail, we are totally convinced that there would be great change for each year’s FBIF Top 100.
The province with the largest food sales in China
Notes:
As we didn’t collect sales figures of foreign companies which are located
mainly in Shanghai, Beijing and Guangzhou province, therefore, the conclusion
of analysis will focus on domestic companies.
Taking consideration of
GDP and population these two factors, it’s not hard to guess the province with
the largest food sales. The top three economic provinces in 2016 are Guangdong,
Jiangsu and Shandong, and the top three provinces with a large population are
Guangdong, Shandong and Henan.
The number of companies
in each province and its summed sales are also in keeping with the province’s
economic development level and population. Guangdong province and Shandong
province tie for the first place as each has ten companies entering the Top 100
list. However, with total sales of 120.071 billion yuan, Shandong province
outpaces Guangdong province whose total sales are 81.106 billion yuan.
Therefore, we can say that Shandong is
the province of the largest food sales.
Part Two: Comparison with the World’s Top
100 and the North American Top 100
Notes:
1. Below are the analyses of FBIF Top 100 by contrast with The World’s Top 100 Food and Beverage Companies of 2016: Transformation of a New World (sales of 2015) (hereinafter referred to as the World’s Top
100) and The North American Top 100 Food and Beverage Companies of 2017(sales of 2016) (hereinafter referred to as the North American
Top 100). The selection scope of the world’s Top 100 and the North American Top
100 did not cover all the companies in the world. For example, there are only
four Chinese companies (including Smithfield Foods bought by Shuanghui Group)
in the World’s Top 100. As the sales of the last finalist in the World’s Top
100 is “3.72 billion dollars” (about 24.675 billion yuan), 11 Chinese companies
listed in the FBIF Top 100 could be qualified to enter the World’s Top 100
ranking list.
2. The definition of “food manufacturing industry” varies in World’s
Top 100, the North American Top 100 and the FBIF Top 100. For example, the
World’s Top 100 lists out sales performance of livestock and poultry
slaughtering, while the North American Top 100 contains sales of pet food.
3. The North American Top 100 presents companies’ sales only in
North America, including overseas companies (e.g. Nestle). While the FBIF Top
100 demonstrates China’s companies’ sales all over the world.
4. Based on the above factors and with exchange rates on August 13,
2017, there might be some errors of compared figures.
By contrast with figures on the
World’s Top 100 and the North American Top 100, we can find that certain gaps
exist in terms of sales volume and company quantity. Below is a brief analysis
of the shortage that Chinese companies have and the transformation directions
they might need steering for.
Large gap in terms of
volume and quantity
Gaps from the aspect of sales
volume
For overall sales, the total sales of companies in the World’s Top 100 and North American Top 100 are 1275.875 and 483.583 billion dollars, while those of companies in the FBIF Top 100 are 161.711 billion dollars, which is only one third of North American sales.
There are 83 American companies in the North American Top 100. If we compare the top 83 Chinese companies with the top 83 American companies, we’ll find that the total sales of American companies are still almost 2.5 times higher than those of Chinese companies.
As the largest Chinese food company, WH Group’s food sales are 11.074 billion dollars and its overall sales are 21.534 billion dollars which can only rank the 17th in the World’s Top 100 (without regard to deviation caused by the exchange rate).
Nestle, as the world’s top one in 2015, has sales of 79.4 billion dollars, and PepsiCo ranking the second has sales of 63 billion dollars (among which 39.4 billion dollars generated in North America). In the view of sales volume, Nestle is 3.7 times and PepsiCo almost 3 times higher than WH Group.
Gaps in quantity
Among the World’s Top 100, there are 8
companies whose sales surpass those of WH Group (21.534 billion dollars). These
companies are PepsiCo, Coca-Cola, Tyson Foods, Archer Daniels Midland Company,
Mars, Mondelez International, Cargill, and Kraft Heinz Company.As the above illustrated, there could be 11 Chinese companies entering the list of the World’s Top 100. Then how many finalists are there in other countries? As the second largest economy, does China have a matching position in the World’s Top 100?
