"Only with Huiyuan does it feel like New Year" However, this year, Huiyuan may not have a happy New Year. On the evening of January 13, Huiyuan Juice announced that the Listing Review Committee of the Stock Exchange had held a review hearing on December 9, 2020, to review the delisting decision. On January 5, 2021, the Listing Review Committee notified the company that it had decided to uphold the delisting decision. On January 6, the Stock Exchange wrote to the company informing it that the last day of trading for its shares would be January 15, 2021, and that the listing status of the shares would be cancelled from 9:00 a.m. on January 18, 2021. If Huiyuan Juice cannot stage a dramatic comeback in the last three days, then January 18 will be the day Huiyuan Juice is delisted. According to Nielsen data, as a leading enterprise in the domestic juice industry, Huiyuan's juice sales in 2018 continued to maintain a leading position. In 2018, in the 100% juice and medium-concentration juice market, Huiyuan still firmly ranked first in the industry, with sales share of 43.7% and 31.5% respectively, even showing growth compared to 2017. (Huiyuan has not published financial data since then.) From the data before the suspension of trading, Huiyuan was still the number one juice brand in China. Now, Huiyuan Juice has liabilities of 11.4 billion yuan, is about to be delisted, and 68-year-old Zhu Xinli and his daughter Zhu Shengqin have resigned from their positions at Huiyuan. Assets of 4.1 billion yuan have been frozen, and Zhu has received 10 consumption restriction orders, been subject to 6 executions, and 1 dishonest execution. Zhu Xinli, born to a farmer in Shandong, created Huiyuan through 28 years of hard work, making it the number one brand in China's fruit juice beverage market. Now he has ended up with delisting, and Zhu Xinli has been labeled a "defaulting debtor" by many media outlets. What happened to Huiyuan? What did Zhu Xinli do wrong?
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The Rise and Fall of the "Juice King" Public information shows that Zhu Xinli was born in 1952 in Yiyuan, Shandong, and is the founder of the Huiyuan Group.
In 1992, at the age of 40, Zhu Xinli resigned from his post and started his own business, founding Shandong Zibo Huiyuan Food and Beverage Co., Ltd.;
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In 1993, after the first batch of concentrated apple juice was produced, Zhu Xinli went alone to Germany with samples to participate in a food exhibition, successfully signing a $5 million export contract for concentrated juice. Since then, Huiyuan concentrated juice was exported to more than 30 countries and regions;
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In 1994, he founded Beijing Huiyuan Food and Beverage Co., Ltd.;
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In 1997, Zhu Xinli spent 70 million yuan to secure 5 seconds of prime advertising time on CCTV's News Simulcast, rapidly boosting Huiyuan Juice's visibility and making it a "national beverage";
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In 1998, he began to lay out factory construction nationwide;
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In 2000, Huiyuan Juice firmly occupied a market share of up to 23%, holding a leading position in the market. Zhu Xinli's ambition did not stop there. In February 2007, Huiyuan Juice was listed on the Main Board of the Hong Kong Stock Exchange, raising HK$2.4 billion. At that time, Zhu Xinli was full of pride, and Huiyuan Juice was at its "highlight moment." Subsequently, one event made him feel he had reached the peak of his life. In 2008, Coca-Cola announced it would acquire Huiyuan Juice for HK$17.92 billion, which was Coca-Cola's largest acquisition plan outside the United States at the time, and also the largest transaction at that time of a foreign company wholly acquiring a Chinese enterprise. Subsequently, affected by the news, Huiyuan Juice's stock price soared by 164.25% that day. However, this was an unusual year. The financial crisis under the influence of the U.S. subprime mortgage crisis shattered the myth of the Western world, and the Beijing Olympic torch ignited national sentiment. There was widespread public outrage over Huiyuan "selling out" to Coca-Cola. A survey involving nearly 70,000 netizens showed that 82% of netizens opposed Coca-Cola's acquisition of Huiyuan Juice. Facing the opposition to "loss of national assets," Zhu Xinli's explanation seemed passive: "Who said selling a company is selling out the country?" But his remark that "enterprises should be raised like sons and sold like pigs" caused an uproar again. In August of that year, the Anti-Monopoly Law came into effect. The following year, the Ministry of Commerce vetoed the acquisition