Bright Dairy Co reported a quarter-over-quarter improvement after the pandemic faded in the June quarter.
First-half revenue rose 9.5 percent to 12.1 billion yuan (US$1.73 billion) though profit was down 16 percent to 308 million yuan. In the second quarter, its revenue was 7 billion yuan, a 37 percent pickup from three months ago.
Pu Shaohua, the company’s chairman, said: «We believe there’s still growth potential in the rest of the year with new initiatives and ongoing expansion projects.
«We will stick to premiumization strategy in the fresh milk sector and we’ll diversify more dairy product offerings with more distribution channels, flavors and packages,» he said.
The demand for fresh milk and other dairy products has been booming since the coronavirus outbreak and that had benefited high-end products and nutritional supplements with high protein content.
Although overall business performance is still lagging behind budget, Pu said «we’ll not be daunted by the adverse impact of the coronavirus outbreak and we look forward to rebounding in the second half.”
In the Yangtze River Delta region, the company hopes to strengthen integrated development to better leverage geographical advantages and complement supply chain capabilities.
It plans to strengthen investment in neighboring provinces by setting up new branches and also considers acquisition of local expertise and existing production capabilities.
Ice cream is also a bright spot although it contributes a small portion of Bright Dairy’s revenue, and Pu expects this year sales of ice creams and popsicles to double from last year.
Subsidiary Yimin Food makes traditional green bean and red bean popsicles and ice bricks, which are still bestselling products.
Younger shoppers are also embracing new options thanks to its successful tie-ups with White Rabbit milky candy and new flavors with more high-end dairy ingredients.
«In northern China, we have successfully added new retail channels to face competition from other local dairy companies, as consumers are also asking more products with high value for cost,» he added.
A new bakery store — Ur Bakers — will be unveiled on Nanjing Road E. early next month to use Bright Dairy’s UBest fresh milk and other yogurt products as baking materials in a move to expand new retail channels and business formats.
At the same time, it will also eliminate outdated production capacity and less satisfactory retail channels to enhance supply chain efficiency.