Author/ Author of "Finance and Economics" Weekly Zhao Zikun
Editor / Chen Fang
In early March, the trash can at the feet of Yuanqi Forest employee Ah Qiang disappeared.
Ah Qiang used to be able to throw garbage with his hand raised, and now he must stand up and walk to the garbage concentration point to throw it away.
Since the beginning of spring, the Yuanqi forest has also changed paper towels and stationery - the paper towels that were originally placed on the public table have become fewer and thinner, and the stationery is no longer available in unlimited quantities. The most exaggerated thing, Cuong said, was that for a period of time the double-layer toilet paper in the toilet became a single layer, and it broke when it was pulled. Multiple employees found that the property had also changed and the front desk was outsourced, and they felt that these were signs that the company was shrinking.
Also "shrinking" is the senior management team of Yuanqi Forest. On March 31, Liu Zhen, one of the senior executives of Yuanqi Forest, was exposed by a number of media to have left her job in early March, and she had been in charge of overseas business for only more than a year in Yuanqi Forest. Informed sources told the "Finance and Economics World" weekly that Liu Zhen's departure was hasty, and even an internal letter was not sent. An employee who did not want to be named revealed that in fact, Liu Zhen had left his job as early as the end of last year, "just keeping feishu and not wanting to attract attention from the outside world." ”
According to China Entrepreneur, Liu Zhen is the third executive of Yuanqi Forest to leave in half a year, and in the second half of last year, Yuanqi Forest has two senior executives left, one is Zong Hao, vice president in charge of brand operations, and the other is Ran Hao, vice president in charge of human resources, who was the human resources director of Luckin Coffee.
At the same time, Yuanqi Forest is still moving its organizational structure. Caijing Tianxia Weekly learned from different sources that there are many departments in Yuanqi Forest that have been abolished or adjusted, such as the Merger business department under the business center was merged, and its information flow and live broadcast business functions were adjusted to the digital marketing department; the innovation incubation center was abolished, and the WOW business department was transferred to the core business segment.
All kinds of signs prove that the star enterprise of Yuanqi Forest is quietly slimming down.
Quietly optimize employees
Like many Internet companies, Yuanqi Forest is also working on optimizing the personnel structure. Since March 31, a number of former employees have said that they have been forced to leave their jobs due to the adjustment of the organizational structure of Yuanqi Forest.
A young employee found that the boss of the training department he was familiar with had left. "We were still talking before, the performance is not good, the company will definitely cut the department, who is the least profitable to cut who first."
The news that "Yuanqi Forest will have three rounds of layoffs" has been circulating within employees for a long time. As a result, some employees who have left long ago were not surprised to hear the news of the layoffs at the end of March, thinking that this is a very normal thing in the Yuanqi Forest.
An operations employee, who did not want to be named, recalled that the colleagues he docked with had been changing. "Basically change some people in two months, and the shortest one comes for a week or so and leaves."
According to the "Finance and Economics" weekly, the frequency of organizational adjustment of Yuanqi Forest is about once a quarter, and frequent changes make some employees feel that they are doing useless work. An employee in charge of the business media complained that the plan was repeatedly overturned, the needs were changing at any time, and that the cooperation was decided, and that it would not be done if it was not done. An employee in Shanghai recalled that many times a project was changed before it was completed, and it was often overturned and restarted.
The restructuring followed by the turnover of employees. An employee of the brand center of a business unit who did not want to be named revealed that there were more than 200 people in the department in May 2021, and after two adjustments, there are now less than 100 people.
Another employee revealed that since joining the company in March last year, colleagues around him have changed blood for a large circle. When he came in, the number was about eight or nine thousand, and now the number has become eighteen thousand, and the total number of employees is more than nine thousand. "This shows that the Yuanqi Forest has almost replaced half of the people."
Image source: Visual China
Last year, in order to develop rapidly, Yuanqi Forest dug up a lot of people from established FMCG enterprises. According to media reports, from December 2020 to November 2021, the total number of employees in Yuanqi Forest expanded by nearly 50% to 6,000, of which more than 70% came from traditional catering companies, but now some of them have left.
