The next battlefield for the food giants is going to be handed over to the second generation of women.

 The next battlefield for the food giants is going to be handed over to the second generation of women.

After more than 20 years of dividends, Chinese food giants have begun to transform passively or actively in recent years. As a generation of entrepreneurs gradually retire or intend to engage in battle, the second generation of these family businesses also step forward to accept or reform or continue the challenges.

01 Wahahas Princess

On April 8, 2019, enterprise survey information showed that senior management of Hangzhou Wahaha Beverage Co., Ltd. had changed the record, general manager Zhang Honghui resigned as general manager, and Huang Minzhen resigned as director. After the change, Cai Lei became the new manager and Jiang Lijie was the director. At present, the companys five management personnel are chairman Zong Qinghou, director Wu Jianlin and Jiang Lijie, supervisor Guo Hong and manager Cai Lei.

Zhang Honghui worked in Hu Qingyutang, an old name in Hangzhou, and was transferred to Wahaha by Zong Qinghou. On April 8, in addition to leaving Wahaha Beverage Company, Zhang Honghui also stepped down as manager of Hangzhou Wahaha Hongzhen Packaging Co., Ltd. At present, Zhang Honghui is still a shareholder of Hongan Yongsheng Investment Co., Ltd. with a 10.9% stake, and serves as the director of Hangzhou Wahaha Medical and Health Products Co., Ltd.

Although Zong Qinghous daughter Zong Fuli did not appear, with the resignation of the seniors, this is also considered to be a further step in the transformation of Wahahas management to a younger age.

After 80, 90, probably no one has not drunk Wahaha, and can not escape AD calcium milk, but also eight treasures porridge, drinking water. Drinks are the main front of Wahaha. At present, its products mainly cover protein drinks, packaged drinking water, carbonated drinks, tea drinks, fruit and vegetable juice drinks, coffee drinks and so on.

According to its official website, Hangzhou Wahaha Group was founded in 1987. In April 1987, Zong Qinghou contracted the Distribution Department of school-run enterprises in Shangcheng District to start by selling soda, ice lolly and stationery paper on commission. In July of the same year, Zong Qinghou set up the Hangzhou Baoling Childrens Nutritional Food Factory.

In 1991, Wahaha merged with Hangzhou Canned Food Factory, an old state-owned factory, for a fee of 80 million yuan. In the second year, Wahahas sales revenue and profits and taxes more than doubled.

In the course of Wahahas development, it experienced the famous Dawa Debate.

In 1996, Wahaha entered into a joint venture with Danone Group of France, introducing US$43 million at one time, and jointly established five joint ventures. According to the Wahaha side, in 2006, Danone HoldingsLe Baishi lost money for several years. Danone proposed to buy Wahaha non-joint venture company at a low price of net assets. Wahaha refused. Danone has initiated a series of lawsuits and arbitrations against Wahaha and its affiliates in Sweden, the United States and other places. After Wahaha won the lawsuit, the two sides finally signed a package of reconciliation agreements in Beijing on September 30, 2009.

In recent years, Wahaha has undergone many transformations in its development process, including childrens wear, milk powder, retail, liquor, no-one convenience stores and so on. Now it has to be a robot. On March 27, 2019, Zhejiang Wahaha Intelligent Robot Co., Ltd. was registered and established.

In addition to transformation, Wahahas other market focus is on successors.

Zongfuli, the princess of Wahaha Group, entered the Wahaha Group after returning to China. She has been the deputy director of the Management Committee of Xiaoshan No. 2 Base of Wahaha Group since 2005, and the general manager of Wahaha Childrens Wear and Kaqiana Daily Chemical Co., Ltd. four months later. Hongsheng Beverage Group has been in charge since 2010.

In 2018, Zong Fuli took up the post of Minister of Brand Public Relations of Wahaha Group, in charge of packaging and brand promotion of Wahaha products. Let young people to make the aging brand younger, I am afraid it is also the current Wahahas change of thinking.