of Huiyuan by Coca-Cola on anti-monopoly grounds, which became a turning point in Huiyuan's development. In 2009, Huiyuan recorded its first loss, with net profit of -99 million yuan, and its market value halved within three days. But these were not fatal. What really caught Huiyuan off guard was that, in order to meet Coca-Cola's requirements and its own goal of transforming into an upstream supplier, Huiyuan lost nearly 75% of its sales team and distribution network, dismantling the sales system that had taken sixteen years to build. At that time, the 21 provincial managers of Huiyuan's 21 national sales regions basically left, and the number of employees dropped from 9,722 to 4,935 within a year, while sales personnel were cut from 3,926 to 1,160. Believing everything was going smoothly, he also confidently halted Huiyuan's new product development. Huiyuan's foundation was shaken. Subsequently, Huiyuan suffered losses for consecutive years, and Zhu Xinli tried many methods to turn the situation around. In 2015, he invested 3 billion yuan to participate in the mixed-ownership reform of Sinopec Sales Company, subscribing to 240 million shares of the company. However, after the mixed-ownership reform, the company failed to list as expected, occupying 3 billion yuan of Huiyuan Juice's huge funds, which caused severe capital shortages for the asset-heavy Huiyuan Juice. From 2013 to 2018, Huiyuan Juice changed its CEO four times, but failed to turn the situation around. Instead, its strategy remained constantly changing, missing opportunities while damaging the interests of many distributors. The loss of a large amount of energy, capital, and channel resources left Huiyuan heavily in debt. In 2019, Huiyuan again attempted to reverse its fortunes by establishing a joint venture with Tiandi No.1, but the plan fell through within three months, leading to the current situation.
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Is Success and Failure Both Due to Zhu Xinli? **The successful rise of Huiyuan is undoubtedly attributed to founder Zhu Xinli. Zhu Xinli's greatest strength is his hard work and endurance. According to insiders, after arduous entrepreneurship, for thousands of days and nights, Zhu Xinli hardly rested on any holiday or weekend, and every New Year's Eve he spent in the workshop with his employees. "He would go to unload trucks early in the morning; during peak shipping times, Zhu Xinli would also go to load goods in the middle of the night." He also had boldness. He went alone to Germany for the exhibition, and when he had no money for food, he brought pancakes from China to satisfy his hunger, earning his first pot of gold. He spent a fortune to secure prime advertising time on CCTV, becoming famous overnight. There is no doubt that Huiyuan's success is inseparable from Zhu Xinli. At the same time, the mainstream view is that most of the responsibility for Huiyuan's failure to grow further also lies with Zhu Xinli: 1. Strategic pursuit issues In fact, perhaps from his remark "enterprises should be raised like sons and sold like pigs," the outcome of Huiyuan was already sealed. Because this remark proves that his strategic pursuit was not to make Huiyuan a century-old enterprise. Besides wanting to "sell" Huiyuan to Coca-Cola at its peak, when he tried to save the company in difficult times, he also spent a lot of energy on investment and capital operations. 2. Internal organizational issues From an internal perspective, Huiyuan is undoubtedly a family enterprise. Incidents of executives being kicked out or forced to leave due to offending Zhu Xinli's family members have been reported from time to time. On this point, there is even a saying that "more than half of Huiyuan Group's employees and management are relatives or fellow townsmen of the boss." 3. External operational issues Domestic and foreign beverage companies have entered the juice beverage market one after another. Kangshifu, Uni-President, and Wahaha are all encroaching on Huiyuan's share in juice products. In the entire beverage market, juice also faces competition from dairy products and functional drinks. Under this pressure, Huiyuan successively acquired the iced tea brand "Xurisheng" and the oolong tea-focused "Suntory" China, but both failed in operation. Huiyuan's sales volume is no longer on the same scale as national brands like Wahaha and Nongfu Spring, and it eventually fell into high debt due to insufficient income. 4. Wrong choices The most discussed is his choice to "sell" Huiyuan in 2008, which is regarded as his biggest mistake. The first three viewpoints above have been basically confirmed by some industry insiders, but I do not agree that Huiyuan's failure should be entirely attributed to Zhu Xinli, nor that the 2008 choice was his biggest mistake.
