Second-Generation Succession: Lifeline or Death Knell?

Source | Retail Circle Zong Fuli's tenure at Wahaha has been fraught with controversy; Wan Long and his son's infighting caused Shuanghui to lose 18 billion yuan in market value in a single day; Xu Yangyang's radical reforms at Dali Foods backfired; Fan Mingqiang's sudden appointment at Jinmailang triggered the collective resignation of over 100 middle managers; Luo Cheng, the second son of Holiland, has been accused of excessive self-promotion; Wei Hongcheng's missteps at Master Kong led to a 13% loss in instant noodle market share; Li Xiaojun's actions at Qiaqia caused a 400% surge in product complaints... The chain reactions triggered by second-generation succession, like dominoes, have sounded an alarm for the food and beverage industry regarding generational transition. As the older generation gradually steps back, the new generation takes the stage with ambition, only to find themselves struggling amidst complex markets, corporate traditions, and internal interest conflicts. McKinsey research indicates that second-generation leaders in Chinese food and beverage companies commonly fall into the "innovator's dilemma," which has become a key bottleneck constraining corporate development. Is second-generation succession a blessing or a curse? Generational Gap: Zong Fuli's Pain and Breakthrough Currently, China's food and beverage industry is experiencing the most perilous generational gap in its history. Behind the trillion-yuan market scale, more than half of the leading companies are at the forefront of power transitions, facing changes in leadership. According to data from the China Food Industry Association, 68% of food and beverage companies will undergo generational succession in the next five years, involving the redistribution of market value exceeding 4.3 trillion yuan. Bain & Company data shows that the failure rate of succession in Chinese family businesses is as high as 83%, far exceeding the global average of 45%. As these second-generation heirs, steeped in their parents' glory, collectively step into the deep waters of succession, this "succession experiment" concerning corporate fate is on the verge of spiraling out of control. Second-generation succession is by no means a simple transfer of power; its core lies in the choice of corporate strategic path and the reconstruction of business DNA. When second-generation heirs, labeled with the stereotype of "young and impetuous," attempt to inject fresh genes into traditional enterprises built by their parents over decades, what may result is not an innovation revolution but a systemic rejection reaction at the industry level. Take Wahaha, which has been embroiled in controversy, as an example. Zong Fuli, known for her "iron-fisted reforms," took over in February last year. Over the past year or so, she has transformed from a "little princess" to a "strong woman," but she has also faced severe tests—channel turmoil, failed co-branding, and price war losses, three major pressures simultaneously. Since Zong Fuli took the helm at Wahaha over a year ago, the challenges she faces are not the traditional "succession difficulties" but a systemic failure of traditional business logic in the new consumer ecosystem. Channel turmoil is the pain of digital transformation in retail terminals; failed co-branding exposes the misalignment between brand symbols and Gen Z cognition; price war losses reflect the failure of traditional cost advantages in the new competitive landscape... These three difficulties combined represent the typical crisis encountered by traditional enterprises during generational transition. However, under Zong Fuli's leadership, Wahaha achieved significant growth last year, with revenue rebounding to approximately 70 billion yuan. Even in terms of the frequency of trending topics throughout the year, Wahaha set a historical record under Zong Fuli's leadership. Nevertheless, judging from the current trending topics, the "growing pains" of Wahaha's internal reforms seem likely to persist for some time, possibly even intensifying. But from the financial reports, Zong Fuli has clearly fought a beautiful turnaround. It is worth noting that Zong Fuli's reform pains are not an isolated phenomenon. Behind the seemingly glamorous "succession game" of second-generation succession, it often plays out as a "public opinion palace drama" on the battlefield of traditional enterprise revolution... Clash of Old and New: Traffic King vs. Channel King "They are trapped by the glorious halo of their parents, and under the dual assault of the digital wave and the new consumer ecosystem, they find it hard to strike a balance," an unnamed corporate executive confided to the author. For second-generation heirs, succession is not just a transfer of power but a deep game involving philosophy, strategy, and the future. Second-generation heirs like Zong Fuli are experiencing their own torments during succession. Shuanghui's Wan Hongjian used a whistleblowing letter to expose his father's "illegal related-party