Another direction that we are keen to discuss is the future action of Wahaha in the capital market under the leadership of Zongfuli. For 30 years, Wahaha has insisted on not going public. But in May 2017, Zong Fuli led a merger. Hong Kong-stock company China Candy Bulletin said that Zong Fulis offer of about HK$573 million was a huge stock price. Three months later, the offer failed and Zong Fuli lost the first battle in the capital market.

In August 2018, Zong Qinghou, in an interview with 21st Century Economic Report, said, I think as an enterprise, the stall can not be paved too big. We insist on running at a small pace. As for listing, we are not short of money now. If we want to go on projects that require large investment in the future, we can also consider listing. If the listing does not allow shareholders to make money, it is not a healthy stock market.

Although Zongfuli has not yet taken the lead, Wahahas capital market is also worth looking forward to after Zongqing Hou Songkou.

02 Zhuyuan

Compared with Zongfuli who took office calmly, Zhuyuan who took over Yurun Group in the wind and rain seemed to be in a hurry.

On March 27, Yurun Food announced its 2018 earnings at the same time. Zhuyuan, daughter of Yurun Food, succeeded Yu Zhangli and Li Shibao as executive director, chairman and CEO of Yurun Food.

Yurun was founded in 1993, headquartered in Nanjing. Its business includes food, real estate, commerce, logistics, tourism, finance and construction.

The rain that Zhu Yuan got at this time point obviously has some scenery no longer. According to the financial report, Yurun Foods revenue in 2018 was HK$12.651 billion, an increase of 49% over last years 12.257 billion, gross profit of HK$965 million, but net loss of HK$4.759 billion.

At the end of January this year, Zhu Yicai, the former richest man in Jiangsu Province and the actual controller of Yurun Department, regained his freedom after being detained for three years and ten months.

On the evening of January 22, the Central Market (600280.SH) announced that Zhu Yicai, the actual controller of Nanjing Central Market (Group) Co., Ltd., had returned home after receiving notification from Zhu Yicais family members on January 22. Zhu Yicai is the actual controller of the company. At present, he does not hold a position in the company. The companys operation is normal.

In the morning of January 21, the Hangzhou Intermediate Peoples Court decided that Zhuyi Finance Offender intentionally destroyed accounting vouchers. Because the detention time had already been converted to the term of imprisonment, he decided to be released from surveillance and residence.

Previously, Zhu Yicai was charged with bribery, breach of trust, damage to the interests of listed companies, and intentionally destroy accounting vouchers. He was prosecuted by the Hangzhou Peoples Procuratorate to the Hangzhou Intermediate Court in January 2018.

Zhu Yicai actually controls two listed companies, namely Yurun Food (01068.HK) listed in Hong Kong Stock Market and Central Market (600280.SH) listed in A Stock Market. On March 27, 2015, the central shopping mall announced that Zhu Yicais family members had been notified on March 26, and the procuratorial organ had implemented compulsory measures for Zhu Yicai, the chairman of the company, to monitor his residence at a designated residence on March 23, 2015. Since then, Yurun Food and the central shopping mall have fallen into debt crisis, and the group is facing bankruptcy and restructuring. Rain Run Food fell from HK$2.13 per share when it resumed trading on April 8, 2015. Its opening offer on January 21 was only HK$0.76 per share.

On January 21, after the judgment of Zhuyi Finance Case, Yurun Food rose by 8.97% on that day. Central shopping malls also rose 3.55% on January 22. However, the industry is more concerned that Zhus detention in recent years is a critical period of consumer upgrading. After the return of the former steering officer, whether Yurun can recover and where is the future?

Yurun began to fall into debt crisis in 2015, and is constantly facing lawsuits and defaults. Tian Eye Check shows that there are more than a dozen pieces of information about execution, dishonesty and judicial assistance of Yurun Holding Group Co., Ltd. and more than a hundred pieces of legal proceedings, most of which are contract disputes caused by non-payment on time.

In November and December 2018, the central shopping mall announced that owing to disputes over the contract of transfer of creditors rights, 644 million shares (56.01% of the companys total equity) held by Zhu Yicai and Jiangsu Dihua were frozen on a waiting basis.