From the above chart, we can learn that 11
Chinese companies’ total sales are even lower than those of countries like
America, Japan, France, Holland and Switzerland. There is only Germany that we
surpass in terms of the average sales.
What on earth are the reasons that cause such great gaps between
Chinese companies and global companies?
Reason analysis for gaps
between Chinese companies and global companies
If we go deeply into the matter, we know it
has much to do with the development stage of Chinese economy. It is only for
less than 40 years since the late of 1970s that China Mainland has started
developing its economy in a real sense. However, China’s recent GDP relies on
its population to a great extent, and its low GDP per capita also displays a
low economic development level. According to the list of countries by GDP per
capita issued by International Monetary Fund (IMF), China only ranks at the
71th in the medium range.This article will make a superficial analysis on basis of statistics. The comparison of companies by their establishment histories only represents personal opinions and only for your reference.
I. Historical Accumulation
We think the first reason would be the
shortage of historical accumulation. The Chinese companies are too young with
too short development period, while the companies in the World’s Top 100 have a
very long history.
The young Chinese companies
According to our statistics for the FBIF Top
100, there are 28 state-owned companies, with total sales of 428.307 billion
yuan, accounting for 39.68% of the Top 100’s sales. The state-owned companies,
as they were, are towers of strength in the FBIF Top 100.We learn that most of state-owned companies performed the joint-stock system reform in 1980s and 1990s, which means that the periods of their market-oriented operation are very short, and it is only for about 20 years that they have operated businesses in a modern way.
For example, to retrospect the history of Yili Group, we can trace back to “Hohhot Cow-raising Cooperative Group in the Huis (呼和浩特回民区养牛合作小组)” founded in 1956. It was until in 1993 that the group restructured its enterprise system and established Yili Group. From then on, Yili started its development of modernization.
Furthermore, the establishment of private companies are also late. For example, Wahaha was founded in 1987 and Luhua in 1986.
The “Foreign-Owed” in the above chart refers
to Hong Kong, Macao and Taiwan companies. Obviously, with average establishment
year of 1958, these companies were founded much earlier than state-owned
companies and private companies. In terms of sales performance, these companies
occupy 10.97% of the total sales with less than 9% companies in the FBIF Top
100. Companies like the famous Tingyi, Uni-President and Want Want China are
all Taiwan companies.
The long history of global
companies
The Chinese companies are relatively young.
Then how old are the global and North American companies?
The top three companies in the World’s Top 100, such as Nestle (founded in 1866), PepsiCo (founded in 1898) and Coco-Cola (founded in 1886) are well known century-old enterprises.
It has much to do between development histories and recent gaps of Chinese, North American and global companies. Nowadays, China enjoys a rapid economic growth and its food companies also stride forward with big steps. We believe that as time goes by, Chinese companies will achieve much more progress with great opportunities.
II. Brand Strategy: numerous billion-dollar brands in the World’s
Top 100
Except from historical accumulation, brand
strategy is the second most important factor.It was reported by Fortune in 2010 that Nestle had 28 billion-dollar brands, such as Nespresso, Nescafe, KitKat and Maggi, etc. According to Coca-Cola’s official website, up to February 24, 2017, Coca-Cola Company has 21 billion-dollar brands, such as Coca Cola, Fanta, Sprite, Minute Maid, etc. PepsiCo also displays its 22 billion-dollar brands on its website, these brands including Pepsi, Gatorade, Lay’s, Tropicana and Quaker and so on.
Due to limited authoritative information, we make a rough chart of leading companies with the number of their current and previous billion-dollar brands.
However, few Chinese Local companies have several great powerful brands. It presents an idea that only with several billion-dollar brands can a company ascend to the world’s top 100.
Multi-brand strategy basing on Cross Category is
essential
Coca Cola Custom Glass. On the
Best Global Brands 2016 Rankings issued by Interbrand, Coca-Cola Company ranks
the 3rd and is the top one in consumption category.
