Mengniu Milk: Brand, distribution, and product expansion are in full swing; the liquid milk market is now stable.

In 2025, China’s ambient liquid milk category faced the triple pressures of “weakening demand, declining prices, and channel transformation,” marking the market’s official transition from the “penetration expansion” phase to a new cycle of “deep cultivation of existing stock.”

In this context, Mengniu chose a more challenging yet more valuable path to break through. According to the annual performance report released by Mengniu Dairy (2319.HK) on March 25, its ambient segment focuses on the three strategic goals of “drinking milk, drinking good milk, and drinking the right milk,” balancing inclusive penetration and innovative value leadership, while strategically laying out a series of nutrition-functional products. By building extreme cost capabilities and driving differentiated innovation, it aims to stabilize and rebound its business, comprehensively fortifying Mengniu’s liquid milk foundation and setting a value benchmark for industry transformation and upgrading.

Inclusive strategy penetrating the market, technological innovation breaking milk consumption barriers

The core of “drinking milk” lies in breaking consumption thresholds, making milk a fundamental part of national nutrition. However, this does not imply simple low-price competition; rather, it is through the combination of “extreme cost capability + technological innovation” that it aims to widen consumption breadth while digging deeper into demand.

At the inclusive level, Mengniu initiated the “Baili Package Campaign” targeting the lower-tier market, with plain and flavored milk as the main products. Through a minimalist design of various packaging forms such as Baili Package, Cow Horn Package, Aiklin, Tetra Pak, and Little White Bag, combined with extreme cost control, products rapidly penetrate county-level markets with high cost-performance ratios. This “quality-price ratio” strategy does not sacrifice quality but rather optimizes packaging innovation and supply chain efficiency to genuinely pass cost benefits on to consumers, consolidating the foundational market in lower-tier areas and competing for market share in existing stock.

Greater growth comes from overcoming “milk consumption barriers” through technology. Approximately 660 million people in China with lactose intolerance or suspected lactose intolerance have long been excluded from milk consumption, representing a huge overlooked incremental market. Mengniu’s “Soft Milk” product line employs EHT enzyme hydrolysis technology to break down lactose, reducing nutrient molecules by 47% for easier absorption, targeting the specific positioning of “if you can’t drink milk, try soft milk,” effectively breaking the consumption barriers for lactose-intolerant individuals, and has received authoritative certification from the State Sports General Administration’s training bureau, successfully expanding into new scenarios like breakfast hot drinks, extending the consumption boundary to traditional breakfast populations accustomed to porridge and soy milk, achieving dual growth in both audience and sales.

At the same time, Mengniu’s parent brand and flavored milk leverage major events such as the Milan Winter Olympics and the USA-Mexico World Cup, as well as year-round marathon events, to promote the brand message of “drinking more milk and exercising more,” thoroughly enhancing education around the ambient category, deeply binding inclusive products with healthy lifestyles, and increasing the market penetration and consumer accessibility of basic dairy products to enable more people to consume milk.

Telunsu shapes an organic new matrix, scenario innovation activates young consumers

When basic needs are met, the wave of consumption upgrades points toward “better” value experiences. Mengniu’s definition of “drinking good milk” has long transcended simple competition based on nutritional metrics, instead providing consumers with comprehensive satisfaction from quality to emotion through a restructured value chain.

Telunsu is undoubtedly the leader of this strategy. In 2025, coinciding with the brand’s 20th anniversary, Telunsu launched its strategic benchmark product “Shajin Taohaishamo Organic Pure Milk,” which not only represents a high-end single product but also embodies the “grass-fed milk” full industry chain philosophy. In the Ulan Buh Desert, natural barriers are formed by the Yinshan and Helan Mountains, with 98 million sand-resistant trees reconstructing the regional ecology, while groundwater from the upper Yellow River nourishes 350,000 acres of organic pastures, and 34 pastures practice the ecological cycle of “three acres of land feeding one cow.” This systematic integration of the seven ecological elements of “mountains, waters, forests, fields, lakes, grasses, and sands” has enabled Shajin Taohaishamo to achieve dual organic certification from China and the European Union and win the German BIOFACH Gold Award for twelve consecutive years, establishing itself as a global benchmark for dairy quality.

