---
title: "Sam's Club Supplier Steps into the Spotlight: Factory-Owned Brand Hezhengran Seizes New Opportunities in Convenience Foods"
description: "As snack stores and discount retail channels reshape the FMCG distribution order, factories with strong manufacturing capabilities are gaining rare growth opportunities. Zigong Guoran Food, a former OEM/ODM supplier to Sam's Club, launched its own brand Hezhengran in late 2023, leveraging its manufacturing and cost advantages to target hard discount channels, campus stores, B2b platforms, and wholesale markets, with projected first-year sales of 100 million RMB."
author: "赵胜男"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-07-28"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/RIEcKaoUpuskPDIFdht2AQ"
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# Sam's Club Supplier Steps into the Spotlight: Factory-Owned Brand Hezhengran Seizes New Opportunities in Convenience Foods

> As snack stores and discount retail channels reshape the FMCG distribution order, factories with strong manufacturing capabilities are gaining rare growth opportunities. Zigong Guoran Food, a former OEM/ODM supplier to Sam's Club, launched its own brand Hezhengran in late 2023, leveraging its manufacturing and cost advantages to target hard discount channels, campus stores, B2b platforms, and wholesale markets, with projected first-year sales of 100 million RMB.

******Editor's Note:**
In 2023, the rise of snack store channels prompted New Distribution to identify a transformation in FMCG distribution order with industry-level implications, even as most discussions centered on "low prices" and "retail." One key impact is that factories with manufacturing capabilities will gain rare development opportunities. Beyond snack stores, channels such as warehouse club stores, live-stream e-commerce, and discount supermarkets will, through their screening and reverse shaping, provide greater space for factories with genuine manufacturing capabilities and cost advantages. In the short term, new channels bring sales and dividends, but for long-term growth, companies must expand into more channels and convert these dividends into opportunities to build new brands.

**# New Distribution · New Hit Products** column focuses on reporting quality industry cases to support brand development. If you are a factory-owned brand with such quality manufacturing, feel free to contact us.

In 2024, as penetration of snack stores and discount stores further increases, and traditional retail undergoes self-reform, factories with superior manufacturing capabilities will see greater opportunities by focusing on product differentiation and cost-effectiveness. Some factories have already seized the opportunity of channel transformation, moving from behind-the-scenes OEM to the forefront. The case introduced in this article is exactly such an enterprise. Founded in 2017, Zigong Guoran Food started with OEM business and deeply cultivated the convenience food industry. In 2023, leveraging its strong manufacturing capabilities and market insight, Guoran Food seized the opportunity to launch its own brand, Hezhengran. It has since been listed in snack bulk stores, campus stores, KA, BC, and wholesale distribution channels. The brand's first-year sales are expected to reach 100 million RMB.

**OEM Business: A Virtuous Cycle**
Guoran Food initially provided products to catering companies, then developed cold-eat convenience packages, began offering OEM/ODM services for self-heating food brands, and gradually became a long-term stable supply chain partner for several well-known brands. Since 2017, founder Mr. He has witnessed the rise of self-heating foods, from initial emergence to increasing variety, and explosive growth during the pandemic. Mr. He firmly believes: "The upgrade of the convenience food market is inevitable. Instant noodles cannot be the only choice forever. Self-heating foods are what the future market needs, and there is huge room for market development." Because of his long-term optimism about the industry, Mr. He managed his factory with a long-termist mindset from the start. He places great emphasis on product R&D, invests heavily in machinery and equipment, strictly controls quality and safety, and strengthens technician training. Guoran Food has now passed FSSC22000 and BRC certifications, aligning its production standards with international norms. In 2022, Guoran Food won the favor of Sam's Club and became its supplier. Its Korean cold noodles rank first in Sam's Club's best-selling convenience food list, and its scallion oil noodles also rank high. Currently, Guoran Food has become a leading OEM factory in its category, with stable quality, intensive and refined cost control, and significant price advantages for products of the same quality.

Although the factory has manufacturing capabilities, it lacks marketing and brand-building capabilities. In 2023, the full-scale outbreak of snack stores disrupted traditional retail logic, driving efficiency and cost reduction. Once products are listed, they can quickly ramp up sales. At the same time, consumers have become more rational. They gradually realize that many well-known internet-famous brands also started through OEM, and factory-owned brand products are no different in quality, yet retail prices can be about 30% lower or even more. The retail transformation has popularized big-brand alternatives, bringing new possibilities to manufacturing. This is a rare development opportunity for factories with manufacturing capabilities. Guoran Food keenly perceived this opportunity and officially launched its own brand, Hezhengran, to the market at the end of 2023.

