Why is Manado milk powder discontinued
Since December 2018, Manado infant formula milk powder has been gradually discontinued. This milk powder was originally one of the most popular brands in the Chinese market, so why did Manado milk powder stop selling? This article will answer this question from four aspects: market performance, quality issues, purchasing agents and management changes.
Market performance
Manado milk powder is a milk powder brand produced by Mengniu Dairy Company and entered the Chinese market in 2008. In the past few years, Manado milk powder has maintained high sales and has become the first choice brand for newborn nutritional supplements among consumers. However, market performance has gradually declined recently. According to relevant agency data, the market share of Manado milk powder fell by 7.1% in 2017. This market performance reveals consumers\’ doubts about the quality of Manado milk powder. Once the reputation of the milk powder brand is damaged, it will be very difficult to recover.
Quality issues
In fact, the suspension of sales of Manado milk powder is related to quality issues. In July 2018, Manado milk powder was inspected and punished by the Hainan Provincial Department of Oceans and Fisheries for failing to meet nutritional standards; subsequently, the U.S. Food and Drug Administration (FDA) also found that a certain component of the product did not meet the U.S. regulations. Although there have been no reports of harm to consumers, these quality issues are enough to make many consumers avoid milk powder brands. As quality problems worsened, Manado milk powder quickly lost market trust and loyal consumers.
Purchasing on behalf of others
In addition, there is a serious phenomenon of purchasing on behalf of Manado milk powder in the Chinese market. The existence of purchasing agents not only brings losses to tax revenue, but also puts pressure on quality supervision of Manado milk powder. A large number of personal cross-border sales are carried out by purchasing agents. It is difficult to monitor the source and sales process of the products, and it is easy to forge relevant product certificates. These factors have exacerbated Manado\’s milk powder quality problems and indirectly led to a decline in market share.
Management changes
Finally, Mengniu Group held a strategic investor conference in November 2018, announcing that the group would carry out management adjustments and strategic reorganization. Compared with its early days, Mengniu\’s reputation has become complicated after its business diversification, and management adjustments were once considered a key move to alleviate public concerns about the brand. In fact, the discontinuation of Manado is considered to be part of the adjustment of Mengniu\’s milk powder brands, and the company\’s strategy centered on adjusting the milk powder business is also a general trend.
Summary
The suspension of sales of Manado milk powder needs to be considered from four aspects: market performance, quality issues, purchasing agents and management changes. The decline in market share and product quality issues are one of the main reasons. The phenomenon of purchasing agents and management adjustments have also exacerbated the predicament of Manado milk powder. For the operators of the Manado milk powder brand, they should work hard on the quality and reputation of the market-leading brands to achieve the long-term goals of the company\’s sustainable operation and development strategy.
