China raw egg brand Yellow Swan raises $95m - update

The first tranche was led by Kunyan Capital and an industry fund under People’s Daily Online. The second tranche was led by Fengshion Capital with participation from Meridian Capital and Green Harbor Investment. Existing investors Xiamen C&D Emerging Industry Equity Investment and EverYi Capital re-upped.

Yellow Swan's parent company, Fengji Food Group, was established by Proterra in 2019. The private equity firm provided initial funding. Fengji produces high-quality eggs and processed egg products, covering the entire supply chain.

Proterra said in a statement that Yellow Swan "creates and defines a new sub-category of 'edible raw egg.' The brand communicates its core values of 'more safety (salmonella-free), better taste (no fishy taste), and more nutrition (yellow yolk).'"

Its products are now available in 10 cities, including Beijing, Shanghai, Guangzhou, and Shenzhen. The company also distributes through offline supermarkets and major online retail channels such as Hema, JD.com, and Tmall.

Yellow Swan ranked first in China’s mid-to-high-end egg brand in 2021, according to Frost & Sullivan. Meanwhile, research conducted by Kantar Worldpanel found that Yellow Swan is the preferred choice for seven out of ten households that buy raw eggs.

The company's rise coincides with that of the broader mid to high-end egg category in China. In 2020, nearly 80% of consumers had purchased eggs at a price of at least CNY 1.5 per piece, which qualifies as mid-range. Raw eggs represent nearly half of the mid to high-end market, according to a white paper cited by Yellow Swan.

China is already the world's largest producer and consumer of eggs, with an annual output of more than 31 million tons and a market size of CNY 300 billion. However, the market is extremely fragmented, with branded eggs representing only a 5% share. Consolidation is becoming an industry trend.

"The breeding of egg-laying chickens has high entry barriers, especially in terms of self-raising and self-control," said Zhonglin Du, a partner at Fengshion.

"The Yellow Swan team has 20 years of experience in this area and has managed tens of millions of laying hens. Coupled with precise brand positioning and omnichannel retail capabilities, the company is on course to become a next-generation national enterprise with substantial brand value."

Proterra is also an investor in East Just, best known for the egg substitute brand Just Egg. The private equity firm committed USD 100m to support an Asia rollout.

 

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• Topics
• Greater China
• Expansion
• Consumer
• China
• Meridian Capital
• Growth capital
• Kunyan Capital
• Fengshion Capital
• Proterra Investment Partners