**From Behind the Scenes to the Forefront**
**OEM Factory Moves to Channel White Label**
As early as the beginning of 2023, the Hezhengran brand had been registered. After initial exploration, the company found that the business logic of front-end sales and back-end manufacturing differs greatly. Product pricing, sales channels, and marketing resources were lacking compared to professional brands. In November 2023, Mr. Mao joined as CEO of Hezhengran and conducted a comprehensive review and optimization of previously launched products to match the new market consumption environment. After a series of reforms and preparations, the Hezhengran brand was officially launched to the market with a new look at the end of 2023. Currently, Hezhengran's product matrix covers categories such as noodles, rice, hot pot, and includes various specifications like instant brewing, cooking, self-heating, regular size, and small size. Mr. Mao summarized the overall approach for the brand's first-year offline channel layout as: **one center, two basic points.**

**One center is the hard discount channel represented by snack bulk channels**, which is the most core and critical channel for Hezhengran to capture in 2024. Snack channels not only do not charge barcode fees or brand fees, but also have high foot traffic, fast reorders, and high volume, with the characteristics of "more, faster, better, and more economical." Moreover, through increasingly dense city and store coverage, they help white-label new brands quickly go from 0 to 1.

**The two basic points: one is campus (and other special channels) and B2b platforms; the other is wholesale distribution markets.**

**Campus channels**: Students are highly price-sensitive. Hezhengran can provide more surprising prices without compromising quality. Once someone tries, repeat purchases are easy. For example, a certain product's market price in schools is typically 12-14 yuan, but Hezhengran can sell it for about 9 yuan, with a single-box retail price reduction of 3-5 yuan. Next are **B2b platforms**, covering non-snack home and lifestyle stores. Based on data from these stores' output and sales volume of other brands, they are not as matching or high-volume as snack channels, but they are second only to snack channels. Finally, the **wholesale distribution market**: Hezhengran adopts a broad-net, multi-channel logic, first doing matrix layout, then continuing to exert effort later.

**Under Transformation, Crisis and Opportunity Coexist**
Looking back at China's retail history, from traditional counter sales to modern supermarkets to today's popular discount stores, each transformation brings both crisis and opportunity. The Hezhengran brand has been in this chaos since its inception. Mr. Mao believes that the food industry has entered a critical turning point, with changes occurring across the entire chain from consumption to channels, brands, and even supply chains. Facing an economic environment that may not recover quickly in the coming years, we must seriously consider how to keep up with consumer changes, truly focus on consumers, quickly adjust business strategies, and fully adapt to and seize opportunities from long-term changes. The discount format in the past two years has brought many different changes: product prices have returned to rationality, no barcode fees, high foot traffic, fast reorders, and high volume, boosting the rise of white-label brands. For some brands, these changes are unprecedented opportunities, especially for factory brands with weak brand power and limited marketing budgets. However, they are not friendly to established brands with stable price systems, as low prices may disrupt their market pricing. They are also not friendly to brands without superior production capabilities or source factory support, as they cannot even meet the prerequisites for product selection. The rise of discount channels like snack stores has broken the traditional supermarket pricing model, causing significant changes in the FMCG distribution order and bringing new development opportunities to upstream factories. Many manufacturers, in order to get an "entry ticket," blindly compete on low prices. But what consumers need is not low quality at low prices. Simply pursuing low prices while ignoring product quality will not sustain long-term market development. Only by continuously polishing their own strength can they transform through the waves of industry change. At this stage, although Hezhengran has achieved some small successes, CEO Mr. Mao is not blindly optimistic. He pointed out: "The discount channel is still in its growth stage. We need to seize the current window of opportunity to push product sales to the next level. But the word 'brand' is a long-term project built over time. We must remain cautious and respond quickly to changes to go far."

**Final Thoughts**
New channels create new brands. The current channel transformation brings opportunities to build new brands, but two conditions are required.

**First, manufacturing capability.**
Many factories only have processing capabilities and can only produce homogeneous products. But manufacturing requires four capabilities: **R&D capability, product realization capability, product assurance capability, and product service capability.**

**Second, sufficient scale.**
The opportunity of new channels is actually a window of traffic dividends. During this window, you can reach a large number of people you never reached before, quickly bringing sales. But to truly build a brand, **you need to expand into more channels, use sufficient scale to solidify quality control and cost advantages, and gain broader consumer awareness. This is an important fulcrum for building a brand.**

On August 20-22, 2024, the "2024 6th China FMCG Conference" with the theme "Crossing the Era of Shrinking Volume" will be grandly held in Shanghai. Concurrently, the "3rd China FMCG Distributor Conference" and the "3rd China FMCG Hard Discount Conference" will also be held.

**The conference will feature two salons to build opportunities for brand and channel exchange and docking. Welcome to register!**

**One is a high-level dialogue between discount retail decision-makers and brand executives on the theme of "Hard Discount Product Selection and Assortment."**

**The other is a high-level dialogue between B2b platform founders and brand sales directors, focusing on the theme of "Store Penetration and Product Mix for Distributor Regional B2b Platforms (Covering 200,000 Small Stores)."**


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