Hou Ran, who worked in Yuanqi Forest for half a year, once worked in a well-known foreign-funded FMCG company, she jumped to Yuanqi Forest, tired of the lifelessness of traditional FMCG enterprises, wanted to come to this high-speed development company, learn some new knowledge, but eventually left due to disappointment.
In addition to digging people, Yuanqi Forest also recruits fresh graduates from the campus on a large scale, intending to train into management trainees. However, according to the recollection of a management trainee left behind, in 2021, Yuanqi Forest recruited in two batches of pipe trainees, with a total of nearly 100 people, but now there are only more than 30 people left. Hou Ran said that as of the time of his departure, only one of the pipe trainees recruited by Yuanqi Forest before 2021 remained.
According to informed sources, a Yuanqi Forest executive once revealed at an internal meeting that the number of management trainees left behind is not important, just leave one or two capable ones.
The above-mentioned operation employees said that the employees who left the Yuanqi Forest had various reasons, some were laid off, and some felt that the atmosphere was not good and could not realize their self-worth and took the initiative to leave.
The laid-off employees ran to the pulse to complain. An employee who was laid off on April 1 said that Yuanqi Forest Manpower's recent business volume is very heavy, and he needs to talk with the laid-off employees one by one. There are constantly people on the pulse complaining that they are being interviewed by human beings. One employee revealed that the layoffs, although sudden, were compensated and given time to find a job. Overall, compared with the layoffs of the big Internet factories that are making a lot of noise, Yuanqi Forest is much milder.
For the layoffs, the "Finance and Economics" weekly checked with Yuanqi Forest, and the other party stressed that this is a normal optimization adjustment.
Hou Ran, who took the initiative to leave, was mainly not accustomed to the personnel quarrels between various departments of the Yuanqi Forest, believing that cross-departmental cooperation was too energy-consuming and could not learn new knowledge. "Yuanqi Forest has some department managers, who are inextricably linked to the boss, and are basically some of the boss's business partners, people introduced to investing in and acquiring other enterprises."
Several employees of Yuanqi Forest confirmed that the parachuting of leaders in some departments often happens.
Failed to achieve the 7.5 billion target?
Unlike some Internet manufacturers who only come and go, at present, in the recruitment software, the recruitment of Yuanqi Forest is still continuing. But a person close to Yuanqi Forest revealed that most of the recruitment is for sales positions.
According to the "Finance and Economics" weekly, the importance of channels in the structure and function adjustment of Yuanqi Forest has been emphasized again. Under the middle and back office business sector, a new first-level department "Intelligent Terminal Division" is set up to be responsible for the development, operation and maintenance of commercial terminal equipment (such as display cabinets, retail cabinets and other products); the marketing center has set up a number of new departments to be responsible for channel business.
This is related to the strategy of re-selling channels in Yuanqi Forest this year. A number of Yuanqi Forest employees said that from this year's adjustment, it can be seen that the company's purpose of focusing on business is more obvious.
In the eyes of internal employees, this is not unrelated to the fact that Yuanqi Forest did not complete last year's sales target.
As the hottest star enterprise in the new consumption field, Yuanqi Forest has been favored by many capitals. In April 2021, Yuanqi Forest had a round of strategic financing of about $500 million, when the company was valued at $6 billion. In November 2021, Yuanqi Forest completed a new round of nearly US$200 million financing, led by Temasek, followed by sequoia China, Warburg Pincus Capital and other old shareholders, with a post-investment valuation of US$15 billion. In half a year, the valuation of Yuanqi Forest has risen by 2.5 times.
However, the strange thing is that after the end of 2021, Yuanqi Forest failed to announce its annual sales as scheduled. A person close to the top level of Yuanqi Forest told Caijing Tianxia Weekly that the company's sales of 7.5 billion yuan set last year were far from reaching. "The whole sparkling water accounted for 3.5 billion yuan, the alien (its energy drink brand) accounted for 7.8 billion yuan, and all the other side lines added together are about 1 billion yuan, so the total is more than 5 billion yuan."