Image source: buy.shareacoke.com
Companies in the World’s Top 100 usually have couples or even dozens of brands across different categories and these brands are solid leaders in their categories. For example, Coca Cola and Pepsi govern the “coke”; Lay’s dominates chips and Nescafe leads coffee.
It goes quite differently in China, however. An obvious characteristic of Chinese companies is that a brand covers several categories. One brand extends to several or even dozens of kinds of products, and never thinking about abandoning usage of their companies’ logo. They may occupy the most important position in one category, but few of them can take up another market with the same weight. Because the fact is that a single brand is difficult to lead several categories.
Certainly, the multi-brand strategy is only appropriate for companies that have grown to a certain stage. We suggest that in the preliminary stage, a company shall focus their limited resources on one brand until the brand becomes leading brand in the related category. Before that, it’s not suitable for the company to perform the multi-brand strategy.
III. Globalization
Another factor that helps companies in the
World’s Top 100 to grow continuously is the globalization strategy.
Globalization
in the World’s Top 100
Nestle Logo
A distinguishing feature of the global and
North American leading companies is the high level of globalization. For
example, up to 2016, Nestle has sold
its products to 191 countries and employed 328,000 employees worldwide.
Sales by Nestle’s main markets are shown in its Annual Review 2016. We select out and compare Greater China Region, United States and Switzerland altogether. The sales of Greater China Region reach up to 45 billion yuan, accounting for 7.3% of total sales.
We can also find that as a Swiss company, Nestle’s sales in Switzerland only take up 1.65% which is very little. Its biggest market lies in the United States, which contributes 29.84%. Therefore, it is evaluated by some people that Nestle is the most globalized company.
Another globalized company is AB InBev with over 200,000 employees in the 50 countries. Its sales in 2016 were 45.517 billion dollars among which 15.698 billion dollars were generated in the United States, only accounting for 34.49% (AB InBev 2016 annual report).
Still another globalized company is PepsiCo. According to its 2016 Annual Report: PepsiCo as a global corporation with a presence in more than 200 countries and territories around the world—more than the membership of the United Nations. Its overseas sales amount for 42% with 24% operating profit margins.
Above is the globalization of the top five companies in the World’s Top 100. Let’s see a company with a lower rank. Kellogg Company ranks at the 27th in the list. According to its 2016 annual report, up to February 21, 2017, it has produced its main products in 21 countries and sold them in over 180 countries. Its markets outside America contribute 31.30% sales.
In conclusion, we can find that the majority of the leading companies in the World’s Top 100 operate their businesses worldwide (in over 50 countries) and their overseas sales account for 1/3 or even more.
For the past decades, these international companies almost all have fully enjoyed great dividends brought by globalization, especially the opportunities in the emerging markets.
Globalization of Chinese Food Companies
“A global company shall refer to a
company who integrates various resources worldwide, invests and constructs
subsidiaries in the world’s most suitable places and provides products and
services to the global markets” said an article “How to Become a Real ‘Global’ Companies(如何才能成为真正的“全球化”企业？
)” from Harvard Business Review. The article also mentioned,
“Experts from Willis Towers Watson believed in five different stages for
companies to accomplish globalization, i.e. Export, Initial Expansion,
International, Multinational and Global.”According to its standards and combined with the above illustrated world’s leading companies (with over 50 countries markets), we can hardly find the qualified “global companies” in the FBIF Top 100. These main food companies either walk on the stage of Initial Expansion, or enter the stage of International.
