Food Union – a modern dairy manufacturer, uniting businesses across Europe – decided to enter the Chinese market with one of its dairy products from the Baltics. This helped to form the market positioning prior to launching local production.
A myth about how the Chinese nationals do not tolerate milk and that is why there is no dairy market in China is getting destroyed by the harsh reality: Chinese dairy market is greatly larger than that of, for example, Russia.
Undoubtedly, the dairy market in China is yet to mature, but it is increasing rapidly due to the immense demand of consumers for new products, especially that of the European origin, as well as due to the overall popularization of health benefits of dairy products. Due to the limitations in China’s infrastructure of dairy production, the ability for cold ‘retail” and its distribution is also stifled. Thus, the main product in the Chinese dairy market, as well as the focus of Food Union, has become milk with long shelf life.
When deciding on portfolio of its dairy brands, the main factor determining factor was which brand looked the most like it’s been developed in Europe. This is connected to the fact that Chinese consumers fear buying low quality products, or generally being misled about the quality and authenticity of the brand: Chinese companies have mastered the art of copying any and all strategies and designs.
After conducting research, the Baltic brand Limbažu Piens was chosen. It exists on the Latvian market since 1922 and is famous for its authenticity, which perfectly meets the demand of Chinese consumers. The main argument for this decision was the difficulty for Chinese people to pronounce the name – Limbažu Piens. Thus, this is a strong rtb for genuineness of the brand: “Chinese people, when presented with this brand, would have never thought that it could have been created by Chinese people themselves” – says the CEO of Mildberry, Oleg Beriev.
Mildberry and Food Union have been working together for many years, including on Limbažu Piens. However, the brand positioning and packaging design, developed for Latvia, was in need in correcting according to the specificity of Chinese consumers. Mildberry Moscow and Mildberry Shanghai were tasked with correctly repositioning the brand, adapting both semantic and visual components to the new market.
Mildberry Shanghai developed the Chinese adaptation of the brand name that includes a combination of Chinese characters, which sound similar to the European name and also communicate needed meanings and images.
The specially designed packaging design added to the authenticity of the European product. In China, milk is an expensive product often used as a gift – therefore, the design is that of a premium product, underlining the European origin of it, high quality, and long history of the brand.
This is how a dairy brand from Latvia entered the Chinese market and in turn, marked the start of the development of Food Union’s dairy business in China.