September 15, 2022
With quirky name, Adopt A Cow serves pure milk to Chinese dairy market
An eFeedLink Hot Topic
Established in July 2014, Adopt A Cow entered China's milk market with pure milk and yogurt as its main products, and achieved an annual income of ¥2.5 billion (US$370.6 million).
In 2019, the company achieved revenue of ¥865 million, which subsequently increased to ¥1.650 billion in 2020. Last year, Adopt A Cow's revenue reached ¥2.566 billion, a 55.54% increase over the previous year.
To improve its competitiveness in China's dairy market, Adopt A Cow first established its reputation as a professional cattle breeder. In 2014, it spent ¥460 million to build its first farm where it brought in 60,000 dairy cows.
Tapping into the notion of "If the cows are raised well, the milk will be good", the company claimed to let its Holstein cows listen to music and enjoy medicinal baths. Its name is meant to convey the idea of ‘adopting’ cows for their milk-producing purposes, and that has helped Adopt A Cow to gain online popularity quickly and caught the attention of investors.
The main products of Adopt A Cow are pure milk and its derived products from full cream milk, as well as high-end products including low-fat milk, A2 milk and Jersey milk. As the company's largest source of revenue, pure milk products fetched ¥1.428 billion in revenue in 2021, accounting for 56.85% of its main business revenue.
As it expands its product line, Adopt A Cow built more farms in tandem to increase and guarantee the milk supply. Seven pastures were set up in Shandong, Heilongjiang and Hebei, five of which are fully-owned pastures and two are joint ventures. In 2020, the average annual yield of lactating cows in the five operating pastures was 12.67 tonnes.
However, whether its marketing strategy can help Adopt A Cow maintain its rapid growth has raised some concerns. Although the company makes up for the shortage of milk sources by constructing more farms, its supply chain continues to rely on third parties. This factor would be crucial to its goal of raising cows well to produce quality milk.
Also, to ensure continuous growth of its revenue, the company needs to develop traditional channels apart from its online presence. It needs to focus on competition with veterans that own physical retail stores, in order to expand its market shares.
- David Lin, eFeedLink