A company on the stage of International usually focus on local places for procurement, marketing and selling, with sometimes carrying out overseas merger and acquisition. The company organizes its businesses by geographic areas and increases coordination between subsidiaries. In terms of its organization structure, the head office brings a differentiated management for different scales of its overseas companies. Often, a subsidiary with a larger scale can be upgraded directly to a business division and managed directly by the head office. And the smaller overseas companies are still under the control of the international company. (“How to Become a Real ‘Global’ Companies”)
Through our comparison, we think WH Group, Ausnutria Dairy and Xiwang Foods are in much conformity with standards of International. (Remarks: The Hong Kong company Lee Kum Kee is also a company of International characteristics as it has plants in America and sells products to over 100 countries. However, as the company declined to provide any business volume figures, herewith, we didn’t count the company in FBIF Top 100 nor analyze it in this article.)
WH
Group
Just as its 2016 annual report illustrated,
“our operation in China contributed 36.5%. Contribution of our operation in the
U.S. to the turnover (…) of the Group in 2016 was 57.4%.”It was reported by Reuters in 2017 that “Smithfield Foods completed its acquisition of several meat processing plants and pig slaughtering houses to expand its European business.” In the future, WH Group will be more international.
Ausnutria Dairy
Operating Segment Information
Source: Ausnutria 2017 Interim Report
According to Ausnutria 2016 annual report, its total annual revenues were 2.74 billion yuan, with domestic sales 1.819 billion yuan, accounting for 66.4%, and overseas sales 0.92 billion yuan, contributing 33.6%. There were over 30 countries that had business relationships with the company based on its “Ausnutria Business Landscape and Sales Network”. We can also learn that its domestic and overseas sales both grow at a high rate from its recently-released 2017 Interim Report.
Xiwang Foodstuffs
In 2016, Xiwang Foodstuffs acquired Canada’s Kerr
Investment Holding Corp whose main business lied in sports nutrition
and weight management food with 0.73 billion dollars. As National Business
Daily reported, “For Xiwang Foodstuffs whose total assets are only 2.218
billion yuan, the act can be as perilous as a snake eats an elephant.”Of course, the payback is huge. After the acquisition, in 2016, “operation revenue reached to 3.375 billion yuan, with year-on-year growth of 50.43%.”
In Xiwang Foodstuff 2017 Interim Report, it reads, “In the first half year, our gross revenue reached 2.881 billion yuan, with year-on-year growth of 145.66%; and net margins for the parent company owners are 0.141 billion yuan, increasing 48.62% compared with the same period of the last year.”
According to its interim report in 2017, its overseas sales has reached up to 1.695 billion yuan, contributing 58.8% of the total sales. Therefore, it is predicted that Xiwang Foodstuff will experience a great leap of sales and profits throughout the year of 2017.
Expectation for Globalization
We will see whether WH Group, Ausnutria Dairy and
Xiwang Foodstuff can continue their expansion in the world and push their
globalization courses much forwards in their future development.To sum up the current globalization road of Chinese companies, we can see that Chinese food companies haven’t make the most of the wide overseas markets, though they really made great endeavors on it.
With China, the world’s largest emerging market with infinite growth potential at their back, Chinese food companies will embrace a much more brilliant future provided if they can benefit from the globalization.
The Transformation Road for Chinese Food Companies
In Part One, by contrast on a tendency chart,
we find that revenues of Yili and Mengniu maintain a solid growth with a lower
rate, while those of Tingyi and Wahaha fall from their peak. Here we find
partial reasons for these adverse situations: with comparison to the world’s
top 100 food companies, we not only find the gaps between Chinese and foreign
companies, but also find partial reasons of these gaps. In March, 2017, we tried to analyze on the sales decrease of traditional giants and find that it is generally due to the gradual rise of new categories and new companies which encroach upon the previous markets that traditional giants occupied.
A company who wants to increase its sales mainly rely on two methods: a.to initiate or cling to a new category to obtain new development momentum; b. to maintain growth through creating new channels (such as, e-commerce, new retail, and globalization).
Here we summarize the reasons of Chinese food companies’ rise by
these two methods (only parts of companies cited):
Notes: please refer to the book
about Three Squirrels (Chinese Name: 松鼠老爹与三只松鼠：互联网品牌IP化、人格化运营之路, 鼠念念著）written by Niannian Shu to better understand new channels.
