Analysis of IP Authorization Dependence and Resolution Strategies for Grandpa's Farm

Based on the information I collected, I will now systematically analyze the IP authorization dependence and resolution strategies of

.

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Grandpa’s Farm International Holdings Limited submitted a prospectus to the Hong Kong Stock Exchange (HKEX) on January 5, 2016, seeking to list on the main board[1]. Founded in 2015 in Guangzhou by four Chinese nationals: Yang Gang, Jiang Fuquan, He Jiannong, and Liu Haibo[2], the company is mainly engaged in the R&D and sales of baby snacks & complementary foods and family foods.

As of the end of September 2025, the company’s product portfolio covers

, with baby snacks & complementary foods accounting for over 80% of revenue, and family food business accounting for approximately 19.6%[1]. Based on the total transaction value of Chinese baby snacks & complementary foods in 2024, the company ranks second in the industry and first in the organic category[3].

According to public information, Grandpa’s Farm presents a pattern of

in IP operation:

Indicator	Data Performance	Industry Comparison
Proportion of self-owned IP revenue	Approximately 4%	Lower than industry average
Authorized IP business	Participates in co-branding collaborations with IPs such as Da Feng Da Geng Ren	-
Brand building	Relies on “European imported” concept marketing	-

The company disclosed in its prospectus that its business model is

, but from the perspective of IP assets, the revenue-generating capacity of self-owned IP is extremely limited. This is in stark contrast to the current industry trend of “IP-enabled product premium” in the baby food sector.

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Since its founding in 2015, Grandpa’s Farm’s

, rather than focusing on the accumulation of IP cultural assets:

• Brand positioning drift
  : It emphasized its “European original imported” identity in the early stage, and only gradually downplayed this promotion in 2024[2]
• Lack of IP content
  : No recognizable original IP image or story system
• Single consumer perception
  : Consumers’ perception of the brand stays at the product function level, rather than emotional connection

In this model, the brand’s premium capability is built on the “imported concept”, lacking a real cultural foundation.

The company adopts an

(100% OEM; its Zengcheng factory only started small-scale independent production in October 2025)[1], and this model brings multiple constraints:

1. Quality control risks transmitted to the brand
   : It has been penalized by regulators multiple times for food safety issues (e.g., nutritional content of infant rice noodles and puree failed to meet standards in 2019, fined and confiscated a total of RMB 290,000 for unqualified products in 2020)[1]
2. Difficulty in product differentiation
   : It is difficult to form a core product line with IP recognition among 269 SKUs
3. Weak voice in supply chain
   : Dependence on 62 OEM factories limits the independent development space of IP products

Data from the prospectus shows that the company’s sales and distribution expenses as a proportion of revenue rose from

[2], with e-commerce platform services and promotion fees accounting for as high as .

This “heavy marketing, light R&D” investment structure leads to:

• R&D expenditure accounts for only 2.2%-3.5%[1], far lower than the innovation investment of leading enterprises in the industry
• Brand building stays at the level of traffic acquisition, lacking systematic investment in long-term IP assets
• Marginal decline in marketing efficiency, with net profit margin dropping from 12.1% to 11.2%[1]

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In view of the shortcoming that self-owned IP revenue accounts for only 4%, it is recommended to systematically develop original IP:

IP Type	Development Direction	Commercialization Path
Brand IP image	Create cartoon images with memorable features (e.g., “Farm Cuties” series)	Product packaging, peripheral derivatives, emoticons
Content IP	Build a short video IP for infant nutrition popularization	Social media matrix, parent-child education content
Experience IP	Design offline “Grandpa’s Farm” themed experience spaces	Parent-child parks, pop-up stores, factory tours

Integrate self-owned IP into the entire product development process, rather than simple co-branding:

• IP-based product naming
  : e.g., “Farm Cuties Rice Cracker Series”
• IP-based packaging design
  : Unify IP visual identity system
• IP-based gift set
  : Create holiday-limited IP gift boxes

The company’s current marketing team focuses on e-commerce operations, and needs to add content creativity and IP development functions:

