Why an Australian Cereal Is Selling for $50 a Box in China
Weet-bix, a nearly 100-year-old Australian cereal that comes in the form of compact biscuits, has been available in China for eight years. But it only started flying off shelves there, and becoming absurdly expensive, this spring, after the cereal appeared in an episode of a popular soap opera, Ode to Joy, that nearly a billion people watched. In Australia, where Weet-bix was already a hit, the stuff goes for about $3.50 a box. In China, it was going for around double that, but after the product placement, there’s been a shortage, driving some to pay as much as $50 a box online. Sales of Weet-bix in China jumped 50 per cent between 2015 and 2016 mostly as a result of the show, according to the Sanitarium Health & Wellbeing, the business that makes the cereal. Today, China is the cereal’s largest export market.
"We were doing OK then but then along came this opportunity and we just saw this huge spike in sales," Mark Roper, international business manager at Sanitarium Health & Wellbeing, the company that makes Weet-bix, told CNBC.
According to news.com.au, after the episode of Ode to Joy aired in May, “Sanitarium’s e-commerce channels were swamped by celebrity-obsessed Chinese customers. Stores that stocked the cereal in China were raided, and here in Australia, supermarket shelves were stripped of stock as private online sellers or daigou scrambled to ship the local product to Chinese customers with massive mark-ups.”
Now, The Sydney Morning Herald reports, Sanitarium is going all-in on China with a big marketing push and re-brand. It’s changing the cereal’s name to Nutri-Brex—the name it already goes by in Britain—to avoid confusion with a Chinese cereal called Weet-a-Bix, and appointing Taiwanese-Chinese TV star Alyssa Chia to be its brand ambassador. Starting mid-November, Nutri-Brex will be sold in more than 1500 stores in China and several e-commerce channels. The cost of the cereal, Sanitarium claims, will be comparable to what customers pay in Australia.
A much smaller percentage of Chinese households—15 percent—regularly buy breakfast cereal than in Australia, where about 90 percent of households do so. But the market for cereal in China, according to China-based Daxue Consulting, should grow by more than 10 percent this year, part of broader increase in demand for “clean and green” Australian products amid concerns about the safety of food made in China.