Sanitarium announces major Chinese expansion strategy

Posted by AFN Staff Writers on 24th October 2016

Australian health foods maker Sanitarium has unveiled its plans to capitalise on new appetite in China. This follows a sudden surge for the Sanitarium Weet-Bix product manufactured in Australia.

The Australian-owned Sanitarium, which recently opened an office in Shanghai and has exported to China for more than eight years, will launch an international version of Weet-Bix called ‘Nutri-Brex’, into the Chinese domestic market from mid-November 2016.

The launch sees Sanitarium seize on an opportunity to build its brand in the largest emerging ready-to-eat cereal market in the world, while complying with new trademark restrictions that are now coming into place in China.

Capturing China’s growing demand for Western-style breakfast

In China there is a growing trend among consumers for Western-style breakfast cereals, especially aspirational international brands with strong health and food safety credentials. This was demonstrated in May 2016 by the response to a Weet-Bix product placement on a popular Chinese TV soap, Ode to Joy. In the immediate aftermath, sales in mainland China soared, vastly exceeding forecasted expectations. Australian sales also benefited, with requests for Weet-Bix to Australian-based businesses sending products to China seeing some supermarket shelves stripped of stock.

While the size of the Chinese breakfast cereal market is difficult to quantify, Sanitarium reports its 2015/16 financial year breakfast cereal sales increased by approximately 50 percent, and it conservatively forecasts similar growth in 2016/17.

Todd Saunders, General Manager at Sanitarium Australia said the only difference between Weet-Bix and Nutri-Bix will be its name.

“Different to the iconic Weet-Bix product in name only, Nutri-Brex is made in the same factories, using the same ingredients and the same traditional recipe that Sanitarium has used for almost 90 years. It’s the same name that we use for Weet-Bix in the UK, our second biggest export market,” Saunders said.
“Despite the recent success we’ve enjoyed, it is still relatively early days for Sanitarium in China. Data suggests about 15 percent of Chinese households make a regular breakfast cereal purchase, compared with 90 percent of Australian households. That’s why the timing to change brand names while Chinese consumer awareness of Weet-Bix is at its highest actually works,” Saunders stated.

Nutri-Brex will be positioned in China as a healthy and convenient breakfast choice for families, with its strong nutrition credentials and use of Australian wholegrain wheat in focus. The launch, which represents Sanitarium’s biggest push into China to date, will be supported by a digitally-focused marketing campaign that also aims to raise awareness among Chinese consumers of Sanitarium.

Sanitarium to use celebrity endorsement
As part of phase one of the launch, Sanitarium has partnered with Taiwanese-Chinese TV star Alyssa Chia to promote the brand to her ‘We Chat’ social media audience which numbers in the millions. The 42-year-old celebrity mother, who recently announced her third pregnancy, has strong affinity with health and wellness in China and was chosen for her ability to influence increasingly affluent Chinese mothers seeking natural and nutritious products for their families.

Online and in-store sales strategy
Nutri-Brex will be sold in over 1,500 stores nationwide in China and multiple e-commerce channels from mid-November 2016. Currently online sales, predominantly through Sanitarium’s flagship store on Alibaba’s TMall platform, represent more than half of all sales of Sanitarium product in China.

“Australia’s clean, green image and excellent food safety standards present us with an enviable opportunity. Chinese consumers are demanding healthy, high quality products and that’s what we’ve built our reputation around since 1898,” said Saunders.

“We famously changed Australian breakfast habits back then and now we’re playing a part in China’s breakfast revolution. While exports currently represent just five percent of Sanitarium total sales, we’re excited by the buoyant market and look forward to introducing more of the Chinese community to our healthy, wholesome plant-based products into the future,” Saunders said.

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