When we look back at some traditional giants, we find that a
single brand covers too many categories. According to positioning theory, these
companies attempt to extend the brand once getting into the consumer’s mind to
much more categories and even totally irrelevant categories. However,
from the consumers’ points of view, the positioning of the brand
will be bound to be weakened by its outstretched products. Besides,
single-brand strategy brings close ties between products of different
categories, which may be a foreshadowing of future risks.
In conclusion, we put forwards the following
suggestions for companies targeting on a slow sales growth or decreasing sales:
I. Multi-Brand
Strategy
Based on solving customers’ pain points or
satisfying their demands, companies shall use a new brand to create a new
category. Giants with greater strength shall perform the multi-brand strategy
based on cross category even quicker.
II. Globalization
The overseas markets are definitely the new
channels for companies. Overseas merger and acquisition or exportation is a
good idea for companies to make fully use of the global resources.
Here ends the harangue. Below is the FBIF Top 100 list.
Part Three: FBIF Top 100 List
* Sales
in 2016
* Unit:
in CNY 100 million
Notes: 1. “E” refers to estimated sales. “E 15” refers to the estimated sales in 2015.
2. Food sales only, 100 Million Yuan
Rank
|
Company
|
Listing
|
Total Sales
|
1
|
WH Group
|
Y
|
739.21
|
2
|
Yili Group
|
Y
|
591.72
|
3
|
Tingyi (Cayman
Islands) Holding Corporation
|
Y
|
552.73
|
4
|
China Mengniu Dairy
|
Y
|
534.33
|
5
|
Hangzhou Wahaha
Group
|
N
|
529.10
|
6
|
Jiusan Oils &
Grains Industries Group
|
N
|
410.47
(2015) |
7
|
Kweichow Moutai
|
Y
|
388.41
|
8
|
JDB Group
|
N
|
295.00
|
9
|
Shandong Jinluo
Group
|
N
|
294.40
|
10
|
China Resources Beer
(Holdings) Company Limited
|
Y
|
286.94
|
11
|
Tsingtao Brewery
|
Y
|
258.18
|
12
|
China Foods
|
Y
|
236.45
|
13
|
Luhua Group
|
N
|
232.30
|
14
|
Wuliangye Yibin
|
Y
|
227.04
|
15
|
Uni-President
Enterprises Corporation
|
Y
|
204.00
|
16
|
Hopefull Grain
& Oil Group
|
N
|
201.64
|
17
|
Want Want China
Holdings
|
Y
|
197.10
|
18
|
Bright Dairy &
Food
|
Y
|
178.17
|
19
|
Dali Group
|
Y
|
174.10
|
20
|
Jiangsu Yanghe
Distillery
|
Y
|
167.83
|
21
|
COFCO TUNHE SUGAR
|
Y
|
164.00
|
22
|
LINGYUNHAI SUGAR
INDUSTRY GROUP
|
N
|
163.60
|
23
|
Nongfu Spring
|
N
|
150.00
|
24
|
Foshan Haitian
Flavoring & Food
|
Y
|
120.68
|
25
|
Beijing Yanjing
Brewery
|
Y
|
109.85
|
26
|
Jinmailang Mianpin
|
N
|
100
(E) |
27
|
China Resources
C’estbon Beverage (China)
|
N
|
93.47
|
28
|
Jing Brand
|
N
|
92.15
|
29
|
Guangdong Strong
Group
|
N
|
85.00
|
30
|
Sichuan Langjiu
Group
|
N
|
85
(2015) |
31
|
Luzhou Laojiao
|
Y
|
80.74
|
32
|
Shijiazhuang
Junlebao Dairy
|
N
|
80.00
|
33
|
Guangzhou