This is not unrelated to the front and back of the beverage giant, and the various flavors of sparkling water on the market are currently on the shelves. Yuanqi Forest, which started from the outbreak of a single product, tried to develop in the direction of multiple categories, but its products failed to replicate the popularity of sparkling water. An employee revealed that after hearing a high-level discussion, the company revised the original logo of "0 sucrose and low fat" to "low sugar and low fat" in April last year, and the sales of milk tea fell sharply, "not even half of the expected target."
"The expectations of the capital side are very high, but the overall growth of Yuanqi Forest has not met expectations, so the overall performance pressure of Yuanqi Forest is very large." Food and beverage analyst Zhu Danpeng analyzed that the big items of Yuanqi Forest are just sparkling water, and other products have not run out.
Zhu Danpeng believes that the sales target of 7.5 billion yuan in Yuanqi Forest in 2021 is a bit unrealistic, which is doubled on the basis of 3 billion yuan in 2020, which completely violates the development law of the entire industry, "The FMCG industry and the Internet are fundamentally different, and goods must be sold little by little to achieve results." ”
"From the introduction of new products to the growth to maturity, it has a time period, even if Yuanqi Forest produces ten products in 2021, it is impossible to increase by 4.5 billion at once." Zhu Danpeng added.
Did Genki Forest fail to achieve its performance targets in 2021? The weekly "Finance and Economics World" verified with Yuanqi Forest, and the other party said that it would not comment. But the other side stressed that they have not released specific data, which only the top can know.
However, "cost reduction and efficiency increase" has become the key word of Yuanqi Forest. Not only are people attrition, but budgets are also decreasing. A Yuanqi Forest employee in charge of business media admitted frankly, "Many projects have been cut, including advertising, foreign cooperation, etc., to let us take the road of 'not spending money on marketing'." ”
According to Sina Finance, last year, the year-end awards of the main departments of Yuanqi Forest were not issued, and the year-end awards received by front-line employees were also greatly reduced compared with previous years. An employee complained on the pulse that he was originally attracted by 14 salaries, but he did not expect that the final year-end award was not issued.
Under the pressure of performance, the resources and money that each business line of Yuanqi Forest can get are less. "Maybe in the past a project of 3 million yuan, this year there is only a budget of 1 million yuan, we can only cut some partner resources." An employee revealed.
This is in stark contrast to the previous wealth. During the Winter Olympics, Yuanqi Forest's "three in three" was on the hot search, and the three spokespeople they signed, Gu Ailing, Xu Mengtao and Su Yiming, all won gold. An internal employee revealed, "At that time, our marketing investment in bubble water was at no cost, you only saw three wins, but we signed everything that we could sign." ”
Difficulties in developing into the medium term
Founded in 2016, Yuanqi Forest is a new consumer giant that has attracted a lot of attention.
Anyone who has visited Yuanqi Forest's headquarters in Liangmaqiao, Beijing, will admit that this is a young, dynamic company. Bright tables, open office areas, groups of young faces gathered for a heated discussion. Knowingly, in the post sharing the internship situation in Yuanqi Forest, some people also listed the "temptation" conditions of free snacks, three meals, flat atmosphere and similar internet manufacturers.
Using Internet thinking to make consumer goods is the reason for the rapid growth of Yuanqi Forest, and it is also the reason why it has attracted a large number of young people to join. Tang Binsen, the founder of Yuanqi Forest, has repeatedly said in public that he wants to recruit young people with idealism. Many employees who joined Genqi Forest admitted that they were initially attracted by the "vision" and recognized the concept of "Chinese better consumer goods".
Hou Ran, a former employee, said that he went to interview a famous clothing brand, and the other party asked her how the atmosphere of the Yuanqi Forest was, mentioning that many young people wanted to jump over, "Before it was not the title B station, it was still very attractive to young people." ”
But after actually joining the Yuanqi Forest, the situation was not the same as imagined. Hou Ran said that within the company, the overall style tends to "run first". A solution, whether it is perfect enough, in order to grab time or quickly verify, do it first. "One word that people often hang on their lips is also very Internet - iteration."
