---
title: "FMCG Professionals, Brace Yourselves: Another Wave of Layoffs Is Coming"
description: "Yesterday, someone told me that if I worked at a foreign company, I would have been purged for writing freely on WeChat, as individuals represent their companies. Fortunately, I don't work for one, so I clarify that my writings don't represent any corporate stance. Recently, Alibaba reduced its campus recruitment from 3,000 to 400, sparking talk of an internet winter, but the FMCG industry is facing a real cold snap. This year, I've exposed Blue Moon's disguised layoffs and Want Want's restructuring, but more layoffs are coming, leaving many wondering what's happening in the FMCG circle."
author: "老纳"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-09-10"
language: "en"
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# FMCG Professionals, Brace Yourselves: Another Wave of Layoffs Is Coming

> Yesterday, someone told me that if I worked at a foreign company, I would have been purged for writing freely on WeChat, as individuals represent their companies. Fortunately, I don't work for one, so I clarify that my writings don't represent any corporate stance. Recently, Alibaba reduced its campus recruitment from 3,000 to 400, sparking talk of an internet winter, but the FMCG industry is facing a real cold snap. This year, I've exposed Blue Moon's disguised layoffs and Want Want's restructuring, but more layoffs are coming, leaving many wondering what's happening in the FMCG circle.

> Yesterday, someone told me that if I worked at a foreign company, I would have been purged for writing freely on WeChat, as individuals represent their companies. Fortunately, I don't work for one, so I clarify that my writings don't represent any corporate stance.

A few days ago, Alibaba stole HR's thunder by cutting its campus recruitment from 3,000 to 400, leading many to exclaim that the internet industry's winter is coming. But compared to the internet industry, the entire FMCG sector is in a true deep freeze.

This year, I've already exposed Blue Moon's disguised layoffs and Want Want's organizational restructuring. But that's just a small part. Recently, friends have left messages saying their companies are also laying off staff. A chill runs down my spine—what's happening in the FMCG circle?

**1. Poor Performance Leads to Layoffs at Yinlu**

In 2011, food giant Nestlé acquired Hsu Fu Chi and Xiamen Yinlu Group. Over the past four years, due to a decline in gift-giving culture, Hsu Fu Chi's growth has been sluggish. Compared to Hsu Fu Chi, Nestlé and Yinlu adopted a cooperative model, with fewer changes to Yinlu's team after acquisition, and the chairman retained. Nestlé's own products like beverages and coffee have seen slow growth or even decline. After acquiring Yinlu, Nestlé hoped to leverage Yinlu's team to expand sales of Nestlé products, but it didn't work. Not only did Nestlé products' distribution not increase, but Yinlu's distribution also declined. One day, I visited five small convenience stores and couldn't find Yinlu's flagship product—peanut milk.

As of now, Yinlu has only completed 55% of its annual target in some provinces. Compared to the same period last year, overall product sales haven't declined, but the flagship peanut milk has dropped 5 percentage points, making it impossible to meet the annual target. Under such circumstances, layoffs are the only option.

When mentioning Yinlu, people first think of peanut milk and eight-treasure porridge. Once, PET peanut milk was a product that sat in warehouses and went bad, while canned products were rejected by distributors due to transparent profits. After hiring Ye Maozhong's planning company, PET products were designated as the flagship, and Zhang Baizhi's "white and rosy" ad campaign helped peanut milk quickly establish a foothold in the plant protein category. In 2011, JJ Lin became the spokesperson, and the ad changed to "Real ingredients, be yourself." Early ads focused on nutrition and health. In 2014, the appeal shifted from rational to emotional with Wang Luodan's "One sip of fragrance, one sip of happiness." Although the slogan aligned with Yinlu's "Taste of Love" tagline, market response was lukewarm, much like Wang Luodan's career—not quite famous, blending into the crowd. In contrast, Bai Baihe, who looks similar to Wang Luodan, has become hugely popular. In the same plant protein category, later entrant Six Walnuts replaced Yinlu, Lulu, and Coconut Palm with the slogan "Use your brain often, drink Six Walnuts," dominating the market with sales exceeding 10 billion.

Compared to Yinlu's sudden shift to emotional appeal, Six Walnuts has consistently focused on rational appeal—walnuts nourish the brain. Another difference is Six Walnuts' expansion into the gift market—"Holiday gifts, Six Walnuts." Yinlu's PET packaging limits it to the immediate consumption market, where competitors include Coca-Cola, Pepsi, Master Kong, Uni-President, and Wahaha—all beverage giants with extensive product lines. Yinlu only has peanut milk to offer. In product competition, it loses; in price, it has no advantage; in shelf space, retailers allocate based on SKU count. In contrast, Six Walnuts' competitors in the gift market are Red Bull, JDB, Wanglaoji, Lulu, and Coconut Palm. Lulu and Coconut Palm aren't even real competitors because one sells in the north and the other in the south. These companies' products share characteristics: canned, few categories, and high prices. Six Walnuts competes for floor displays and whole-box sales. Interestingly, companies focusing only on immediate consumption are struggling, except Uni-President, which turned around with Hai Zhi Yan and Xiao Ming Tong Xue, but overall sales declined while profits increased. Companies doing both immediate consumption and gifts have seen rising sales and profits during this cold snap.

