China Food

Uncertain about the new normal, how to find the password of “resilient growth”?

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has details in its eyes and the overall situation in its heart. Only by cultivating organizational culture, capability system and resource system with the goal of creating long-term value can it truly cross the cycle and build a lasting competitiveness with resilient growth.
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This year, the multi-point outbreak has had a great impact on the food and consumer industries. However, if the cycle is prolonged and the mentality is calm, the outbreak may only be a microcosm of the new normal of uncertainty. In the process of enterprise operation, there are bound to be many crises. Moreover, we are in a very changeable external environment, such as the war between Russia and Ukraine and the trade crisis. In the process of China’s rising to the world’s largest economy, it is bound to face more threats and challenges, and the crisis will become the new normal.
However, every crisis may provide a good opportunity for enterprises to introspect and reflect. In an era of high uncertainty, how should enterprises cultivate their internal skills and improve their ability to resist crises, so as to achieve resilient growth through crises?
On June 5, foodaily daily food and yaxinbuer Institute jointly launched a closed door Seminar on “through crisis, resilient growth”, inviting industry senior brand experts, the chairman of listed companies with global vision and through multiple economic cycles, the helmsman of the high growth in the adverse trend of the epidemic, the outstanding leader of China’s cutting-edge brands and decision makers focusing on investment in the consumer sector to jointly discuss the new normal of the crisis, Countermeasures for the food and beverage industry.
From the perspective of the comprehensive forum, specifically, enterprises can make plans in the short, medium and long term respectively. In the short term, they should flexibly adjust their market strategies and resource allocation to quickly respond to fluctuations and turn crises into opportunities; In the medium term, the short board of capability shall be supplemented to improve the strength of software and hardware; Long term planning, early layout of the blue ocean market, with details in mind and the overall situation in mind, and with the goal of creating long-term value, cultivating organizational culture, capability system and resource system can truly cross the cycle and build a sustainable competitiveness with resilient growth.
New and old enterprises, resilience and crisis response
Professor caoyangfeng defines “the ability of an enterprise to restructure organizational resources, processes and relationships in a crisis, quickly recover from the crisis, and use the crisis to achieve adverse growth” as organizational resilience. He concluded that Organizational Resilience includes strategic resilience, capital resilience, relationship resilience, leadership resilience and cultural resilience. During the discussion, we found that both young and cutting-edge brands and veteran enterprises have more or less shown signs of strong organizational resilience in the face of the epidemic.
New and cutting-edge brands are flexible to change and break the restructuring strategy
In Shanghai, the central city of the epidemic, oatly has more than half of its business. In addition, Chengdu, the core group of suppliers, warehouses, logistics service providers, company headquarters and employees, is in Shanghai, which means that a considerable part of oatly’s business is affected. However, in the sharing of David Zhang, President of oatly Asia, he mentioned that the growth in April and may this year was much higher than expected. What did oatly do right?
1) Find problems and adjust them quickly. After the oatly management team realized the problem, they thought about several points. First, adjust the original grand goal to short-term survival. The second is to quickly adjust the strategy according to this goal. Third, fully tap their own potential.
2) Change the strategy and rebuild the three balance systems. In the case of repeated outbreaks in the country from February to March this year, oatly sensitively and accurately judged the needs of the home scene, strengthened the strength of the retail team, and strengthened the o2o layout; At the same time, new ice cream, new tea products and other products that can enhance the “sense of well-being” are laid out, achieving the balance between catering and retail, online and offline, and the balance between first tier cities and non first tier cities, bringing short-term new increment and long-term full mode to the brand.
3) Business is good, and brand values drive positive energy transmission from the inside out. Oatly has always adhered to the values of nutrition, health, trust, openness, transparency and sustainable development. Practicing the concept of “business for the good”, oatly has joined hands with all sectors of society to donate oat milk to volunteers, medical institutions, universities and closed communities in the anti epidemic front. With the idea of serving the community and solving some urgent problems for everyone, oatly started community group buying and mobilized employees to serve the community with their own strength.
The epidemic set many unknown inflection points on the vegetable milk track. The breakthrough of oatly milk revealed the strength of its brand and brought a successful case to the recently frustrated food and beverage industry. In the face of uncertainty, we can’t really predict what the future challenges will be. What we really need to do is to comprehensively improve our “basic abilities” and grasp more “initiative”. Core competitiveness is the hard power of an enterprise.
