Arisaig Partners recently published their investor update for August, which is available for download from their website. Their Asia Consumer Fund is now up 34.8% year to date. The latest letter includes commentary on their holdings in Bangladesh, China and South Korea.
Some highlights below (paraphrased):
- Dali Foods: Strategy is to move its traditional, mass-market portfolio up the value curve. Growth in both the energy drink and soy milk categories (the former aided in part by Red Bull’s current dispute over brand rights in China). New product launches for second half of the year include breakfast breads and sliced potato chips. Company is also rethinking its distribution channels, preferring more control over sales and marketing via modern retail and e-commerce channels.
- Vitasoy: China business grew 17% in local currency terms for the latest year ending March 2017, which Arisaig says is a modest pace given the company’s “nascent distribution reach and evident demand for its products.” Vitasoy’s e-commerce channel is also creating new pockets of growth by allowing the company to reach previously unserved regions.
- Orion: Korean snacks company with 60% of its sales in China. Recent issues due to a lack of new product offerings and the THAAD missile dispute between Korea and China (which is now starting to abate). Management reshuffle is currently in progress for the China business and the company has also built up a pipeline of new products for launch next year.