"Second-generation succession" is not a new topic. In recent years, with the passage of time, more private enterprises that have accompanied the reform and opening up and the rise of Made in China are experiencing or have completed the "second generation succession".
Jie Liya of the "Towel Prince" family, Joeone, which has recently caused discussion due to the signing of a number of spokespersons, and Dali Foods, more and more second generations are coming to the front of the stage to prepare for the succession.
"When I joined High Fashion, I started as a junior employee. I think that my relationship with my parents is not only a relationship between superiors and subordinates, but also a master-apprentice relationship. Recently, at the "2024 (16th) China Business Mulan Annual Conference", Xu Yangyang gave a keynote speech. As the vice president of Dali Foods, she also has another identity, the daughter of Xu Shihui, the founder of Dali Group, the "King of China's Snack Food".
"Inheritance is the link between experience and responsibility, and innovation requires the courage to break through the shackles and embrace change, so that we can be firm and move forward steadily; With 'heart and focus', we will embrace the trend and create the future. In his live speech, Xu Yangyang also talked about succession and emphasized the importance of "inheritance" and innovation like many people.
Second-generation succession should not be a problem for the development of China's private enterprises. In the view of "A Little Finance", what determines whether a private enterprise can hold on to it is never one or two "second generations", but whether corporate values and innovative spirit can be continued.
brand, if you want to do it, you can do the "top three"
In 1989, reform and opening up continued to deepen. This year, Bank of China became one of the world's top 500 companies, which was also the first time that a Chinese company appeared on the list of the world's top 500 companies. In this year, the spring breeze of private enterprises continued to blow to all parts of the country, and in Fujian, Zhejiang, and Guangdong provinces, a large number of enterprises that later became the mainstay of private enterprises were established.
In Hangzhou, Zhejiang, after the success of Wahaha children's nutrition solution, Zong Qinghou officially established Wahaha Nutrition Food Factory; In Quanzhou, Fujian, Xu Shihui established Hui'an County Meili Food Factory, which is the predecessor of Dali Food...... Today, these companies have become giants in China's food and beverage industry, incubating many household names.
"Thirty-five years ago, in an abandoned army barracks in Hui'an, Fujian, my father raised 7,000 yuan to buy a second-hand biscuit production line and started his business. The rent for that barracks seemed to be 300 yuan a month at the time," Xu Yangyang recalled in his speech about his father's entrepreneurial journey.
At that time, Quanzhou people, who were good at business, sold canned food, fish skin peanuts, and spiced melon seeds produced in family workshops to all parts of the country. Xu Shihui keenly felt the higher demand of consumers for food, and in the case of the popularity of bulk food, he built his own factory to produce beautifully packaged "Meili" brand biscuits, which were sold from Fujian all the way to Chengdu in the southwest and Shenyang in the northeast.
Dali Foods, which tasted the sweetness, has since realized the power of the brand. "In the process of running the market, my father felt that branded products sold better and sold more widely, which gave him the idea of building his own brand," Xu Yangyang said.
The book "Warren Buffett's Moat" introduces four types of moats, which are intangible assets, switching costs, network effects, and cost advantages. In the field of consumer goods, the moat of enterprises is mainly intangible assets composed of brands, technologies, patents, formulas, etc., as is the case with international companies such as Coca-Cola, PepsiCo, L'Oreal, and Estee Lauder.
When the international big names entered, and the domestic enterprises were ignorant and groping, Dali Foods took the lead, invited celebrities and advertised, and successively incubated brands such as Dali Garden, Kebik, and Good Food, and the advertising slogan "Dali Garden egg yolk pie, you take me with you, everyone loves it", "Happy every moment, my Kebik", "Delicious, you will eat more" accompanied by TV into thousands of households.
After taking root in the food field, Dali Foods gradually expanded to other fields. In 2007, the layout of the beverage industry created two brands: herbal tea and Qizheng and functional drink Lehu; In 2017, the layout of the soybean milk industry and the launch of Doubendou; In 2018, the bureau short-term bread industry launched Meibachen.
Moreover, from the beginning of its establishment, High Fashion has insisted on covering the national market, forming a huge and flat sales channel through more than 5,400 dealers and 2.5 million sales terminals, sinking to reach nearly 3,000 county-level markets across the country.
In the past 35 years, Dali Foods has successively built 7 major brands, including Dali Garden, Kebik, Haoyudian, Heqizheng, Lehu, Doubendou and Meibaichen, most of which are well-known national brands, and have achieved the top three market shares in the Chinese market.
"If you want to be a leading brand, you must start from the height of the industry, study the characteristics and personality of each industry, so that each brand can become a representative of the industry", Xu Shihui summarized the brand development path of Dali Foods, which has also become the development path of Dali Foods' brands - to become the "top three brands in the industry".
The productism behind the "three-plate axe".
From Coca-Cola, McDonald's to L'Oreal, these world consumer goods giants are also brand giants, and there is a common characteristic: that is, good products, good advertising, and good channels.
There are three factors in the formation of a consumer brand: first, the product is good; Second, the advertising is well done; Third, the channels can be rolled out. Among them, the product is "1", which is the core that determines how far a brand can go and how much space there is; Advertising and channels are "0", and without product advantages, advertising and channel advantages will be zero.
Coca-Cola's annual marketing expenses basically maintain about 30% of sales revenue, and its marketing expenses will reach $12.8 billion in 2022. Coca-Cola can be found on almost every street around the world. But what really makes consumers remember it is the unique taste imparted by its patented formula.
Dali Foods, which started the road of brand development early, is also well versed in the mystery of the brand. "My father used to say that as long as you put your mind to it, you can't do anything bad. Intentions have always been the core keyword of High Fashion. Creating quality with heart is our core value. Xu Yangyang said in his speech.
