Eastern promise

Tuesday 02 July 2019

Article

Together with Coca-Cola, Chinese dairy group Mengniu will be sponsoring the Olympics between 2021 and 2032, under a combined $3bn sponsorship deal.

Many western consumers may not know about Mengniu. It is one of the top two dairy groups in China, with a product portfolio from liquid milk to ice cream to baby formula. Though China's economic growth has slowed down progressively in the past few years, the overall dairy industry in China continues to grow at double digits with new sub-categories emerging and product innovation. It has been one of the fastest growing food and beverage categories, riding upon Chinese consumers' hunger for nutrition and health. Its sponsorship clearly shows Mengniu's ambition to become a global brand.

Coca-Cola's partnership with Mengniu is also an interesting move. The largest shareholder for Mengniu is COFCO, China's largest food conglomerate, who is also Coca-Cola's China bottler for its beverage. Does the partnership mean Coca-Cola's potential interest in new categories such as dairy (after its entry into coffee)? Or its new partnership may further strengthen its relationship with COFCO to enable its new wave of growth in China?

A global ambition for China's biggest brands is not new. Haier is one of the pioneers in China to set up the advertising board in overseas early 2000... however, it is still a long way to go for a Chinese consumer brand being truly global and relevant in the global market. This year's FMCG Global 50 report identifies the rising Asian brands in the global FMCG sector, including leading alcohol and dairy players. We will wait and see which brand will become a truly global brand like Coca-Cola rising out of the middle kingdom.