Angel Yeast's survival and growth is a miracle! In the early 1980s, to seize strategic high ground in the global technological revolution, China launched 48 industrial pilot base projects. The Angel Yeast biotech base project, jointly applied by Yichang Science and Technology Commission and the Institute of Microbiology of the Chinese Academy of Sciences, was one of them. It is also the only survivor among these 48 frontier explorations today. Although the Yichang Science and Technology Commission won the project, no one believed that a research institute, neither close to raw material origins nor with financial advantages, would turn yeast production—a concept completely unfamiliar to Chinese people—into the largest in Asia and second in the world. In Angel's rise, Yu Xuefeng was crucial; he is recognized as a pragmatic doer. Entering Angel Yeast Company (hereinafter referred to as "Angel") in 1986, until the 65-year-old Yu Xuefeng submitted his resignation in 2019, he grew Angel from nothing to revenue of 7.653 billion yuan and net profit of 902 million yuan. From being unwelcome to becoming an imaginary enemy of many international companies in the global market, he learned the way cells divide, building a yeast empire amidst a desolate industry, while maintaining Angel's 100% state-owned nature. Before retiring in 2018, his pre-tax salary was only 360,800 yuan, holding 157,400 shares of the company. Looking back at his 30-plus-year career at Angel, he is grateful: "Angel Yeast's success has not taken detours," and "I am proud to hand over an internationalized enterprise and brand to my successor." How did Angel achieve its successful counterattack? Survivor Angel In 1986, Yu Xuefeng was transferred from the post of Secretary of the Yichang Municipal Youth League Committee to the yeast pilot base as Party Secretary. At that time, the Angel project had nothing but two signs and a leadership team. Yeast is a Western baking ingredient, and international giants roamed freely in open China, monopolizing the bread yeast market. Weak Angel not only lacked funds and was far from molasses production areas (South China, North China), but also not close to the main bread consumption market, and could die under the iron heel of giants at any time. No advantages, but always have some hope. Without raw material advantages, they used talent to compensate for resource disadvantages. The well-read Yu Xuefeng told everyone, "What we are doing is a brand-new high-tech field, and we must achieve a great undertaking unprecedented in history." They applied for high-interest loans from banks, and everyone was full of drive, beginning scientific exploration in the yeast field. Unfortunately, the technology for high-sugar-tolerant yeast used in bread making was difficult to break through. To survive, Angel needed to quickly launch marketable products. Ambitious Angel, however, even had survival problems. Unexpectedly, Yu Xuefeng made a brilliant turn, allowing Angel to survive. Chinese people consume about 30 kilograms of steamed buns per person per year, while bread is only 2 kilograms. Although their yeast was not high-sugar-tolerant, it was fine for steaming buns. Traditionally, using fermented dough to steam buns easily turns sour and is inconvenient. If Chinese people switched to using yeast to steam buns, sales would definitely not be a problem. In the 1980s, Yu Xuefeng launched a "top-down + bottom-up" yeast movement. European yeast mainly supplied large bakeries, so yeast was in large packages. Steamed buns are made in small family workshops, so Angel made small packages. He also used TV advertisements to promote yeast, an operation that puzzled foreign yeast giants. Yu Xuefeng also demonstrated steaming buns with yeast at the Beijing Wangfujing Department Store, widely publicized in newspapers, completing "top-down" product penetration. At the same time, he led his team to do village-to-village promotions for farmers in Shandong, Hebei, and Henan, completing "bottom-up" penetration. Small-packaged yeast for household use quickly became Angel's main source of income, allowing it to find a blue ocean market outside the monopoly of giants and survive. Where was Angel's next gold mine? In 1990, Yu Xuefeng set his sights on the traditional liquor-making industry, but traditional brewing techniques had been passed down for thousands of years, and distilleries did not want to change. How to create demand? Demand lies in users' pain points; only by creating value for customers and researching application technology well can you promote to customers. At that time, liquor-making was inefficient, consumed a lot, had high emissions, and could not produce in summer high temperatures. So Angel developed high-temperature-tolerant brewing yeast. Through achievements promotion by industry associations and the National Science Commission, they smoothly opened the market. This also laid the foundation for the company's later entry into the ethanol fuel market. In 1992, Yu Xuefeng participated in "global economic integration" training, came into contact with large enterprises like IBM and DuPont, learned advanced concepts of the international market economy, and began to stir. In 1993, he began to take on both party and government roles and started planning Angel's grand cause. To catch up with international enterprises, Angel first needed a good organization. Development meant shedding shackles, so they resolutely smashed the iron rice bowl of public institutions and began corporate operation. In the wave of reform and opening up, they were the first to revolutionize themselves. In 1994, relying on expansion in fermented flour foods and the liquor industry, Angel became the largest yeast enterprise in China, revising its strategic goal: to be China's number one. To go from scale number one to absolute leader, it had to shift from rigid demand markets to new technology application scenarios. Yu Xuefeng gave full authorization to every employee, started internal incubation within the company, allowed employees to report over levels, and fully enjoy benefits, ensuring innovation and vitality. In 1996, as revenue scale increased, Angel adjusted its goals again, proposing to strive for Asia's number one and create an international brand. That year, Yu Xuefeng went to Lesaffre, the world's largest yeast company, seeking