Domestic infant formula makes gains in China

Led by Junlebao Dairy, products see growing market share as consumer confidence rises

While some new mothers in China still prefer foreign-produced infant formula, which they believe is of higher quality than its domestic counterparts, Liu Zhaoxia chose a hometown-made product for her baby.

"Every mother wants their babies to have safe and healthy food, and so do I. But I don't want to follow suit blindly," explained the 31-year-old, who is a resident in Shijiazhuang, North China's Hebei province.

Before she gave birth to her daughter in March of last year, Liu toured a cattle-breeding base and processing plant of Junlebao Dairy Co Ltd, the country's fourth largest dairy producer by sales revenue. She was amazed by the comprehensive production chain used to make the baby formula and the series of strict standards for each step in the process.

Founded in 1995, Junlebao used to make only yogurt. It added infant formula to its product line in 2014 to help revitalize the product's domestic presence.

In the past five years, the company has established a whole industrial chain, including a planting pasture, a base for breeding cows and quality-control center.

The company now has 17 production plants and 10 breeding bases with more than 60,000 cows across China.

To improve the quality of its milk sourcing, Junlebao has developed a high-standard cow breeding system, which consists of raising the animals in comfortable barns, feeding them with high-quality fodder and using high-tech machines to milk them.

Dairy producers like Junlebao are encouraged by the government to establish their own breeding farms and develop an entire chain to increase the proportion of self-supplied milk while better controlling product quality.

By 2020, more than 70 percent of milk sourcing will be provided by cows bred by individual dairy firms, the State Council said.

New mom Liu was moved by the quality of the hometown-made formula after her inspection tour.

In 2016, Junlebao formula passed 397 quality tests in Hong Kong and was approved for sale in that market. A year later, the formula began selling in Macao.

The quality of domestic formula has reached the highest level in history, said Wei Lihua, head of Junlebao. "The biggest challenge now is to boost consumers' confidence."

Chinese consumers have increasingly turned to overseas milk products in recent years, especially after formula produced by China's Sanlu Group was found to have been tainted by an unhealthy material in 2008, according to Xinhua News Agency.

The scandal surrounding China's dairy sector has ended and the current quality and safety level of Chinese dairy products is the best it has ever been, said Gao Hongbin, the honorary president of the Dairy Association of China, in an industrial report.

"Dairy producers and governments are carrying out strict and multifarious quality tests on fodder, breeding methods, raw milk and final products," Gao said, adding that consumers' confidence is gradually increasing.

Last year, Junlebao sold more than 52 million cans of infant formula, which weighed 46,000 metric tons and were supplied to more than 2 million babies.

"The target for this year is to reach 75 million cans and to rank first by sales volume in the country," Wei said.

The market share of domestic formula in China increased to more than 60 percent in 2018, compared with less than 40 percent before Junlebao rolled out its formula products, according to statistics provided by the company.