Old brand enterprises focus on the ecological layout of the community, accumulate and develop
Under the epidemic, community group buying has become a new model, which has also led enterprises to further think about the community scene. According to the data of the Ministry of Commerce, there are about 190000 communities in China, including about 500million families; There are more than 54million supermarkets around the community. In the future, 70% of the consumption will focus on the last kilometer of the community.
The large-scale outbreak of community group buying under the epidemic has benefited the enterprises. However, the new retail enterprises represented by Yifen have already established an ecological value chain around family life services in Shanghai through the construction of community ecology for many years. Under the epidemic situation, this value chain that goes deep into the community has played a great role in ensuring the steady operation of enterprises under the epidemic situation and the efficient and timely performance of contracts.
1) Return to the origin and user-oriented enterprise layout. Shiyonglei, chairman of laiyifen, pointed out that user orientation is laiyifen’s tenet, and the key indicator is the number of effective users. Around this tenet, laiyifen proposed a family life platform layout with the community as the core, and built an omni channel system through internal and external ecology, offline and online collaboration, internal contacts and external resource links.
2) Serve the community by store. Laiyifen has 1500 stores in Shanghai, covering almost all communities in Shanghai. Each store manager is also a community leader. His business is not limited to generating revenue in the store, but to serve the needs of various scenarios in the community and study how to make closer links with users. The store provides service scenarios through the time dimension of morning, lunch and dinner, and further serves the community through the effective combination of online app, wechat community and store operation. Laiyifen has formed an efficient link grid system of districts, urban areas, community leaders and leaders, which can still perform in an orderly manner under high uncertainty.
3) Stable back-end system construction. In addition to channel construction, system construction is also the core competitiveness that Laifen adheres to, and supports Laifen’s all channel development. Laiyifen has built a collaboration platform with back-end suppliers and partners to link various resources with the system’s digital ability to build a family life ecological platform.
Experience of famous enterprises: both enterprises and organizations should maintain resilience and flexibility
Enterprise management is not a matter of overnight. It is a matter of taking a long line to catch big fish, cultivating internal skills in times of crisis, and taking advantage of the opportunity. Weijunxian (Dacheng food, chairman of the board of directors of Asia), an enterprise senior executive with many times of experience in leading major companies through the unknown, shared with us some thoughts and suggestions on how to survive the crisis from the perspective of enterprise operation and organizational management:
1) Always pay attention to cash flow, and the first task is to survive.
2) The worse the environment, the more we should return to the essence, and think clearly about what is the strongest competitiveness of the enterprise and what is the core value proposition of the enterprise. Focus the limited resources on the core competitiveness of the enterprise and make a single breakthrough.
3) As a person in charge of an enterprise, he must first maintain physical and mental health in order to withstand the pressure; Secondly, unified thinking is also a very important lesson for enterprise leaders. When they really encounter difficulties, how to make the team have confidence in the future, customers have confidence in the future, investors have confidence, and capital parties have confidence? Enterprise leaders need to have this influence.
4) From the management level, flattening the organization is more helpful, so that the opinions of the front-line people can be heard.
Introspection,
Short board of targeted complement capability
The epidemic situation is a big test for enterprises’ ability system, especially for new and cutting-edge brands. From the 0-1 stage, the brand long board is sharp enough, and there is an opportunity to quickly complete the 0-1 stage. However, from the 1 to 10,10-100 stages, enterprises need to constantly supplement the short board from the supply chain level, brand building level, Organization collaborative management and other levels.
The recurrence of the epidemic has, to some extent, inspired many new and cutting-edge brands to slow down from the fast pace, introspect inward, think about the rational growth path of the brand from a long perspective, gradually supplement the construction of the brand’s basic moat from the beginning, and create a long-term and resilient growth guidance.
Luxiuqiong (Bain, global expert partner) summarized the ability that new consumer brands need to cultivate as “five hearts”. ① Never forget the original intention. What was the soul’s original intention to start a business? ② Focus on the core. Focusing on the core product, less is more, learning to subtract is actually the most difficult. ③ Global ambition. The reshaping of channel and traffic structure gives the brand that truly creates consumer experience and trust the opportunity to grow in the whole region. ④ Supply chain ingenuity. The selection of controllable R & D materials, in-depth equity participation and the aggregation of multi share factories continuously realize the iteration of the supply chain. ⑤ Scene patience. The secret to the growth of the whole food and beverage industry lies in finding the most suitable scenario and quickly establishing consumer habits.