Yinlu's shift in appeal confused consumers, and its established customer base was attracted away by other products. It wanted to enter the gift market, but PET packaging limited its suitability for gifting; more people gift eight-treasure porridge than peanut milk. This also reflects Ye Maozhong's planning limitations—focusing on the present without planning for the future. Remember, Yinlu's three-piece canned peanut milk once held a much larger market share than PET, but it was abandoned due to transparent profits, wasting a golden opportunity and allowing Six Walnuts to surpass it.

**2. Failed IPO and Declining Performance Lead to Layoffs at Baixiang**

In 2014, Baixiang's IPO was terminated, forcing it to move its headquarters from Beijing back to Henan. In 2009, Baixiang moved to Beijing to pursue a larger market. Over five years, it failed to expand externally or achieve its listing goal, and its home base began to crumble, forcing a humiliating return. This wasn't just an office move; it caused significant talent attrition. When moving to Beijing, many Henan employees didn't want to relocate and chose to resign. Baixiang recruited a team to stay in Beijing, but when moving back, those elites didn't want to come to what they saw as a backward area, leading to another wave of departures. The team was broken up twice, causing considerable damage.

My initial impression of Baixiang was its ad slogan "Eat noodles well," which was nonsensical. In 2004, Baixiang introduced the "nutritious bone broth" concept, taking a different path. When the public still viewed instant noodles as convenient but not nutritious, Baixiang focused on nutrition. Unlike Wugu Daochang's "non-fried, healthier" approach, Baixiang didn't focus on noodle processing but promoted its soup base. This had two advantages: it didn't antagonize the industry, and it targeted a point no other company had addressed, making it easier for consumers to accept. At the time, Hualong's three-flavor noodles were priced at 0.7-0.8 yuan, Master Kong's braised beef noodles at 2.5 yuan, and Baixiang priced itself at 1 yuan, filling a price gap and quickly capturing market share. However, this pricing couldn't support the nutrition concept. When JDB launched Wanglaoji with the "fear of getting heaty" concept, it priced higher than the most famous cola. Baixiang positioned itself as nutritious but cheaper than Master Kong's braised noodles. In a price-sensitive era, consumers accepted it, but as consumer demands upgraded, did Baixiang keep up? This year, Uni-President and Master Kong launched their own soup-based products like Tang Daren and Tang Master, priced much higher than Baixiang's bone broth noodles. With stronger brands and upgraded products meeting consumer needs, how can Baixiang compete?

As is typical for instant noodle companies, Baixiang also ventured into beverages, but without innovation, merely imitating Master Kong's iced tea. In building its team, Baixiang's relevant departments showed arrogance, like the nouveau riche. Baixiang did have beverage talent. In 2011, owner Yao Zhongliang recruited Jiang Xingzhou, a former marketing director at Jianlibao who had briefly revived the brand. But Jiang had failed in his own venture, alienating distributors. The beverage circle is small, and everyone knows each other. Perhaps for this reason, Yao assigned Jiang to run Sunshine Jinsui, managing Fuxi Noodle Workshop (unrelated to the meat company Fuxi). Lacking experience in chain stores and facing competition from mom-and-pop shops and Shuanghui outlets in Henan, Jiang left after a year. Baixiang's few beverage talents weren't used in their field, and others couldn't manage it.

Given the poor overall environment this year, layoffs at Baixiang are inevitable.

**3. Anxious Times: Where Do Yashili Employees Go?**

In 2015, Yashili's biggest news was acquiring Danone's Dumex, seemingly a turnaround. However, Danone is a major shareholder of Mengniu, which acquired Yashili. This was a left-hand-to-right-hand maneuver. After the so-called acquisition, it wasn't Yashili managing Dumex; instead, Danone personnel entered Yashili to control both.

Looking at Danone's approach with Mizone, it first used Yashili's acquisition of Dumex to raise capital, then used that money to reform both. Given Danone's successful track record in China, I'm quite optimistic about Yashili's future, as Danone has management skills and deep understanding of the Chinese market. Nestlé should learn from Danone; its acquisitions in China, except Totole chicken bouillon, have been lackluster. Danone's acquisitions of Wahaha, Mengniu, Guangming, and Robust have all been successful.

Danone personnel have begun entering Yashili Group, which is good for Yashili's development but unfavorable for existing staff. Danone, to reform Robust, was willing to lose money for seven years and fire all employees. Given Danone's view of the Chinese milk powder market and its disdain for Yashili's team, more upheaval is inevitable. After Mengniu acquired Yashili, Synutra was abandoned. Now with Danone's stronger presence, where is the future for Yashili employees?

**Finally**

**In this cold snap, if your company hasn't laid off anyone, burn incense in gratitude. If your company not only hasn't laid off but also offers the same promotions and raises as last year, then burn high-quality incense. Such companies are rare in the FMCG circle. Hang in there, brothers, and cherish what you have.**


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