Meanwhile, other Mengniu brands are also conducting scenario-based innovations in their respective fields: Chunzhen breaks the fixed consumption scene of yogurt with self-standing bag packaging, entering fragmented snack time; Zhen Guo Li’s fresh coconut milk, overcoming technical challenges, balances both animal and plant protein nutrition, satisfying daily taste enjoyment while easily supplementing necessary nutrients. Earlier this year, the industry’s first “milk calcium electrolyte drink” was innovatively launched, precisely targeting the compound needs of the sports crowd for “rehydration and calcium supplementation,” filling a market gap and leading sports nutrition into a new era of “sports calcium supplementation.” Milk is no longer just a nutritional product on the dining table but has become a lifestyle companion integrated into diverse scenarios such as commuting, exercising, and socializing.

It is worth mentioning that in 2025, Mengniu deeply bound with top IPs such as the NBA, “Nezha 2,” Universal Studios, and Disney, establishing a full-link conversion ecosystem. The collaboration between Chunzhen and “Nezha 2” garnered over 6 million topic discussions on Xiaohongshu, with related products selling over 200,000 units in the first month on e-commerce platforms. This “brand resonance” not only achieved sales conversion but also, through emotional connections, endowed products with cultural added value, realizing “brand resonance and mutual empowerment.”

Functional product matrix precisely reaches target, RTM channel reconstruction empowers growth

Focusing on the functional track, Mengniu continues to emphasize product innovation for specific functions and groups, building a growth engine for “drinking the right milk.” By meeting specific needs with precise nutrition and achieving accurate reach through channel transformation.

On the product side, Mengniu has built a functional matrix covering the entire lifecycle, with each product targeting specific needs of specific groups, translating “functionality” from concept into tangible product experiences: Telunsu launched a 200-cap precision nutrition functional series, including CBP, 0 fat, calcium, iron, zinc, etc., aligning with specific functional demands; the “You” series from New Yangdao and the specialized series from Future Star cater to different life stage needs of the “elderly and young,” enhancing the nutritional supplementation system, backed by exclusive patents and empirical evidence, accurately safeguarding the health of the elderly and the growth of children. Additionally, there are more diversified product layouts targeting various scenarios such as sports, dining, street drinks, and different consumer groups.

The transformation on the channel side provides efficient pathways for these precise products. Mengniu has abandoned the traditional “broad net” approach, instead advancing RTM channel ecosystem reconstruction. It has established 600 online sales channels, achieving precise matching through product differentiation, exclusive supply, and regional authorization; traditional e-commerce strengthens brand-channel resonance, with new product sales accounting for 65%; content e-commerce and private domain enhance live-streaming and content investment to improve brand awareness; offline, it directly controls terminals through service locations, improving single-store efficiency with “people, vehicles, and goods” digital management. More strategically significant is the exploration of emerging channel potentials: in the snack discount sector, collaborating with leading brands like Mingming Hen Mang and Hao Xiang Lai, entering county markets with customized small packaging; in the B-end catering channel, developing specialized products for scenarios like coffee shops and hotel breakfasts to create business increments.

This strategy of “product-channel alignment” is particularly evident in the instant retail sector. By building a direct sales structure of “headquarters coordination + regional landing,” Mengniu has achieved “rapid fulfillment and precise marketing,” not only enhancing channel efficiency but also enabling functional products to accurately reach consumer groups with specific needs—fitness enthusiasts find high-protein milk on e-commerce platforms, office workers buy breakfast scenario products at convenience stores, and lactose-intolerant individuals learn about soft milk through live-streaming e-commerce. Channels are no longer just simple pathways but amplifiers of product value.

In 2025, Mengniu responded to the industry’s “threefold pressure” with a “three-layer strategy.” From the technological inclusiveness of soft milk to the ecological high-end of Shajin Taohaishamo, from the precise segmentation of the functional matrix to the agile reconstruction of RTM channels, Mengniu has proven one thing: even in the existing market, value innovation can still create increments. This is not only a transformation and upgrade for the enterprise itself but also provides a feasible path for China’s dairy industry to shift from a price war to a value war—only by adhering to “consumer-centered” value creation can it navigate through cyclical fluctuations and ensure that every cup of milk carries the weight of a healthy China.

(Author: Wang Lei)

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