The Huge Challenges We Face in the VUCA Era What is the VUCA Era? In 2008, during the financial tsunami, we often talked about black swan events. Over the past five years, we have also frequently mentioned gray rhino situations. In recent years, when communicating with distributor friends and within the industry, we often hear people say that business has become very uncertain. This uncertainty has been particularly evident in the past few years, with many black swans flying and many gray rhinos running at the same time. ** △Zhang Fujun, President of Lee Kum Kee Sauce Group China** We call this turbulent era the VUCA era, which represents volatility, uncertainty, complexity, and ambiguity. How should we face an uncertain environment with a certain mindset? Let me give a few examples. During the pandemic last year, restaurants lost 80% of their business, but that doesn't mean the business didn't exist. Consumers' lives had to continue, and they still needed three meals a day. Eating out less meant they had to find other ways to solve their food needs. What we have seen is that the business growth model in the VUCA era has undergone many changes. Channels are becoming more fragmented, and many new models have emerged. Taking condiments as an example, there are now fresh food stores, warehouse supermarkets, and supply chains for small restaurants. Fragmented channels test how we can capture them and provide our solutions to them. At the same time, the iteration speed of channels is also very fast. If a good model emerges today, as soon as one company initially validates it, many competitors quickly enter, whether by imitation or innovation, often leading to price wars. Then comes the elimination battle, and after that, the next cycle begins. In the past, such changes might take ten years to cycle, but today it can happen in just one year. How Brand Owners Should Respond in the VUCA Era How should brand owners respond in the VUCA era? As a 133-year-old condiment brand, Lee Kum Kee's response can be summed up in one sentence: Everything starts from the consumer; wherever the consumer is, we are there. The world is changing, the times are changing, and the channel structure is changing, but consumer needs are very clear. If we can capture the changing needs of consumers and respond quickly, we can seize the business growth opportunities in the VUCA era. Lee Kum Kee has always had a vision: "Where there are people, there is Lee Kum Kee." This vision has supported Lee Kum Kee for 133 years, reaching more than 100 countries around the world. But we hope to achieve that wherever consumers are, Lee Kum Kee is there. Recently, everyone has been paying attention to the triumphant return of astronauts from the space station, but you may not know that Lee Kum Kee products accompanied the astronauts into space. In fact, starting from Shenzhou IX, Lee Kum Kee products have accompanied astronauts into space four consecutive times. Starting from the consumer means recognizing that consumers increasingly value quality and reputation. It also means seeing the huge potential demand for health and convenience. In our research, we found that consumers are increasingly pursuing healthy eating. So, although soy sauce in the industry only has single-digit growth, the growth of low-salt and reduced-salt soy sauce is very rapid. What is Lee Kum Kee's solution for these new consumption trends? Let's share a few cases. Lee Kum Kee has a product called Thin Salt Soy Sauce, which has been on the market for some time, but since last year it has seen very rapid growth. Medically, most non-communicable diseases are caused by high salt intake. Lee Kum Kee's Thin Salt product has achieved rapid growth precisely because it responds to the trend of salt reduction. In addition to thin salt soy sauce, Lee Kum Kee has also launched thin salt oyster sauce. Another focus of ours is a product called Jiuzhuang, which is the best oyster sauce in the Lee Kum Kee series. This product is characterized by fresh oysters and fresh brewing. Last year, we saw that more consumers preferred cooking at home. Since they cook at home, they want to treat themselves well, so they choose the best oyster sauce. As a result, our growth rate is twice the industry average, and in the high-end oyster sauce segment, we are far ahead of other brands. In addition, consumers' time is becoming more fragmented, so in terms of condiment consumption, they often need a "solution" rather than a specific product. For example, consumers want to cook a good dish at home easily, with the same deliciousness as a restaurant. Lee Kum Kee has therefore launched a complete "One Move Wins" series. No matter how many dishes you have, if you choose the right "One Move Wins" sauce, you can immediately create a delicious meal. Starting from the consumer, the first point is to attach great importance to product quality. Lee Kum Kee's third-generation leader, Mr. Lee Man Tat, once said that Lee Kum Kee's product requirement is 100 minus 1 equals 0. In the uncertain VUCA era, everything is changing, but one thing remains the same: everything starts from the consumer. Moreover, in today's increasingly uncertain world, this is almost the only thing that is certain and unchanging. PS: Mr. Zhang Fujun is the President of Lee Kum Kee Sauce Group China. This article is from Mr. Zhang Fujun's keynote speech at the 2021 (4th) China FMCG Conference, organized and published after his review and authorization. _ Click Read Original to see more highlights of the 2021 (4th) China FMCG Conference..._ Are you "watching" me?