Proposed Structure:
├── IP Creative Department (responsible for original content development)
├── Copyright Authorization Department (responsible for IP commercial authorization)
└── Community Operation Department (responsible for fan economy operation)

Leverage the consumer reach capability of existing direct sales channels (accounting for 42.1% of revenue) to build a content ecosystem:

Platform	Content Type	Goal
Xiaohongshu	Product reviews, parenting sharing	Drive conversion through product recommendation
Douyin	Funny short videos, IP animations	Brand exposure
WeChat Official Account	Parenting popularization, IP stories	Deep user engagement

The company put its self-owned production base in Zengcheng, Guangzhou into operation in October 2025[1], and should accelerate capacity expansion to provide quality assurance for IP products:

• Phase 1 (2026-2027)
  : Achieve independent production coverage of core baby food categories
• Phase 2 (2028-2029)
  : Configure exclusive production lines for IP co-branded products

Establish strategic cooperation with core OEM factories to

, rather than maintaining a simple procurement relationship:

• Share intellectual property rights of product formulas and packaging designs
• Establish a quality traceability system for IP products
• Explore deep binding models such as profit sharing

After IPO, self-owned IP assets can be incorporated into the enterprise valuation system:

IP Asset Category	Valuation Method	Potential Value
Brand IP	Brand premium method	Increase price-to-earnings ratio
Content IP	User value method	Open up new revenue streams
Authorized IP portfolio	Market comparison method	Enhance profit certainty

Through the capitalization of IP assets, the risk of reliance on externally authorized IP can be reduced, and enterprise autonomy can be enhanced.

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1. Brand trust crisis
   : If it continues to rely on externally authorized IP and neglects self-owned IP construction, it may face business interruption risks when IP authorizations expire or collaborations are terminated
2. Competitor catch-up
   : Competitors such as Engnice, Deer Blue, and Wo Xiao Ya are also accelerating their IP layout
3. Consumer generational shift
   : The new generation of parents is more sensitive to “fake foreign brands” and requires authentic and credible brand stories

2026            2027            2028            2029
   │               │               │               │
   ▼               ▼               ▼               ▼
┌─────────┐   ┌─────────┐   ┌─────────┐   ┌─────────┐
│IP Asset │   │IP Content│   │IP Auth  │   │IP Ecosystem│
│Inventory│→ │Preliminary│→ │Proportion│→ │Closed Loop │
│& Strategy│  │Matrix    │  │Reaches 15%││Formed      │
│         │   │Established││         │   │         │
└─────────┘   └─────────┘   └─────────┘   └─────────┘
   │               │               │               │
   ▼               ▼               ▼               ▼
Short-term (1Y) Medium-term (2Y) Long-term (3Y)  Long-term (4Y)

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The current situation where self-owned IP revenue accounts for only 4% of Grandpa’s Farm’s total revenue is essentially a

. Against the backdrop of intensified competition in the baby food industry and increased consumer demands for brand trust, the sustainability of this model is challenging.

The key to resolving authorization dependence lies in

. Specific paths include: developing exclusive IP assets, building content operation capabilities, strengthening supply chain autonomy, and incorporating IP assets into the enterprise valuation system. It is expected that with 3-4 years of systematic investment, the proportion of self-owned IP revenue can be increased to over 15%, forming a “Product + IP” dual-driven development model.

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[1] 21st Century Business Herald. Gross profit margin reaches 57% but “heavy marketing, light quality control”? Grandpa’s Farm sprint for HKEX listing. 2026-01-08. https://www.21jingji.com/article/20260108/herald/bd1054c60bf650d8a2238aa7d4e6c777.html

[2] The Paper. “Grandpa’s Farm” seeks IPO: A “European national complementary food brand” founded in Guangzhou by an all-Chinese team. 2026-01-07. https://www.thepaper.cn/newsDetail_forward_32327943

[3] Caixun Net. “Grandpa’s Farm” goes for HKEX IPO: Annual revenue exceeds RMB 800 million, strengthens R&D and production capacity to build core barriers. 2026-01-07. https://mtz.china.com/touzi/2026/0107/211823.html