Internet thinking runs through the entire Yuanqi Forest from top to bottom. Tang Binsen once shared in a public statement that he believes that the Internet thinking is to consider the value of users, rather than considering whether they earn money or not.
"Today, if food and beverage companies can do things like Yuanqi Forest, R&D personnel, product personnel, and sales personnel do not know how much gross profit there is when they go public, and after about two or three months of financial calculations, I think this company is really a good company, and we are like this." Tang said in an interview with the FBIF team.
Tang Binsen also mentioned in public that some departments of Yuanqi Forest have a trial and error budget of tens of millions of yuan a year. As long as you can find the best solution, you can do whatever it takes. A former employee of Beihai Ranch (a dairy product owned by Yuanqi Forest) recalled that the production cycle of a certain jam was only two or three months a year, because it felt that the quality was good, there was no substitute, and under the premise of no sales feedback, it booked a whole year's jam production capacity, "this side is not about the cost."
In terms of management style, Tang Binsen himself highly respects ByteDance, not only changing DingTalk to Feishu, adopting OKR management, opening monthly review meetings, but also often forwarding articles analyzing ByteDance in the employee group. He attaches particular importance to "data-driven" and has repeatedly stressed that "we also have to speak with data".
But like ByteDance, which promotes a flat system, there is also a situation of middle-level embarrassment inside the Yuanqi Forest. A number of Yuanqi Forest employees feedback that although Yuanqi Forest has recruited some middle-level people from traditional FMCG enterprises and wants to use their experience and methodology to help the development of Yuanqi Forest, the top management is not very willing to listen to the middle level, feeling that their ideas are a bit out of step with the times.
Once, most of the decision-making and approval of Yuanqi Forest ended in the person in charge of Amoeba. This is the business model summarized from the famous entrepreneur Kazuo Inamori, that is, the company is broken up and split into financial independent accounting units. According to the official introduction of Yuanqi Forest, the person in charge of Amoeba is fully responsible for this team, deciding how to arrange the bonus of the whole team, how to adjust the personnel, and how to plan the business.
In the early days of entrepreneurship, this model really helped companies run faster. Businesses are growing fast, and everyone is motivated. However, as the Yuanqi forest stalls are getting bigger and bigger, when it comes to fighting real knives and guns offline, Internet genes cannot solve real market problems. In order to improve efficiency, at the end of last year, the Yuanqi Forest Amoeba system was replaced by the "big middle platform, small BU" model.
At the same time, the importance of channels is also placed in front of the stage. After the upgrading of Yuanqi Forest's self-built production capacity in 2020, the original convenience stores and hypermarket channels are not enough to digest so much production capacity, but to expand to offline channels as fine as capillaries, Yuanqi Forest needs more traditional and more experienced people.
This is also why Yuanqi Forest recruits a large number of sales personnel, "Finance and Economics" weekly saw on a recruitment website, April 2 Yen Gas Forest in Huaibei, Huangshan, Huaihua, Hengyang and other cities a large number of recruitment of sales representatives, recruitment requirements are very low, some even do not need to have work experience, the monthly salary is six thousand to eight thousand yuan.
An employee of Yuanqi Forest revealed that the organizational structure adjustment at the end of 2021 showed that Tang Binsen was personally grasping channel and sales management.
The environment of contraction, the competition of encirclement and suppression
The quiet slimming of Yuanqi Forest is also a microcosm of the difficult life of the current new consumer enterprises.
Since last year, the life of new consumer enterprises has not been very good. A number of new consumer brands such as Cha Yan Yue, Xi Cha, Wen He You and so on were exposed to layoffs, and the listed companies such as Nai Xue's tea and Perfect Diary made huge losses, and the market value shrank significantly.
Recently, Tsingshan Capital, an angel investment institution focusing on consumer investment, released an article "Tsingshan Capital: Dear Consumer Entrepreneurs, Please Recognize reality" in the consumer circle, which emphasized that the common problems faced by consumer entrepreneurs at present are: products cannot be sold, capital is on the sidelines, and explosive products are difficult to copy...
