Click "Read Original" for details Today (November 25), Nestlé announced it has agreed to sell its Yinlu peanut milk and canned congee businesses in China to Food Wise Ltd. The transaction includes all equity in five Yinlu Food Group companies located in Fujian, Anhui, Hubei, Shandong, and Sichuan, and is expected to be completed by the end of this year. Notably, Food Wise Ltd. is controlled by the family of Yinlu founder Chen Qingshui. Nestlé stated that it chose Food Wise to take over Yinlu because it can ensure a smooth transition while guaranteeing the long-term success of the Yinlu business. Yinlu's sales in 2019 were CHF 700 million, and both parties agreed not to disclose the financial terms of the transaction. Nestlé also said that as part of the deal, it will retain its Nescafé ready-to-drink coffee business and continue to distribute it in most regions of Greater China. Nescafé is a growth engine for Nestlé's strategic development, and the company will further strengthen investment in this brand across all channels in China. In fact, as early as April this year, when releasing its first-quarter results, Nestlé had indicated it would conduct a strategic review of the Yinlu peanut milk and canned congee businesses, including the possibility of a sale, with the aim of ensuring the long-term growth and success of the Yinlu business. Yinlu was founded in 1985 and, after more than 30 years of development, grew into a leader in China's canned food and beverage industry. At its peak, the company's annual revenue exceeded RMB 10 billion. Unfortunately, this enterprise was acquired by Nestlé nine years ago. What exactly did Yinlu, once popular nationwide, go through? About 35 years ago, Chen Qingyuan was thinking about how to help villagers start small businesses. At that time, after graduating from high school, he worked as an accountant in the village. Hearing from his brother, who was in transportation, that canned goods were very popular outside, he came up with the idea of starting a business. So Chen Qingyuan and his brothers, along with four friends, pooled some money and established Xinghua Canned Food Factory (the predecessor of Yinlu). With the help of abundant local fruit resources, the factory gradually developed. During this process, Yinlu innovated its products and launched the first canned congee. This product could be stored for a long time and was easy to consume, and it was well received by consumers upon launch. Thanks to the popularity of Yinlu's congee, the company's revenue quickly reached RMB 5 billion. However, its glory was far from over; soon after, Yinlu introduced peanut milk, which again became a hot-selling product. The success of these two products enabled Yinlu to rank among the leading domestic food and beverage companies. The credit naturally goes to founders Chen Qingyuan and Chen Qingshui. But the good times did not last. As market competition intensified, Yinlu encountered funding bottlenecks. To solve the dilemma, Chen Qingyuan, after much deliberation, decided nine years ago to sell Yinlu to Nestlé, an international food and beverage giant. Presumably, the founder's intention was to have Nestlé lead the company to better development. Unfortunately, after "marrying into a wealthy family," Yinlu's own products did not receive more resource support; instead, it was tasked with filling and distributing Nestlé's ready-to-drink coffee. It is not hard to see that Nestlé's acquisition of Yinlu was more about leveraging its production capacity and distribution channels, and whether it had genuine intentions to develop the Yinlu brand is a matter of opinion. In the following nearly ten years, the beverage market underwent tremendous changes, with many new brands and products emerging. Yinlu still relied on its two main products, congee and peanut milk, leading to severe brand aging, a significant decline in market competitiveness, and an inevitable drop in sales. This directly led to the current situation where Yinlu is being sold again. According to Nestlé's 2019 financial report, the group's revenue last year was CHF 92.568 billion. Among this, Greater China revenue was CHF 6.913 billion, a year-on-year decline, with Yinlu contributing CHF 700 million. The report also noted that Yinlu's congee and peanut milk were still in decline. Yinlu's journey from a small canned food factory to a national dark horse enterprise, then to joining an international giant, and now being sold again due to declining performance, is indeed lamentable. The sale of Yinlu by Nestlé was actually expected by many. Now returning to the hands of the founder's family may be a blessing. However, with intensifying competition in the food and beverage industry, it will be difficult for Yinlu to rise again among numerous brands, and time is running out.