The performance of the two listed companies was also hampered. Rain Run Foods earnings for 2017 showed that its annual earnings were about HK$12.257 billion, down 27.8% from the previous year, and its net profit loss was HK$1.915 billion. According to the semi-annual report of the Central Market in 2018, the operating income of the first half of 2018 was 4.1 billion yuan, down 7.1% from the same period last year. The net profit of shareholders belonging to listed companies was 0.7 billion yuan, down 71.13% from the same period last year.

After Zhu Yicai was detained, the whole Yurun has fallen into a very passive situation. The market share has also been reduced a lot in recent years, and has been robbed of a lot of market share by Golden Gong and Shuanghui. Zhu Danpeng, an analyst of Chinas food industry, said in an interview with the 21st Century Economic Report on January 22 that Zhu Yicais return would support Yuruns resurgence. Before Zhus accident, Yurun Group was a diversified development enterprise integrating food, logistics, commerce and real estate businesses. After the tight capital chain, Yurun also collected non-food sectors. Shrinkage is more conducive to the development of the whole rainy season.

Zhu Danpeng believes that after Zhu Yicais return, we should reorient Yuruns future development direction and strategy, possibly focusing our business on the food sector of our parent company. As far as the food industry is concerned, the market opportunities are still there, because pork is the most basic demand in China.*

In terms of location, the three major meat products companies in China have the best location advantage in East China in terms of Rain Run theory. He said that for Yurun, the key issue is how to re-layout the top-level design, marketing strategies and channels, and optimize and upgrade the whole product structure according to its own location advantages and the original brand and channel advantages.

Yurun said in the earnings report that in 2018, Chinas meat market competition environment continued to be fierce. Affected by factors such as cost, total capacity, demand and African swine plague, pork prices declined from the beginning of the year to a slight correction in the second half of the year, and the impact of African swine plague on pig cross province transport, resulting in regional differentiation of pork prices. The annual pork output was 54.04 million tons, down 0.9%. Under the influence of economic environment and the instability of pork market, the operation of enterprises in the industry has a certain degree of impact.

For Zhu Yuan, who is in danger, the challenge may be more than that. At present, there are no more public achievements to show Zhu Yuans leadership ability. According to the announcement, Zhu Yuan, 32, holds a Bachelors Degree in Business Economics and Finance from the University of New South Wales and a Masters Degree in Business Administration from Sydney University of Science and Technology. In the qualification examination for securities and futures practitioners, he has passed the examination of Volumes 1 and 6. Before joining the group, Miss Zhu has more than six yearsexperience in human resources, financial analysis and investment.

03 New Hopes New Head

In addition to the two daughters who participated in the management of the company at different times, two daughters of private food giants appeared in the public eye in completely different styles.

One is Liu Chang, who is quite high-profile.

On January 25 this year, New Hope Dairy (002946.SZ) officially listed on the Shenzhen Stock Exchange. This is the second time that Liu Yonghaoshi, chairman of New Hope Group, has come to the Shenzhen Stock Exchange to ring the bell in 20 years. In 1998, New Hope (later renamed New Hope Six Harmony) was listed on the Shenzhen Stock Exchange, opening up the capital road of New Hope Group.

With the new dairy industry officially listed, Liu Yonghaos listed companies increased to three, and his daughter Liu Chang attended the bell ringing ceremony. At present, Liu Chang is also in charge of New Hope Six Harmony. The new dairy prospectus shows that he has Singapore nationality.

Liu Yonghao and Liu Chang are the co-actual controllers of the new dairy industry. As of June 30, 2018, Liu Chang owned 72.8844% of the new dairy industry through Universal Dairy Limited and Liu Yonghao held 17.4914% of the new dairy industry through New Hope Investment Group Limited. After the listing, Liu Yonghao and Liu Changs family in the new dairy industry amounted to 5.45 billion yuan.

According to the prospectus, the new dairy industry has issued 85.3711 million shares, with a price of 5.45 yuan per share and a total fund of 465 million yuan. On the first day of listing, the stock price climbed to 7.85 yuan per share, up 44.04%.