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Zhu Xinli, a Master No one is perfect, let alone Zhu Xinli, who considers himself a farmer. He does have some problems, but doesn't he know it himself? On the contrary, I think he is a master with clear self-awareness. Zhu Xinli, who considers himself a farmer, did not appear arrogant on many occasions. Many people criticize his remark "enterprises should be raised like sons and sold like pigs," but he also added, "This is market behavior. If you can calculate the accounts, you do it; if you can't, you don't." This statement proves his clear self-awareness. Zhu Xinli clearly knew that he lacked operational capabilities. He understood the hardships of entrepreneurship too well, and it would be difficult to grow Huiyuan to a scale of 10 billion or 20 billion yuan. So in 2008, he chose to sell at a high point and "marry" Coca-Cola. At that time, he had already persuaded Coca-Cola to agree to acquire Huiyuan at an extremely high price. For Zhu Xinli personally, this might have been the best outcome. But fate did not cooperate, and the Ministry of Commerce intervened to block the acquisition under the Anti-Monopoly Law. Otherwise, at least Zhu Xinli would not be living such a hard life today. After that, Zhu Xinli continued to seek external assistance such as capital, or find talents to help him manage the enterprise. Obviously, it was precisely because he knew his own limitations that he did so. Some say those talents were squeezed out by his family. I would ask: if that were the real reason, would he have spent so much effort and money to bring in so many talents, only to kick them out? It is possible for one or two due to conflicts of interest, but note that the executives who left Huiyuan were all originally recruited by Zhu Xinli with great effort and money. The answer is actually simple: those talents did not improve Huiyuan's operational situation. Therefore, Zhu Xinli has made mistakes, but in terms of choices, at least in the 2008 acquisition case that is regarded as the turning point of Huiyuan's fate, I believe he was not wrong. He is a master with clear self-awareness and the ability to seize opportunities.
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Brand Leaders, Know Yourself **It is too difficult for an enterprise to grow big. Throughout history, how many brands and enterprises have produced a 10-billion-yuan giant? Making a trendy brand is relatively not too difficult; some opportunities and trends will create a large number of such brands. But to grow from 100 million to over 1 billion? In recent years, apart from a few like Genki Forest and Jiangxiaobai, you probably can't find many, let alone giants with 10 billion or 20 billion yuan. To achieve a scale of 10 billion or more, besides opportunities and trends, the most important factor may be operational capability. Kangshifu, Uni-President, Tsingtao Beer... Which of these enterprises does not have extremely strong operational capability? Even emerging brands recognized as excellent by the industry, such as Genki Forest and Jiangxiaobai, still face many problems today. How difficult it is to stay popular for a long time. Today, many brands casually talk about achieving 1 billion or 10 billion. They may see the trends and opportunities, but have they truly seen themselves? From a historical perspective, the probability of truly growing an enterprise or brand is too low. From this perspective, most enterprises are far less clear-sighted than Zhu Xinli in 2008. But we all clearly understand that just being clear-sighted is far from enough. Being clear-sighted does not necessarily mean thinking thoroughly; thinking thoroughly does not necessarily mean letting go. Even if you have done all the above, you may not be able to control the situation and the fate of the enterprise. The business figures of the past decades have all eventually faded away, not only Huiyuan and Zhu Xinli. If a tip is adopted, a reward of 400-2000 yuan will be paid.