Under the wave of consumer investment in 2020, a large number of people and money poured into the consumer market, and under the slogan of "consumption upgrading", entrepreneurs are gearing up to "do all consumer goods again". However, the first batch of new consumer listed companies did not perform well in the secondary market. In the primary market, the focus of RMB funds has shifted to technology and carbon neutrality, and it is difficult for US dollar funds in the shadow of the Chinese stock crisis to have enthusiasm.
New consumption is cold, there is less money on the market, and investors' money bags are tighter. No one can be sure whether the money that has been invested will be able to raise a satisfactory enterprise, and the tide of capital will come quickly. According to the statistics of Tsingshan Capital, in the first quarter of 2022, there were only 170 consumer track investment events, down 56% from the previous quarter.
A cruel reality is that under the double fading of traffic dividends and capital dividends, many enterprises have no capital to continue to burn money, and star companies that have taken money have to cut back on food and clothing, and if they want to survive, they must find a way to make themselves. The yuanqi forest, which has been valued at $15 billion, needs to prove to the market that it has the ability to make a profit.
But this is not easy, because the story of yuanqi forest being surrounded by giants is intensifying, and the health track is crowded with new and old players: new products made of erythritol are on the shelves; Pepsico and Coca-Cola, two soft drink giants, are rumored to have established a combat policy of "killing" yuanqi forest sparkling water as the core goal at the internal meeting in 2022.
Since last year, the major beverage giants have successively launched "0 sugar" drinks, chasing and blocking the Yuanqi Forest: Coca-Cola's small universe AHHA sparkling water, Wahaha's "angry" sugar-free soda sparkling water, Nongfu Shanquan launched 4 fruity soda sparkling water with 0 sugar in one go, Pepsi's "smile bubble"...
Some powerful enterprises even "stuck their necks" on the Yuanqi Forest at the source, forcing the Yuanqi Forest to spend a lot of money to build factories. Since July 2019, Yuanqi Forest has built its own factories in 5 places, including Chuzhou in Anhui, Zhaoqing in Guangdong, Xiqing in Tianjin, Xianning in Hubei, and Dujiangyan in Sichuan, at an average rate of 6 months, corresponding to the five major urban clusters in East China, South China, North China, Central China and Southwest China. It is reported that the five self-built factories cost 5.5 billion yuan.
At the end of March, Yuanqi Forest's fifth self-built factory in Dujiangyan, Sichuan Province, was put into trial operation, with a total investment of about 1 billion yuan. The sixth factory will also be landed in Taicang, Jiangsu Province, and it is expected that six production lines will be planned, and the annual output value is expected to reach 2.4 billion yuan after being put into operation.
In the heavy asset mode, the weight of the Yuanqi Forest is even worse.
From the source, the rise in the price of raw materials has also choked the life of this "sugar-free" company. Before the listing in 2021, Yuanqi Forest supplier Sanyuan Bio once revealed in the announcement that the domestic erythritol market demand continued to be strong, the product supply was in short supply, and the product price increased rapidly. Upstream enterprise Bowling Bao also issued an announcement that in 2021, the company's erythritol product supply and demand are booming, and the price of erythritol products has increased significantly compared with the same period in 2020.
Yuanqi Forest, which wants to replicate the success of sparkling water, is also constantly trying, launching a variety of products such as milk tea, yogurt, electrolyte water, mineral water, etc., which makes its front line widened, and each market segment has mature players. It is understood that Yuanqi Forest also needs to benchmark Vita lemon tea and make a lemon tea product. An incumbent employee revealed that there are currently two lines doing lemon tea business.
"The main business has not gained a firm foothold, there are too many side lines, and the front line is too long, which is a core reason for the decadence of many enterprises." If you say that when your main business does not exceed 5 billion, it will be very dangerous to rush to carry out the five-plus strategic layout of multi-brand, multi-category, multi-scene, multi-channel and multi-consumer groups. Zhu Danpeng analyzed.
In the context of the new consumption tide, if you want to become a real giant, there are still many lessons to be made up by the Yuanqi Forest.
(The employee in this article is a pseudonym)
This article is originally produced by AI Finance and Economics, an account of Caijing Tianxia Weekly, without permission, please do not reprint it on any channel or platform. Violators will be prosecuted.