The Business Herald’s markets and banking reporter.

Yashili launches formula brand in NZ

Cans of Yashili's infant formula. The Chinese company makes the formula in NZ, but is hoping the NZ sales will help it crack  the Chinese domestic market.
Cans of Yashili's infant formula. The Chinese company makes the formula in NZ, but is hoping the NZ sales will help it crack the Chinese domestic market.

A marketing expert says Chinese dairy producer Yashili's moves to sell its locally-made infant formula in New Zealand supermarkets will help the brand crack the lucrative baby milk market in China.

From today, the Guangdong-based company's Super a-Golden Stage formula will be available in selected New World and Pak'nSave stores across the North Island.

The product is manufactured at Yashili's plant in Pokeno, south of Auckland, which opened in November following a $220 million investment from the company.

The Herald understands the same NZ-made Yashili formula brand will be launched in China on April 23.

It will sell for between $23 and $25 per can in New Zealand supermarkets and 250 to 300 yuan (NZ$55 to $66) a can in China.

Andrew Zhu, a research associate at the University of Auckland's New Zealand Asia Institute, said selling the product here would give it a "country of origin effect" in the Chinese market.

Chinese parents had more confidence in imported formula brands that were also sold in their country of manufacture, he said, compared with those produced solely for export.

"If they can push demand [for Super a-Golden Stage] in the domestic New Zealand market, that will increase the confidence of Chinese consumers," Zhu said.

But simply getting the brand on the shelves of local supermarkets wasn't enough - there needed to be genuine demand for the product.

"It needs to be successful in New Zealand," Zhu said, adding that social media made it easy for Chinese consumers to find out how popular a product was in this country.


We have set up a very good plant in Pokeno, using local materials with the latest process technology and high automation levels. All my staff are recruited locally - we see ourselves as a local company.
Yashili NZ general manager William Zhao

He said Yashili would need to invest in advertising to increase awareness of its formula brand among Kiwi parents.

"It will take some time for people to understand what is actually going on."

Yashili New Zealand general manager William Zhao said selling the product outside China was part of a "globalisation strategy" for the company, which is majority owned by Chinese dairy giant Mengniu.

"We have set up a very good plant in Pokeno, using local materials with the latest process technology and high automation levels," Zhao said. "All my staff are recruited locally - we see ourselves as a local company."

Like Zhu, he said selling the product in New Zealand would increase the confidence Chinese consumers had in the brand.

Yashili said an important feature of Super a-Golden Stage was its "deep cap with spoon" packaging design, which allowed parents to prepare the formula without touching it.

The product adhered to strict New Zealand food safety standards and was audited by AsureQuality, the company said.

Demand for imported formula has boomed in China following a number of food safety incidents, including the 2008 melamine scandal, which killed six babies and sickened thousands more.

The Chinese retail baby-milk market is tipped to grow to US$25 billion ($35.8 billion) by next year.

- NZ Herald

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