New Kiwi business Biopure Health is taking New Zealand dairy to the Chinese market and is on track to open its first two stores in Chengdu and Panzhihua next month.
Simon Page and Jane Li started the company after a flood of enquiries from China soon after the Sanlu infant milk formula scandal, which saw hundreds of children poisoned by products that had been padded with dangerous levels of melamine.
"People were begging us to source infant formula for them. It was clear there was a massive demand for this country’s milk," Page said.
Two years on, they've made it through market research, capital raising and jointly developing its own brand of infant formula in partnership with Auckland company New Image, which is also handling the processing and packaging.
Biopure Health's first 17,000 cans of infant formula leave New Zealand this month and will be marketed directly in China through its own chain of stores.
Biopure Health will also sell online through its own official site, but has chosen not to use popular Chinese auction website Taobao to protect its supply chain integrity, Page says.
He said Biopure Health's product range was New Zealand-controlled from milk to market, with every stage from processing, canning and retailing done by wholly-owned New Zealand companies.
“There are a heap of brands in China that are claiming to contain Kiwi milk products but in the main they are owned by multi-nationals or Chinese investors and aren’t transparent in their supply chain,” he said.
“Many companies just source New Zealand milk products and package it in China. But our research shows, Chinese consumers don’t trust that. They want to know that the product is authentic New Zealand, every step of the way."
The amount of red tape involved in bringing Biopure Health's infant formula to China was not trivial, he said.
“Getting the product certified for importation in China was a lengthy process. They have thousands and thousands of applications awaiting approval. Being a Kiwi definitely helped get me to the top of the pile,” he said.
Li said the couple plan to spend the next three months on the ground in China raising awareness of their company and country, including live promotions at malls and presentations at maternity hospitals, and have plans for some “Kiwi style shenanigans” to launch the shops.
Biopure Health already has plans underway to expand the product line to include UHT milk and nutraceutical products and intends to have 10 stores in China by the end of 2013.
"We are planning to also move into Hong Kong next year and will seek distributors there," Li said.
"Looking ahead, it's pretty clear to most that demand for quality dairy foods in China will continue to grow."