Cream of the Crop: Yili's Dominance in China's Dairy Market
You may not be acquainted with the name Yili, but those involved in the dairy industry likely are. In 2022, Brand Finance ranked Yili as the most valuable dairy brand globally, surpassing the 104-year-old Danone.
Yili holds the top position as the leading dairy products provider in China, particularly excelling in UHT milk. Given China's vast geographical expanse, dairy production is concentrated in Inner Mongolia, situated in the northernmost part of the country, while the major cities are located in the South. Consequently, fresh milk is challenging to transport over long distances, making UHT milk a prevalent choice for dairy consumption in China.
In the fiscal year of 2022, the bulk of Yili's revenue, around 70% of the total, was derived from liquid milk sales. Additionally, 21% came from milk powder, and 8% from ice cream products.
In addition to their successful UHT milk line, Yili has introduced a highly popular Greek yogurt brand known as Ambrosial. You may have come across these products in supermarkets, as the brand has expanded to numerous other countries through exports. As of December 2022, Ambrosial had secured an impressive 65% market share in China.
Yili has achieved several top-ranking positions in various liquid milk sub-categories, such as lactobacillus beverages and children's milk. Their products have consistently claimed the number one spot in these specific segments.
While Yili's presence in the milk powder and ice-cream segments may not be as dominant, their revenues have surged impressively by 62% and 34% from FY2021, indicating their potential as new growth drivers for the company.
Yili's performance as a revenue generator has been truly remarkable and reliable. Over the past 26 years, they have achieved a compound annual growth rate of 25% in their revenue, showcasing their consistent and outstanding growth.
The performance of Yili's share price has been outstanding as well, delivering a remarkable return of 165 times or an average of 22% per year over the past 26 years.