New Hope Group was founded in 1982. According to its official website, New Hope Group owns more than 600 molecular companies in more than 30 countries and regions around the world, employs more than 70,000 people, has assets of nearly 200 billion yuan, and annual sales revenue of more than 130 billion yuan. In addition to the agriculture and animal husbandry industry, it has entered many industries, such as fast food consumption, agricultural science and technology, real estate, culture and tourism, medical health, financial investment and so on.

Unlike the first two, Liu Chang has been in charge of the new hope independently for more than six years, a proper successor.

An important feature of the new dairy industry is that it has many sub-brands and has different brands in different regions. This comes from its own brand strategy. Since the new dairy industry started from 2B at first, after crossing the border to 2C, it will be much easier for the new dairy industry to expand by acquiring the influence of local brands in the region.

But there are also market voices that believe that too many brands will affect consumersperception of the new dairy industry.

New Hope Group was first based on agriculture, then diversified development, the opportunity to enter the dairy industry is different from many enterprises. Through mergers and acquisitions and restructuring, we can link regional brands for joint development, said Chairman of Xinhope Dairy Co., Ltd. when he was listed on the market.

He believes that behind multi-brand, there can be a unified logic, and there are differences and similarities among different brands. How to develop this generality and form a common strategy is the key to the new dairy industry. The important way to realize multi-brand strategy is merger and acquisition.

The key point of M&A is whether there is a strong team and advanced management methods after M&A. After M&A, the value of the acquired brand and parent company can be improved through team integration and integrated operation.

From agriculture and animal husbandry to dairy industry, Liu Chang has to steer a more diversified business.

In 2016, Liu Chang spoke at Guanghua School of Management, Peking University about her personal experience and future vision of the whole strategy of new hope. She said that the growth of new hope is accompanied by the whole trajectory of her personal growth. In the future, new hope will open the breeding and consumption sides and become the food kingdom.

04 Xu Yangyang

Finally, the second generation of the female fathers career is the lowest exposure, compared with Liu Chang, a lot of low-key.

On March 27, Dali Food, a listed company in Hong Kong, released its performance report for 2018. In 2018, Dali Food realized revenue of 20.064 billion yuan, an increase of 5.4%, gross profit of 8.05 billion yuan, an increase of 8%, gross interest rate of 38.6%, net profit of 3.717 billion yuan, an increase of 8.3% and net profit rate of 17.8%.

Dali Garden buns, Kobick potato chips, Eat more if you like, and its regular herbal tea, as well as Sun Lis soybean milk on TV, for most consumers in China, these advertisements and brands that used to or are now overwhelming should not be unfamiliar; but relatively few people will associate all the above brands.

They belong to the same company, Dali Food Group. Compared with the popularity of single category, the image of Dali Group is little known, which is related to Dali Groups multi-brand strategy against market competition and relatively low-key founding family.

In September 1989, Xu Shihui, the founder of Dali Group, founded Huian Meili Food Factory, the predecessor of Dali Group, in Quanzhou, Fujian Province. Its first product is Meili Brand biscuits. At that time, when food was generally weighed in bulk, Merrill began to use relatively exquisite packaging, opening up the market. In August 1992, Fujian Huian Dali Food Co., Ltd. was established and began to use the name Dali.

Thereafter, Dali began to expand its scale and set up branches all over the country, and now has 21 branches. It has constantly introduced new categories and adopted multi-brand strategy. It has leaped from pastries, biscuits and other leisure foods to beverage industries. Zeng Xucong, head of brand media planning department of Dali Food Group, said in an interview with 21st century economic reports that it has become a single category in China. The first three, from the Dali Park to the mass leisure food to the functional drinks like Lehu, we are constantly looking for different categories of development space.

Dalis strategy is to enter a new category.

In April 2017, Dali Food Group launched the soybean milk brand. According to Zeng Xucong, Xu Shihui did a lot of research and taste research when he proposed to make soybean milk.

The first choice of breakfast for Chinese people is soymilk and soybean milk, which are also drinks in the east, west, north and South regions. According to data provided by Zeng Xucong, the dietary habits of Hong Kong are close to those of the mainland. The income of the largest soymilk company in Hong Kong in 2015 is over 1.7 billion, and the population of Hong Kong is over 7 million. The population of the mainland is nearly 1.4 billion, 200 times that of Hong Kong. If the ratio is equal, the mainland soymilk market may reach 100 billion.