Supply chain is a necessary way for long-term brand management
A basic feature of new consumer brands is that brands can quickly complete the verification process from 0 to 1 with sharp entry points. However, all products and brands that can last through the cycle must ensure the stability of the supply chain. In the future, mass consumption in China will still be cost-effective. The competition in the future is the competition between the stable model of supply chain effectiveness, cost and quality and the ability to continuously create hot money.
China’s food supply chain is not mature, and the division of labor in the industrial chain has not been fully formed. The relationship between us is still a game and struggle relationship. It is very difficult to achieve a win-win situation in the supply chain by relying on pure OEM. If the controllability of the supply chain is too weak, the R & D value will decline and the brand will be exposed to the sniper field of the giant.
How do cutting-edge brands build a systematic supply chain system step by step? Zhouweiping, founder of A1 snack Research Institute, said that they iterated the supply chain construction from three stages: ODM, joint venture factory and polymerization factory.
The first stage is the ODM stage, which focuses on the supply of controllable R & D technologies and raw materials. At this stage, more foreign-funded cooperative export-oriented enterprises are selected, and they have been educated by the high standards of overseas products for many years. However, when the brand reaches a certain scale, this model will show defects and bottlenecks.
In the second stage, A1 took the route of joint venture and equity participation. It participated in almost 7 to 8 factories. 100% of the production capacity of these joint ventures was used to supply brands. The advantage of this model is that it can form a completely interdependent and loyal back-to-back relationship with the factory to ensure stable supply without worrying about the risk of core technology leakage.
In the third stage, with the horizontal expansion of categories, the problems of aggregation, team and quality control under the multi factory mode began to be exposed. The founder of A1 disclosed that in the 3.0 stage of the supply chain, he will try to build a super factory through digitalization through both production and marketing ends, integrate dozens of production workshops, turn the vertical supply chain into a horizontal division of labor module, and intensively share the industrial control warehouse allocation, procurement, personnel and other modules.
Global exploration helps new consumer brands achieve in-depth transformation
A single online or offline channel is no longer enough to support the brand to achieve in-depth touch transformation. The brand must expand its entire scale on the basis of the original channel, carry out omni-directional three-dimensional attacks on consumers with dense contacts, and actively explore more accurate and segmented channels and flow models.
After the bonus of online traffic peaked, offline traffic became a low-lying area of traffic value. Zhang Tianyi (BA man, CEO) pointed out that China has experienced a rise in rent for more than 10 years, but this year there is a turning point of rent decline, and offline stores may have a round of flow dividends. Some consumer brands have already set their sights on the global layout of Online + offline. Through the global reconstruction of channel and traffic structure, brands that truly create consumer experience and trust have the opportunity to achieve global growth.
Wang xiaohalogen, who started from the Internet, began to distribute goods in large scale to Ka stores, convenience stores and husband wife stores to improve the penetration of offline channels and return to the marketing model of big brands and big channels. Zhenwei xiaomeiyuan is taking advantage of the emerging models such as community group buying. During the epidemic period, the brand radiated nearly 2500 communities in Shanghai through community group buying to realize rapid product promotion and new products. It also completed the transformation of tap water through Ka channels such as HEMA and JD and offline self operated stores, greatly improving PSD. At the same time, the brand simultaneously launched the Tiktok short video platform to realize high-frequency brand perception through online and offline linkage. Xiaoxiandun has improved its influence by extensively attracting new customers online, opening offline stores for in-depth user communication experience and education, and greatly improving its operation efficiency and quality. Baman’s practical exploration is to extend from catering stores to food retail channels. By using stores to occupy offline traffic nodes, brand marketing expenses can be reduced. On the contrary, when it extends to the surrounding supermarket shelves, the dynamic sales rate will be higher.
Organize iteration and upgrading to improve software and hardware strength
In the 2-10 stage, including the 10-100 stage in the future, the organization needs to continuously iterate and optimize. In fact, a good organization is fighting against people’s inertia, removing all kinds of noise in the corporate culture, maintaining high-efficiency synergy, self driven values, correct atmosphere, and full of vitality rather than rigid state. This requires the brand to gradually establish a high-quality combat team with common value propositions through experience. At the same time, if you want to do a good job, you must first use its tools. The application and layout of enterprises in digital and other tools also need to be upgraded continuously, so as to improve the soft and hard strength of the organization.
