Demand for China consumer staples remained resilient in April, with cost and competition becoming key variables in 2H26

Overview

This report is Goldman Sachs' April channel tracker, post-holiday consumer survey, and 1Q26 earnings review for China's consumer staples sector. The report notes that after strong performance in 1Q26 driven by the Lunar New Year peak season and cost lock-ins, 2Q26 growth may moderate somewhat, but sales in most sub-sectors in April still showed resilience. Dairy, condiments, prepared foods, snacks, and value retailers performed relatively well, while beer was dragged by unfavorable weather.

Core views

The core view is: first, demand remains resilient in the off-season, with sales in most categories still growing positively in April; second, emerging channels continue to be an important source of incremental growth for beer, dairy, condiments, and prepared foods; third, the cost tailwind is fading, and rising PET and logistics costs will gradually translate into margin pressure starting from May-Jun; fourth, competitive spending may intensify in categories such as pet food, beverages, and beer, especially in sports drinks, sugar-free tea, O2O, and World Cup-related consumption scenarios.

Analysis framework

The report is mainly based on channel checks, post-holiday consumer surveys, company NDRs, 1Q26 earnings reviews, monthly sales tracking, price tracking, raw milk and dairy cow supply data, store openings and store-level GMV data from value retailers, and valuation comparisons across covered companies.

Methodology notes

• Channel trackingApril Check-in

  Use April sell-in, sell-through, channel feedback, and company communications to judge the start of 2Q26.

  This method is used to compare demand resilience across sub-sectors after the off-season and to identify beer weather drag, dairy recovery, snack momentum recovery, and value retailer store-level performance.

• Consumer surveyPost-holiday consumer tour

  Understand demand and cost trends through post-holiday visits to dairy, condiments, value retailers, pet companies, and channels.

  The report focuses the survey on demand sustainability, contributions from emerging channels, the expiry of cost locks, and changes in competitive spending.

• Valuation and riskGS Factor Profile / Valuation Methodology

  Goldman Sachs uses growth, financial returns, valuation multiples, and composite metrics, together with target-price methodology and key risk assessment to cover names.

  The report discloses frameworks such as GS Factor Profile, M&A Rank, and Quantum, but the main investment judgments in the body are driven by industry tracking and company fundamental analysis.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Mengniu Dairy / Yili Industrial

  Names benefiting from dairy demand recovery and supply-demand rebalancing

  Strengths

  Liquid milk maintained positive growth in April; product mix improved; raw milk prices stabilized and cost exposure is relatively manageable; shareholder return policies are relatively clear.

  Weaknesses

  2Q26 may slow versus the higher base in 1Q26, and the recovery is still at an early stage.

  Comparison

  After Mengniu's high-single-digit growth in 1Q26, April growth slowed to low-single-digit to mid-single-digit; Yili's growth was about 2% in 1Q26 and low-single-digit in April.

  Risks

  Changes in raw milk supply and demand, weaker promotional discipline, and slower-than-expected consumer recovery.

• Busy Ming / Wanchen

  Growth names in food and beverage value retailing

  Strengths

  Store-level GMV trends improved, with Wanchen keeping positive growth in March, April, and the Labor Day period, and a monthly opening pace of about 500-600 stores.

  Weaknesses

  The data may have a time lag, and rapid expansion requires strong operational execution and same-store performance.

  Comparison

  Wanchen shifted from declining store-level GMV across multiple quarters in 2025 to positive growth in January-February and April 2026.

  Risks

  Store expansion quality, slowing same-store sales growth, and intensifying competition.

• Haitian-H / Yihai

  Resilient names in condiments and compound seasonings

  Strengths

  Sales remained strong in April; Yihai's third-party sales grew more than 10%, Haitian posted high-single-digit growth, and the group may benefit from a recovery in the restaurant channel and dividend support.

  Weaknesses

  Growth moderated from the Lunar New Year peak season, and performance among peers was somewhat mixed.

  Comparison

  Leading companies Haitian and Yihai outperformed some smaller condiment companies.

  Risks

  A weaker-than-expected restaurant recovery, price competition, and rising raw material and logistics costs.

• CR Beer / Tsingtao Brewery / Bud APAC

  Beer names driven by weather and event scenarios

  Strengths

  CR Beer maintained low-single-digit growth; sporting events and the World Cup scenario may create summer consumption opportunities.

  Weaknesses

  The industry was dragged by weather in April; Tsingtao and Bud APAC saw volume declines, and O2O promotions pressured ASPs.

  Comparison

  CR Beer performed clearly better than Tsingtao, Bud APAC, and Chongqing.

  Risks

  Unfavorable weather, O2O competition, higher promotional spending, and uneven recovery in the restaurant channel.

• Moutai / baijiu segment

  High-end baijiu resilience and price improvement observation name

  Strengths

  Feitian Moutai case wholesale price improved from Rmb1,650 to Rmb1,675, and both high-end and mass-market products are relatively resilient.

  Weaknesses

  Sub-high-end baijiu remains in destocking, with weak sell-through.

  Comparison

  Moutai is more stable than the sub-high-end baijiu segment.

  Risks

  Wholesale price pullback, weak business banquet and gifting demand, policy pressure, or inventory pressure.

• Nongfu / Eastroc / Tingyi / Uni-President China

  Names benefiting from beverage and packaged food demand recovery

  Strengths

  Oriental Leaf maintained strong double-digit growth, Tingyi beverages grew low-single-digit and carbonated drinks turned positive, and Eastroc energy drink growth accelerated versus 1Q26.

  Weaknesses

  Packaged water and some beverages were still affected by weather, destocking, and competition.