cooperation; the other party shrugged and even refused his request to visit the factory. He deeply realized that development is the absolute principle. Relying solely on snowball accumulation for development made it difficult to break through internationally, so Angel began planning to go public. At that time, enterprises got listing quotas, so people came in droves to sell shells and quotas. He threw a sentence to the board secretary: "Warmly receive them, but resolutely don't do it!" He said: "Angel is a good company; we firmly believe that China's securities market will move towards standardization and legalization." Indeed, Angel obtained the "dual high certification" from the National Science Commission and the Chinese Academy of Sciences, quickly getting its pass. As biology was a sunrise industry, some suggested its stock code be called Angel Bio, but Yu Xuefeng firmly focused on "yeast within biology," with the stock code "Angel Yeast." He said, "What a great brand advertisement this is." In 2000, Angel Yeast was listed on the Shanghai Stock Exchange, beginning the path of capital expansion, which Angel internally called the "East, West, South, North, Center" plan, continuing to expand production capacity in China and accumulating strength for global development. Strategic Planning Although they got the money, Yu Xuefeng was not blind. "Many enterprises blindly take risks and then fix problems after they occur. Angel is accustomed to strategic planning and doing things prepared," this is Yu Xuefeng's style. "Being predictive and forward-looking makes one more composed in life and work," he said. To give the enterprise a composed confidence, Yu Xuefeng advocated "leaving three-tenths" in doing things. He said, "Angel does not want explosive growth, but pursues healthy, sustainable development." Once, a university professor wanted to directly push laboratory research results to the market, but Yu Xuefeng said, "The market needs a 70-point result; you don't need to push a 90-point one. Leave some room for the market, and also leave some room for yourself. Because you are not sure where the next iteration direction is." In technology, "leaving three-tenths" also means continuously expanding leading advantages. Angel has spared no effort in improving technology. Once, a factory technical transformation required a three-month shutdown, but Yu Xuefeng did not hesitate. Angel is a knowledge-intensive industry; knowledge and talent are the company's most precious wealth. Although frugal, he never stinted on hiring experts. Starting in 2000, the company sought international top experts as consultants through various channels and heavily invested in European bioengineering companies to design world-class production lines. Initially, employees were envious of these foreigners; many years later, when hardworking Chinese employees who studied technology also received million-yuan annual salaries, they experienced the sweetness of knowledge. Although obsessed with technological innovation, Yu Xuefeng was never blind in technology improvement and expansion. He used the "three no's" principle to ensure the enterprise's "good steel is used on the blade": no expansion without improving technology level, no expansion without improving product quality, no expansion without reducing material consumption, thus ensuring the improvement of comprehensive technical efficiency and leaving greater room for development. A general on the march does not chase rabbits; after listing, Angel maintained strategic focus, insisting on doing the main business well, with auxiliary businesses revolving around the main business. Real estate, downstream baking, downstream animal husbandry... "Every day there are temptations, but if you earn easy money too much, you won't have time to focus on the main business." Yu Xuefeng insisted on focus: "We are the only state-owned enterprise in Yichang that has not touched real estate." As a state-owned enterprise, various departments and localities also asked him to invest in building big hotels, water supply companies, etc. What to do? Yu Xuefeng had a clever trick—shout out the strategy, let people support and recognize it, and also constrain himself. Goal traction is conducive to focusing resources, enabling the limited resources of an enterprise to be fully utilized, and reducing explanation time with various departments. Focus brought better development of the main business; Angel could concentrate on creating value for users, doing "concentric multi-circle innovation" based on yeast applications, developing diverse products and marketing to open markets. The aluminum-free fried dough stick leavening agent solved the alum aluminum harm problem in fried dough sticks; the Fubon brand compound yeast, yeast selenium, yeast cell wall, and other yeast-source feed products replaced antibiotics; yeast glucan is an efficient new immune factor widely used in food, medicine, cosmetics, animal breeding, and many other fields... Angel sent the once-unknown yeast to thousands of households' kitchens, as well as into major feed mills, farms, breweries, condiment factories, nutritional products, cosmetics, and more. It created yeast-source business clusters in seasoning, nutritional health, microbial nutrition, animal nutrition, plant nutrition, etc., gradually occupying half of the Chinese market. In yeast production, molasses cost accounts for up to 46%. To ensure normal production and gain more pricing power over raw materials, Angel also expanded into upstream sugar raw material industry. This part of the business has significantly boosted revenue in recent years, though unfavorable to net profit and profit margins, it is significant for the company's strategic stability. "Enterprises all pursue the enhancement of their own value; only by creating value for others can they enhance their own value," Yu Xuefeng said. Common value is exactly Angel's secret weapon for winning market competition. At the distributor annual meeting, he placed the phrase "Shared brand, shared home" in a prominent position. This is exactly Angel's most powerful channel-building logic: only by becoming a family with the channel can common prosperity be achieved. "When facing competition, have a sense of responsibility to users, guide users with product and technical service advantages; do not