Precipitate brand assets and build a mental moat
Back home, many new food consumer brands may have the vision of becoming “the next Coca Cola, Nestle and Mars”. Indeed, strong brands are the most important ability to resist economic risks and epidemic risks. Brand building is the most important investment for enterprises to develop tenaciously and effectively in the medium and long term. However, brand power needs long-term persistence and precipitation. Only by building a clear brand equity path can a strong brand moat be formed in the long cycle.
How to become a high-quality brand with sustainable growth that can cross the cycle, Kaidu Wangxing shared three lessons that brands must practice:

1) The brand ideal should be bigger. We should not only focus on ourselves, but also make consumers’ lives better, society better and the world better. Over the past 12 years, the growth rate of brand value that has established a good brand ideal and actively practiced has reached 212%, far exceeding that of ordinary brands.

2) Full link innovation, realizing innovation that consumers can perceive. Innovation and sense of innovation are two different things. If consumers are not aware of innovation, the meaning of innovation is zero. The sense of innovation does not only come from product innovation, but also from the core link of products to create innovation from the front-end business model to the back-end experience link, and continuously invest in end-to-end innovation investment.

3) Quality efficiency balance for sustainable growth. To build a good brand power, we need to maximize the overlap of different contacts, achieve synchronous or even superimposed delivery, and achieve creative synergy. 55% of the marketing effect is determined by the creative content. Whether in the TV era or this year’s live broadcast era, content power is crucial to building brand equity.
save against a rainy day,
Examining the new consumption mechanism in change
The epidemic has had a huge impact on the scale of consumption, but it has also triggered changes in consumers’ emotions, lifestyles, and even longer-term field and population generations, bringing new consumption habits and market expansion opportunities. Wang Xing pointed out, “difficult time defines opportunities.” (an uncertain era is a period of opportunity to define a brand.) in an uncertain era, changes in consumers will accelerate. This period may just be a good time for brands to sow the seeds of opportunity.
1) What are consumers concerned about in the emotional changes under the crisis?
According to the consumer survey data of KDO in April, global consumers are most concerned about inflation. The rise in the cost of living will change the lifestyle of 49% of global consumers. 72% of global consumers think that war is the most worrying thing. In Asia, including China, 55% of consumers think that repeated epidemics make people feel anxious.
Wang Xing suggested that the brand should pay attention to these emotional changes of consumers and provide consumers with a sense of comfort, security and certainty from the perspective of life, family, community and country. Several key words were mentioned in the forum for implementing changes at the level of specific consumer demand:
① Cost performance. Forced by the pressure of life, the money bag needs to be covered tightly. It must be worth more than its price. Gaohongqing (Bailian Zhigao, founding partner and CEO) pointed out that China has partially entered the fourth consumption era of low desire. The phenomenon of the rise of a large number of discount retail stores in first tier cities can illustrate the problem. Some consumer goods are no longer at the same high premium as before.
② Small indeed lucky consumption. Hua Yiqun (vice president of CMC capital) pointed out that the more difficult and uncertain the environment is, the consumption of small fortune still has a strong vitality. Consumers do not blindly pursue fast, but cure anxiety by lying flat for a moment in rapid changes.
③ Family and country are responsible. “Adversity shows truth”. From wild consumption of Hongxing Erke to hot search on national brand white elephant instant noodles, consumers’ sense of trust, connection and pride in domestic brands is gradually deepening. On the other hand, consumers’ sense of responsibility at the national and social levels is awakening and progressing. At the same time, this value also puts forward higher requirements for the evolution of enterprises, from focusing on themselves to focusing on family, country and social responsibility.
2) Intergenerational Transformation: don’t just stare at the money bags of the post-90s and post-95s
From the perspective of population intergenerational changes, there are more long-term strategic layout and investment opportunities. Gaohongqing (Bailian Zhigao, founding partner and CEO) pointed out that the next two to three years may be the most important and drastic two years for China’s intergenerational transformation. After 2000, he began to enter the workplace and began to consume independently instead of using his parents’ money. Secondly, the first Post-70s have started to retire in twoorthree years. The consumption demand of these two generations may be completely different from that of today’s post-80s and post-90s, which contains a lot of opportunities.