Baiyunshan Pharmaceutical Holdings Company Limited
|
Y
|
77.69
|
34
|
Hubei Aoxing Oil
and Grains Industries
|
N
|
76.22
(2015) |
35
|
Hebei Yangyuan
Zhihui Beverage Co
|
N
|
74
(E) |
36
|
JNC Group
|
N
|
70.12
(2015) |
37
|
FUWA GROUP
|
N
|
70
(E 15)
|
38
|
Heilongjiang Feihe
Dairy
|
N
|
68.00
|
39
|
FUFENG GROUP
|
Y
|
64.43
|
40
|
Bestore
|
N
|
60.00
|
41
|
Standard Foods
Corporation
|
Y
|
59.67
|
42
|
GUJING GROUP
|
Y
|
58.76
|
43
|
Synear Food
|
N
|
58.37
(2015) |
44
|
Fujian Panpan Food
Group
|
N
|
58.00
|
45
|
China Huiyuan Juice
Group
|
Y
|
57.41
|
46
|
Sanyuan Foods
|
Y
|
56.00
|
47
|
China Resuorces
Dongeejiao
|
Y
|
53.71
|
48
|
Sichuan Bluesword
Beverage Group
|
N
|
53.00
|
49
|
Beijing Shunxin
Agriculture
|
Y
|
52.70
|
50
|
Tenwow Group
|
Y
|
52.18
|
51
|
New Hope Group
|
N
|
50.00
|
52
|
China Modern Dairy
Holdings
|
Y
|
48.62
|
53
|
Sanquan Food
|
Y
|
47.68
|
54
|
MeiHua Holdings
Group
|
Y
|
47.40
|
55
|
Changyu
|
Y
|
47.18
|
56
|
Vitasoy
|
Y
|
46.00
|
57
|
Laoganma
|
N
|
45.49
|
58
|
Wondersun
|
N
|
45
(E 15) |
59
|
Three Squirrels
|
N
|
44.23
|
60
|
Shanxi Xinghuacun
Fen Wine Factory
|
Y
|
43.57
|
61
|
Baiyunbian
|
N
|
43.54
|
62
|
Coconut Palm Group
|
N
|
40.21
|
63
|
Baixiang Food
|
N
|
36.38
(2015) |
64
|
Wei Chuan Foods
|
Y
|
35.45
|
65
|
Lam Soon (Hong
Kong) Limited
|
Y
|
35.13
|
66
|
Chacha Food Company
|
Y
|
35.13
|
67
|
China Shengmu
Organic Milk
|
Y
|
34.67
|
68
|
China Huishan Dairy
Holdings Company
|
Y
|
34.66
|
69
|
Guangzhou Zhujiang
Brewery
|
Y
|
34.25
|
70
|
XIWANG FOOD
|
Y
|
33.75
|
71
|
XIFENG GROUP
|
N
|
33.50
|
72
|
Toly Bread
|
Y
|
33.05
|
73
|
Juewei Food
|
Y
|
32.74
|
74
|
Nanning Sugar
Industry
|
Y
|
32.65
|
75
|
Shanghai Laiyifen
|
Y
|
31.81
|
76
|
V V Food &
Beverage
|
Y
|
31.28
|
77
|
Namchow Group
|
Y
|
31.25
|
78
|
Jinmailang Beverage
|
N
|
30
(E) |
79
|
Shanghai Maling
Aquarius
|
Y
|
30.00
|
80
|
EASTROC BEVERAGE
|
N
|
30
(E) |
81
|
Fujian Anjoy Foods
|
Y
|
29.97
|
82
|
Jonjee Hi-tech
|
Y
|
28.95
|
83
|
Changshouhua Food
|
Y
|
28.79
|
84
|
Zhou Hei Ya
|
Y
|
28.16
|
85
|
Anhui Yingjia
Distillery
|
Y
|
27.98
|
86
|
Anhui Kouzi
Distillery
|
Y
|
27.81
|
87
|
Beingmate
|
Y
|
27.64
|
88
|
Ausnutria Dairy
|
Y
|
27.40
|
89
|
Jiangsu King's Luck
Brewery
|
Y
|
25.27
|
90
|
He Bei Cheng De
LoLo
|
Y
|
25.17
|
91
|
Dao Xiang Cun
|
N
|
25.00
|
92
|
Synutra
International
|
Y
|
24.37
|
93
|
XIANGPIAOPIAO Food
|
N
|
23.89
|
94
|
Zhanjiang Guolian
Aquatic Products
|
Y
|
23.04
|
95
|
BY-HEALTH
|
Y
|
22.98
|
96
|
Daohuaxiang Group
|
N
|
22.9
|
97
|
Dachan Great Wall
Group
|
Y
|
22.42
|
98
|
Zhejiang Yiming
Food
|
N
|
22.4
|
99
|
ShangHai JinFeng
Wine Company
|
Y
|
21.25
|
100
|
Hebei Hengshui
Laobaigan Liquor
|
Y
|
20.65
|
Basis of the List
The following information is for your better understanding of the
basis of this List and its information source.