use information asymmetry to create concepts or provide flashy but not practical products to users," this is Yu Xuefeng's product logic. Angel's "non-product services" were also born under this concept. In 2003, Angel launched non-product services, bending down to serve users from multiple aspects. They built bakeries and steamed bun shops for customers, provided technical guidance, helped them operate better, and customers naturally became more loyal to the brand. After entering the animal nutrition field, Angel found that users could not judge the quality of yeast-source products. The company then launched free testing services, helping users send samples (with manufacturer and brand removed) for testing, giving users clarity and providing data support for product optimization and innovation. "Sell products to the most demanding customers." Angel believes that demanding customers are the driving force for company development. The company encourages every manager to be brave and willing to deal with demanding customers, growing from details and creating more value. Once, a box of Angel products exported to Japan was damaged; this small matter attracted high attention within the company. Through self-inspection and correction, Angel solved this problem and won the world reputation of Chinese yeast. Going Global Many people are puzzled: how does Angel's overseas factory never worry about sales once built? In going global, Angel is equally strategic. In specific implementation, it insists on "building the market before building the factory." After 1995, Angel Yeast entered foreign markets such as Kazakhstan, Uzbekistan, and Russia, starting its internationalization path. "There is still 95% of the foreign market waiting for us to develop." Yu Xuefeng had high hopes for internationalization. In 2003, the "East, West, South, North, Center" domestic production layout entered its final stage, and Angel established an overseas production base research team. Through thorough research, the company decided to build its first overseas factory in Egypt. Before the factory was built, the company conducted unconventional surrounding market development. It did a "carpet-style" grassroots visit, visiting various bakeries, and at product promotion demonstrations, taught bakers hand-by-hand to make bread with Angel yeast, familiarizing them with product characteristics. Once bakers recognized it, products naturally sold well. Besides complex factors like market capacity and international relations, there were many other considerations for overseas factory construction. Seven or eight years before building the Russian factory, the company already knew the local market well. But they felt it was not the time then; it was not until 2015 when the ruble began to depreciate and Chinese imports lost their advantage that they started local factory construction. The root of market survival is respecting local laws, regulations, and religious customs. Before building the Egyptian factory, Yu Xuefeng bought many books on Egyptian history and politics, requiring all Chinese managers at the Egyptian factory to read them. On the first day of the Egyptian project construction, the company established a legal permit working group. The company also invested a lot of resources in training local employees, bringing advanced management concepts and letting them integrate into Chinese culture. In 2011, during the construction of the Egyptian factory, the Egyptian revolution broke out, but due to solid channels and mass base, the company only stopped production for over 20 days before resuming. By the second revolution, Angel had planned to stop production again, but employees requested to continue production, even guaranteeing that "if there are problems, they would live in the factory and protect it." Thus, the company did not stop and pulled through. Fully understanding local customs and practices, and more importantly, giving full respect to local people and customs. The Middle East likes to make bread with ice water, so Angel developed ice-water-tolerant yeast, opening the Middle East market. In Sri Lanka, locals use bread yeast to make liquor, so Angel developed new products for them... "Being strong yourself also suppresses opponents." Looking back at the internationalization path, Yu Xuefeng feels this step was right. Although Angel gradually opened up in some countries, the yeast giants' strict defense made it difficult for Angel to break into Europe and America. As early as the 1990s, Angel began research on yeast extract (yeast umami substance). In 2010, the company developed pure yeast extract. At that time, some old European yeast factories sold yeast extract with 30-40% salt. An advertisement saying "Angel sells pure yeast extract, not salt to you" made Angel the new favorite in the European market. The fledgling Angel was not well received in the US market. It was not until 2016 that a US distributor represented its bread yeast. With the launch of yeast extract and animal nutrition products, Angel, with its technological leading advantage, began to impress the US market. On July 12, 2019, Yu Xuefeng, 65, after serving 5 years beyond the age limit, submitted a written resignation to the company and the board of directors. Although Yu Xuefeng left, Angel Yeast already had advantages and continued to advance triumphantly in the industry. Conclusion: In 2001, Yu Xuefeng led a delegation to an exhibition in the US, where Angel was snubbed and did not close a single order. In 2010, when exhibiting again, distributors proactively inquired. In recent years, a European biotech media article said that the EU allocated research funds to a dozen universities specifically to study new technologies to counter the rise of Angel Yeast. Angel is no longer what it used to be. According to its available annual revenue, from 1999 to 2021, its revenue increased from 153 million yuan to 10.675 billion yuan, rising steadily over 23 years, never declining or incurring losses. In 2021, its yeast products accounted for over 60% of the domestic market and over 15% globally, with production and sales scale ranking first in Asia and second globally, and yeast extract scale ranking first globally. Although there are still some bumps in development, Angel's wisdom and calm temperament along the way are indeed worth learning from.