Zhengzheng (maixing investment, partner) believes that the current new consumption is mostly concentrated in the first and second tier young people, but the changing needs and habits of these young people often bring challenges to the management of new brands. Compared with young people, the consumption of 35-45 year-old families is a more determined, sustainable and stable demand. On the one hand, they have the ability and willingness to consume, on the other hand, their consumption demand of families is relatively stable, and they pay more attention to quality, safety and experience, and this part of the population will have a net growth in the next 10 years.
On the other hand, the changes in family lifestyle and scene brought about by the normalization of the epidemic have also accelerated the outbreak of some demands. Prefabricated dishes are an obvious case. The growing time at home and the formation of the habit of storing vegetables have made this kind of home cooking solution that can make a good meal without spending too much time an irreversible new trend.
3) Field conversion: looking for new value in “offline”
Today’s new consumer brands, it seems that everyone is staring at the online, the first tier cities in Beijing, Shanghai, Guangzhou and Shenzhen. However, compared with the sense of uncertainty and insecurity brought by the first tier cities, the third and fourth tier cities are becoming the soil for young people who are eager to lie flat and have a sense of belonging to settle down. Gaohongqing pointed out that with the employment pressure of the first and second tier cities, a large number of young people who have seen the market will return to the county. The new youth in the county will become an important consumer role in the next few years, and the county economy will become a new scene that cannot be ignored.
4) Invest in technological innovation, and only thick accumulation can make thin development
Liu Xu (vice president of China Light Industry Enterprise Investment and Development Association) shared a set of data. Up to now, China’s cutting-edge technology of food innovation accounts for only 5% of the world, but its market consumption basically ranks first in the world. Many of China’s innovations lag behind overseas, especially the core sector of technological innovation, which is a manifestation of the unbalanced and irrational market development.
Zhu Xi (Tiantu capital, partner) pointed out that food is a discipline with a moat. When we look at these century old American brands, whether Hershey, general mills or other century old American brands, their survival and growth do not depend on a certain product or taste to persist for 100 years or even longer. They are through technological innovation. Technological innovation after understanding the insights and needs of consumers will bring a new evolution pattern to the track.
summary
Churchill once said: never waste a good crisis. A stress test in a crisis may hide a greater turning point and vitality. Back to the initial proposition, what are the key words for resilient growth through crisis? Old David of Ipsos thinks that it is focusing, focusing outward on segmentation opportunities and focusing on the needs of target consumer groups; Focus inward on brand building, focus on the basic plate with core competitiveness, focus on the key to building a controllable supply chain, and focus on full link innovation.
All enterprises and entrepreneurs should correctly and objectively understand and make good use of the crisis. Each crisis should be regarded as a testing ground for enterprises and organizations to continuously cultivate and supplement their weaknesses. At the same time, they should also deeply consider the far-reaching impact of changes in the external environment, which may also be a new point for discovering external opportunities to reverse the trend.
Thank you very much to David Lao, managing director of Ipsos China business unit group, Wang Xing, CEO of Greater China and global chairman of KDO brandz, luxiuqiong, global expert partner of Bain, weijunxian, chairman of the board of directors of Dacheng Food Asia, shiyonglei, chairman of laiyifen, zhangchun, President of oatly Asia Pacific region, zhouweiping, founder and chairman of A1 snack Research Institute, Miao Shu, chairman of xiaoxiandun, Wang Xiong, founder and CEO of wangxiaolu Zhangtianyi, founder and CEO of Baman Hunan rice noodles, Pu Wenming, founder and CEO of Zhenwei xiaomeiyuan, gaohongqing, founding partner of Bailian Zhigao, LiuXu, vice chairman of China Light Industry Enterprise Investment and Development Association, Tianruifeng, director of China chain operation association, Shan Zhiming, Deputy Secretary General of the baking trade union of all China Federation of industry and commerce, Weng Yinuo, founder of Hongzhang capital, Zhu Xi, managing partner of Tiantu capital, gaohongqing, founding partner and CEO of Bailian Zhigao Zhengzhong, partner of maxtar investment, Hua Yiqun, vice president of CMC capital, and others had wonderful sharing.
Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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