On the one hand, compared with the same kind of milk, the size of Chinas milk market has exceeded 300 billion yuan, and the average annual consumption of liquid milk in China is 33 kg. However, there are as many as 30% lactose intolerant people in China. Soybean milk is a better choice. Zeng Xucong said, On the other hand, the domestic soymilk industry is still in a very early stage, production environment, technology, products are not up to standard, lack of leading brands, these are opportunities.

Dali also has high hopes for Douben Bean. According to Dali, it has achieved 700 million bags of sales in 2017. This year, it will gradually expand its distribution network and channel sales. This year, the target is set at 20-30 billion yuan.

Doubens are listed in the Hong Kong market at the same time. Dali sees it as an opportunity to open up the external market. Domestic market is still the main market, but both Hong Kong and Southeast Asia are going to develop in the future. At the same time, Hong Kongs supply is also a test for us. Our products and standards for the Mainland and Hong Kong are the same, and no special supply is required.

Douben Bean is actually the only product not to follow the trend of Dali Group. It has its own clear brand, market positioning and consumer group positioning. The direction of transformation is right, but in the process of development, some of its marketing strategies do not match the practices of big brands, and also cause some indirect losses, such as excessive inventory, unsalable products of distributors, cost write-off and other issues, manufacturers and distributors have problems. Zhu Danpeng pointed out, This may be the pain and experience that many Chinese private enterprises have to experience, which is a relatively normal phenomenon. Under such circumstances, how to solve the matching degree of different markets, brand precipitation, consumer awareness and promotion issues is the key to the overall sound operation.

Behind the transformation, Xu Yangyang, the second generation of the company, has little publicity. In addition to his daughter Xu Yangyang, Xu Shihui has a son who died in a car accident many years ago.

In November 2014, Xu Yang was appointed Director of Dali Group as Vice President and Executive Director of the Group.

In the past two decades, through the marketing system of high-profile celebrity endorsement and traditional marketing channels, a large number of advertisements have been put into the market, which has sunk to the third and fourth lines. It seems that the similar tactics of local food enterprises have been adopted.

According to Bains China Shoppers Report, the growth of Chinas fast-moving consumer goods market is still slow. In the first half of 2018, Chinas fast-moving consumer goods industry entered a period of overall growth slowdown, during which the total expenditure of urban shoppers on fast-moving consumer goods increased by only 3.3%. The growth of personal and family care consumer goods was much faster than that of food and beverages.

The market weakness that began in 2011 lasted until the first half of 2017, forcing brands to gain market share through innovative ways to increase penetration in households. Among them, the sales of food and beverage products continued to grow negatively in the past two years.

The traditional channels on which food companies rely most are not optimistic, with sales growth in big stores falling by 2% and growth in supermarkets and small supermarkets falling to 2%, only slightly higher than inflation. Conversely, convenience store sales grew by more than 7%. E-commerce channels continue to flourish, with sales growth exceeding 52%. Local brands have won the competition in personal care category, while foreign brands have increased their market share in food and beverage category.

After harvesting huge demographic dividends and obtaining strong cash flow, local food enterprises are facing challenges such as upgrading and optimizing their own brands, strengthening external e-commerce channels, decreasing consumer loyalty and accelerating changes in taste. How to find new profit growth points and brand driving forces?

Zhu Danpeng said in an interview with New Health 21: Private enterprises in China have experienced many twists and turns in the development of fast consumer goods. For example, in the past, Dada used the strategy of one or two big brands to hit the market of three or four lines. This kind of dislocation marketing is relatively easy to succeed. But after a stage, the brand will always go back to the second line to do brand upgrading, innovation or transformation, but for many local enterprises, they are also facing the challenges and shortcomings of insufficient brand precipitation, inadequate consumer education, market mismatch and so on.

These problems should also be the challenges faced by the above-mentioned (quasi) women leaders in the future.

Source: Responsible Editor of 21st Century Economic Report: Qian Juanxiao_NBJ10675