Food Manufacturing Industry
1. We only collect sales data of companies falling into the food
manufacturing industry. (Most of product categories are quoted from Classified Catalog for Food Production
Licenses issued by China Food and Drug Administration with some categories
discarded, such as grain processing, starch and derived products, food
additives and other food, and some added, such as cooking oil and sugaring.)
2. Based on above principles, as listed companies have
more transparent information, we only collect information related to food.
Where there is stated "Others" in their income composition, we take
no account of. Therefore, we list a "Listing" column for better
understanding. For unlisted enterprises whose major businesses concern food and
beverage, as it is difficult to distinguish their income composition, we regard
their overall performance as food processing performance. For those unlisted
enterprises whose major businesses contain non-food business which accounts for
over one forth (subjective judgment), we leave them out.
Enterprise Territorial Scope
1. Only Chinese companies (including Hong Kong and Taiwan
companies) are considered when we scheme out this Top 100 Food and Beverage
Companies of China.
2. As information is limited, so there is no foreign companies
(except companies from Hong Kong, Macao and Taiwan) and companies acquired by
foreign companies. We welcome any related figures.
3. The statistic scope of performance covers performance in the
whole world, not limited in China.
4. To ensure comprehensiveness of this List, we have researched
over 400 companies, including
a) Listed companies related with food, Alcoholic drink,
agriculture and medicine from China Mainland, Hong Kong and Taiwan
b) Lists of top 100 companies or light industry companies in each
province and some big cities
c) Top 10~20 companies of each subdivision category
Data Source
1. We obtain most of companies' sales from
their annual reports and data published
by authoritative institutions, with only a few data provided by the company
directly or our estimation based on open information. To be fair, open and
transparent, we give notes on each data source and welcome any correction.
Please refer to the "Source" column of this List in Excel version.2. For listed companies like COFCO Group and Bright Group, we calculate sales figures of their member enterprises separately to avoid needless duplication and for information accuracy. And for other listed companies, such as WH Group whose annual report contains Shuanghui Group and Smithfield Foods, we see all the members as a whole.
3. The estimated sales are based on data provided by companies, mainstream media and other reliable source and according to that, it should be estimated sales in 2015. Companies with only sales available before 2015 are not listed in.
4. For companies without open data, or refusing to provide data, or we have no channels to access to confirm their sales, all these companies are not listed.
5. Considering the limited information we have, or other inevitable mistakes, we accept comments and corrections from our peers.
6. Finally, we hope everyone can provide figures positively to make the list more complete in the future.
Monetary Unit & Exchange Rate
1. All the above figures are measured in RMB per 100 million.
2. Without special declaration, the relevant currency can be calculated by the exchange rate on August 13, 2017.
| USD Vs. CNY
|
1 USD=6.6752CNY |
| HKD Vs. CNY |
1 HKD=0.8536CNY |
| TWD Vs. CNY |
1TWD=0.2204 CNY |
Mote Chan (Wechat ID: motechenfbif)
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