Blog: Katy AskewSanlu's new owners turn to organic to escape melamine's shadow

Katy Askew | 16 December 2013

The now owners of the Sanlu brand, Zhejiang Sanlu Industrial Co, are reportedly hoping that they can rebuild consumer trust and leverage - what remains of - Sanlu's brand equity by moving into organic grains.

Sanlu is a name synonymous with the 2008 melamine contamination scandal, which resulted in the deaths of six babies and sickened 300,000 more. Sanlu Group, which had been worth CNY14.9bn in 2006, was pushed into bankruptcy in the wake of the scare. It was then snapped up by Zhejiang Sanlu Industrial Co for CNY7.3m.

According to The Global Times, Sanlu's new owners now hope to build the brand into a force in the organic grain sector.

Linking the brand with the organic movement is a cleaver ploy. Organic sales in China growing apace. According to the China-Britain Business Council organic sales are expected to grow by more than 20% a year until 2020.

The key driver of this expansion is the widespread belief that organic products are safer. This selling point helps provide organic food manufacturers with a strong identity and clear message in a market where food safety concerns are almost a national obsession.

In obtaining organic certification in various markets - including China, Japan, Europe and the US - the message is clear. Sanlu grain products are safe.

Whether this will be enough to allow the brand to emerge from the long-shadow cast by the melamine contamination scare remains to be seen.

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