Such a problem is often encountered in enterprise management, controlling costs or doing a good job in quality. In 2007, High Fashion also encountered this choice when it entered the herbal tea industry: at that time, the herbal tea industry generally adopted the concentrated juice packaging scheme, that is, the establishment of concentrated juice factories, and then the concentrated juice was transported to various places for packaging and processing, so as to achieve the best cost, and Xu Shihui insisted that the original taste of tea is delicious.
In the end, High Fashion adopted a "stupid" approach, moved the raw materials to factories around the country, and used the original freshly boiled extraction technology to establish an herbal tea production line for online extraction of Chinese herbal medicines. "Although we have invested more in equipment, manpower and time, and have to spend more energy to manage the raw material production line across the country, we feel that it is worth it." Xu Yangyang said.
In fact, "stupid kung fu" is the daily life of Dali Food's "hard work". This kind of "stupid kung fu" is reflected in all aspects such as supervision, raw materials, processes, and technologies.
In April 2017, Dali Foods launched Doubendou, which adheres to "natural and additive". In order to take into account the quality and taste, and find the best raw materials, High Fashion traveled all over the world's soybean producing areas, and finally chose non-GMO soybeans from Northeast China, and established an exclusive soybean raw material base in the "black soil belt" of Heilongjiang to ensure "quality" from the source.
After having good beans, Dali Foods still has good technology and technology. By finding an ultra-micron wall-breaking grinding technology in Japan, we found a high-pressure homogenization technology in Germany...... Doubendou has formed four core processes of "stone grinding and wall breaking, puree purification, molecular emulsification, and aseptic locking", making the protein 4.0 grams per 100ml, and extending the shelf life to 9 months.
In 2018, the project "Development of Protein Thermal Aggregation Control Technology and Equipment and Development of High-quality Soy Products" won the second prize of Beijing Science and Technology Progress Award; In 2021, the project of "Soybean Milk Natural Zero Added" won the Science and Technology Special Award of China Food Industry Association; In 2022, the "Soybean Soybean Milk Whole Bean Process Technology" won the special prize of the Science and Technology Award of the China Food Industry Association......
Whether it is Doubendou or the success of High Fashion, it is inseparable from these technological innovations. With the support of technology, making good use of raw materials and good technology, and producing good products with the spirit of "ingenuity" is the underlying path for High Fashion to build a brand moat.
"Focus" can be long-lasting
Around 1990, it was an important moment in China's food and beverage industry. In 1989, when Dali was established and Wahaha officially started, Robust was established; In 1990, Xiamen Yinlu received an investment of 200,000 US dollars and began to expand its production capacity......
Dali and Wahaha have become one of the representatives of the resilience of China's private enterprises.
Where does this "resilience" come from? Come from focus.
Since the reform and opening up, China has experienced many booms, including real estate boom, Internet boom, car boom, each boom, a large number of private enterprises have changed jobs, and a large number of people have fallen into the quagmire. Looking back, these booms have led to disruptive growth for many private enterprises.
The prosperity of an enterprise is inseparable from the establishment of a moat, and it is also inseparable from the avoidance of erosion factors. Warren Buffett's Moat describes the factors that can erode moats, and resisting temptation to avoid destructive growth is one of them. As Xu Yangyang said, "In the past 35 years, there have been many opportunities to make quick money in the market, but Dali has always been focused on the food industry. ”
High Fashion's "focus" is mainly reflected in the fact that it has been focusing on the food and beverage industry, keeping up with the changes in Chinese consumer demand, and constantly innovating and launching products that consumers love, such as creating the category of green plum green tea, valuing and branding soy milk, which is indispensable for Chinese breakfast, and launching bean beans.
The premise of "focus" is accurate insight into consumer demand. Moreover, the insight into consumer demand and respect for the market run through the development of Dali Food. In Xu Yangyang's memory, when he was a child, his father was always busy, with no rest time, either in the factory or in the market.
"We are very concerned about the changes in consumer trends and how to meet the new needs of consumers under the new trends. Product innovation, from the ingredient list, image packaging design, marketing methods, to industrial layout, keep up with the core of consumer demand. According to Xu Yangyang, the reason for the launch of Doubendou is to see consumers' demand for green and healthy plant nutrition.
Of course, this change is not limited to channels and consumption insights, but from production, R&D to management and operation, from top to bottom, from inside to outside.
For example, in terms of production, Dali Foods focuses on promoting intelligence from eight scenarios, including flexible production of production lines, accurate quality traceability, intelligent warehousing, and supply chain visualization; At the operational level of enterprises, digital and intelligent transformation is carried out, and new products are developed based on consumer needs and centered on technology research and development.
△ Dali Garden bread production line real shot
Focusing on the "unchanged" of the food and beverage industry, always paying attention to the "unchanged" of consumer trends, and keeping up with the pace of technological change, in fact, the core is the focus and unchanged of High Fashion.
epilogue
In the past three or four decades, China's private enterprises have overcome obstacles and created countless miracles: some companies like Dali Foods started from a production line and grew all the way to a well-known brand in the country and even the world; Some companies have gone through the peaks and troughs, and they are rejuvenated at present.
Meng Wanzhou, Zong Fuli, Xu Yangyang and other "second generations" have the spiritual imprint of "creating a generation", and they also have a background in modern enterprise management and digital life that is more suitable for this era. How to better inherit the entrepreneurial spirit of the fathers and continue the excellent values of the enterprise is the key for China's private enterprises to cross the "second-generation trap" and move towards a farther future.