Some analysts pointed out to NetEase Finance and economics that Nestles purchase of Yinlu did not focus on the brand of Yinlu food, but on its distribution network over the years. In addition to its headquarters in Xiamen, Yinlu food has five production bases all over the country. Meanwhile, the company has set up 1.2 million retail terminals over the years and has a complete distributor network all over the country, which is the most valuable place in Nestles eyes. After Nestle acquired Yinlu, its original processing plant has become the processing plant of other main products of Nestle, and the sales network that Yinlu was proud of was also used by Nestle to sell other products of the company in the market, so that the Yinlu brand has not launched new products for many years, which is extremely embarrassing..
NetEase Finance and economics also learned that the environment of Chinas food and beverage market has changed rapidly in recent years. With the rapid development of e-commerce, a large number of online food brands and online Red brands have emerged one after another, and some traditional and old food enterprises have been greatly impacted. In this context, with the tightening of Nestles investment in Yinlu brand, Yinlu has lost its former glory. Not only has there been no new products launched for many years, the brand is also seriously aging, and the market competitiveness is greatly weakened.
As for the sale of Yinlu, Nestle said that it chose foodwise to take over Yinlu because it can ensure a smooth transition and ensure the long-term success of Yinlu business. The transaction is expected to be completed by the end of this year. The deal will allow Nestle to focus more on key areas in China: baby nutrition, candy, coffee, seasoning, dairy products and pet care. The company is able to use its strong brand advantages, digital capabilities and innovation engine to drive business growth. .
In addition, as part of the deal, Nestle will retain its Nestle ready to drink coffee business and distribute it in most parts of Greater China, according to Nestle. Nestle coffee is the engine driving Nestles strategic growth, and the company will further strengthen investment in the brand in all channels in China. Nestle coffees overall business in China will be managed by a team, with the help of synergy to strengthen its capabilities and help drive further growth of the business. Yinlu will continue to process and produce Nestle ready to drink coffee products for Nestle and distribute them in some provinces of China. Yinlu will continue to produce and sell Nestle tea extract products under the license of Nestle.
According to NetEase Finance and economics, the brothers Chen Qingqing and Chen Qingyuan, who took over Yinlu again, are also in the process of acquiring some old enterprises that are on the verge of bankruptcy or are heavily in debt. In March last year, Chen Qingyuan newly established xinshengzhou Vegetable Oil Co., Ltd. restructured Shengzhou brand through asset purchase and brand transfer. The total price of the transaction was 420 million yuan. Data show that Shengzhou edible oil is a well-known brand in Xiamen, and once ranked among the top five edible oil brands in China. In 2018, Fujians local grain and oil giant, founded in the 1990s, collapsed with debts as high as 3 billion, and was forced to apply for bankruptcy and reorganization. (Chen Junhong)