  Comparison

  Nongfu's water growth slowed from high-teens to above-20% in Jan-Feb, while tea beverages remained strong; Eastroc's hydration drink destocking also continued.

  Risks

  PET costs, competition in sugar-free tea and sports drinks, and disruptions from food delivery subsidies.

• Yankershop / Weilong / ChaCha

  Names benefiting from snack recovery

  Strengths

  Yankershop offline sales grew more than 20%; Weilong April sales were +18%; ChaCha recovered to high-single-digit growth off a low base.

  Weaknesses

  Some product lines remain differentiated, such as declining noodle products at Weilong.

  Comparison

  Konjac products grew more than 30%, becoming an important source of Weilong's recovery.

  Risks

  Product-mix changes, channel promotions, raw material costs, and competition.

• WH Group

  Name with resilient pork earnings

  Strengths

  The report continues to favor its earnings resilience, pig-price tailwind, and efficiency improvements.

  Weaknesses

  The pig-price cycle may still fluctuate.

  Comparison

  Compared with food and beverage companies facing higher cost pressure, pig-price tailwinds provide more explicit earnings support.

  Risks

  A pig-price reversal, cost volatility, overseas business FX and demand risks.

• China Pet Foods / Petpal

  Names facing competitive pressure in pet food

  Strengths

  Petpal expects healthy export growth in 2026 and further acceleration in 2027, with domestic revenue targeted to grow 20%-30%.

  Weaknesses

  1Q26 profits across the pet sector generally missed expectations; domestic margins were dragged by investment to defend share, while overseas margins were affected by FX and input costs.

  Comparison

  The report mentioned that China Pet Foods was downgraded to Neutral and Petpal to Sell, indicating higher risk in this sector than in most consumer staples sub-sectors.

  Risks

  Intensifying competition, elevated marketing spending, FX and input cost pressure, and slow domestic margin recovery.

Key data

• Mengniu April liquid milk growthLow-single-digit to mid-single-digit growthThis continued the recovery trend after high-single-digit growth in 1Q26.
• Yili April liquid milk growthLow-single-digit YoY growth1Q26 liquid milk growth was about 2%, and the full-year guidance is for low-single-digit growth with stable gross margin.
• Yihai April third-party salesMore than 10% growthGrowth moderated from the 1Q26 Lunar New Year peak season, but remained in double digits.
• Haitian April salesHigh-single-digit YoY growthThe condiments leader remained highly resilient.
• Anjoy April salesDouble-digit growthDemand for prepared foods remained strong.
• Tsingtao April beer volumeHigh-single-digit declineThe industry was affected by unfavorable weather.
• Bud APAC April volumeLow-teens declineThe super-premium mix still grew in double digits, but overall performance was dragged by weather.
• CR Beer April volumeLow-single-digit growthPerformance was better than the industry and broadly in line with the 1Q26 trend.
• Wanchen April store-level GMVLow-single-digit growthPositive growth was maintained in March, April, and the Labor Day period.
• Busy Ming / Wanchen store-opening paceAbout 500-600 stores per monthStore network expansion remained strong.
• Weilong April sales+18%Konjac products grew by more than 30%, while noodle products declined.
• Yankershop offline salesMore than 20% growthSnack category momentum remained strong.
• Feitian Moutai case wholesale priceRmb1,675So far in 2Q, it has gradually improved from Rmb1,650.
• Raw milk priceAbout Rmb3.0/kgThe latest reading as of Apr 16, 2026 was about Rmb3.01/kg, and the YoY decline narrowed in 1Q26.
• 1Q26 milk production+3.4% YoYData from the Ministry of Agriculture and Rural Affairs.
• March 2026 dairy cow herd-4.4% YoYThe supply side is still adjusting.

Impact & implications

The implication for investment is that, in the short term, revenue-side opportunities still exist in categories with clearer demand recovery and channel expansion, such as dairy, condiments, prepared foods, snacks, and value retailers; however, profit margins require a more cautious assessment of PET, logistics, and competitive spending. The report tends to favor leaders with brand strength, execution, product power, and long-term share gains, while treating cost as a key swing factor for near-term share prices and earnings forecasts.

Risks

• PET packaging costs will rise significantly from May-Jun, with spot prices still far above the 2025 average.
• Logistics costs began rising in Mar-Apr and may erode margins at food and beverage companies.
• Competitive spending in beer, beverages, and pet food may intensify further, affecting ASPs and margins.
• As 2Q26 enters the off-season, the strong 1Q26 performance may lead to a natural slowdown in growth.
• Weather has already dragged on beer and some beverage sales; if summer weather is unfavorable, volumes may remain under pressure.
• Although O2O platform promotions contribute to sales volume, they may suppress price and mix improvement in categories such as beer.
• Destocking in sub-high-end baijiu is still ongoing, and end-market sell-through remains weak.
• Rapid store openings among value retailers may create risks to store-level efficiency and operating quality.

What to watch

• The pass-through of May-Jun PET procurement prices and logistics costs to 2Q26 and 2H26 gross margins.
• Whether dairy liquid milk recovery can continue from April into 2Q26 and drive a supply-demand cycle rebalancing.
• Whether beer can shake off weather drag in the summer, sports events, and World Cup consumption scenarios.
• The contribution of O2O, B2B, and value retailer channels to beer, dairy, condiments, and prepared foods sales.
• Wanchen and Busy Ming's store-level GMV, store-opening pace, and year-on-year stability in 2H26.
• Whether Feitian Moutai wholesale prices can continue to improve and support confidence in the baijiu sector.
• Whether the recovery momentum in snack brands such as Yankershop, Weilong, and ChaCha can continue in April and beyond.
• Whether competitive spending in pet food eases, and whether Petpal can deliver export growth and domestic mid-price share gains.