transactions," causing market value to evaporate by 30 billion yuan in a single day; Dali Foods' Xu Yangyang aggressively promoted "Doubendou," leading to inventory backlog at distributors and allegations of using expired raw materials to sustain operations; Holiland's Luo Cheng used "half-cooked cheese" to reinvent the bakery track, turning his father's bread shop into a "dessert Disneyland" with a market value exceeding 6 billion yuan; Lee Kum Kee's Lee Hui-chung used "low-sodium soy sauce" to tap into the health trend, growing 3 billion yuan in new increments within the century-old sauce garden... Some are "creating gods," while others are "destroying the Great Wall." But behind this lies more of a fierce clash between old and new thinking. The older generation built their empires on "channel is king," while the second generation is obsessed with "traffic is king." In the older generation's business logic, channels are the lifeline, representing absolute control over the market. But almost all second-generation heirs eager to make their mark make channel reform their first priority, frantically pursuing traffic through cross-industry collaborations, co-branding, and rebranding, sparing no effort. The older generation cannot understand the second generation's obsession with traffic, viewing it as "putting the cart before the horse." In their eyes, the distributor network is a commercial asset accumulated over decades, while short-video likes and live-streaming sales are fleeting digital games. But the second generation, raised in the new era, knows well that traditional channels cannot solve the problem of young people "not seeing, not understanding, not consuming," and channel reform is an unstoppable and urgent task. The older generation's "channel is king" relies on absolute control over supply chains and terminals, while the second generation's "traffic is king" attempts to directly hit consumer minds through data-driven approaches. But the problem with both is that traffic cannot directly convert into sales, and channels cannot quickly adapt to the new consumer ecosystem. In this context, second-generation heirs are forced to make high-risk trade-offs between "continuing existing advantages" and "subverting traditional models." This confrontation between old and new forces is essentially the self-repair and transformation pain of traditional business. Facing the dilemma of "sticking to the old ways means death, innovating means seeking death," Holiland's second son Luo Cheng adopts a "go with the flow" attitude. Three years ago, Luo Cheng posted his first short video on Douyin. Three years later, his Douyin account "Boss Luo Cheng" has over 3 million followers. On his profile, he lists four keywords: INFP | Dessert Designer | Cake Promoter | Holiland Second Generation, with the Holiland second-generation identity placed last. From another perspective, second-generation succession may be overly complicated. Corporate Inheritance: Perseverance and Innovation in Reshaping Mark Schneider, former global CEO of Nestlé, once said: "In this era, the biggest risk is not change, but changing in the old way." Zong Fuli also publicly stated: "Corporate inheritance is also a form of entrepreneurship." She knows well that inheritance is not about resting on the parents' laurels. According to authoritative statistics from the All-China Federation of Industry and Commerce, more than 80% of private enterprises in China are family businesses. Most of these enterprises have reached the moment of intensive succession from the first to the second generation, where the founder's descendants (direct or in-laws) take over management. Because most of these second-generation heirs have received higher education and have overseas study experience, they tend to have broader thinking and want to do more and more comprehensively after taking over. On one hand, they want to shoulder the responsibility of corporate development and social responsibility; on the other hand, they also want to realize their life ideals and pursuits as soon as possible. But in reality, "having both fish and bear's paw" is not easy; this is destined to be a difficult path.

Zhong Shuzi of Nongfu Spring, amid intense competition in the beverage industry, did not blindly follow trends but quietly strengthened the company's moat by deepening its focus on water sources; Yan Danhua, daughter of Yan Bin of Reignwood Group, did not touch the basic business of Red Bull after taking office but used Warranty energy drinks to break into the esports circle... From these vivid and convincing success examples, second-generation heirs should understand: true inheritance is not about discarding the parents' "old map" but using "new tools" to dig deeper value layers. In the wave of old and new clashes, the battlefield for second-generation heirs is clear: to reshape the business landscape through inheritance, balance perseverance and innovation, and move toward an unknown but opportunity-filled future amidst the interweaving of perseverance and change. Coincidentally, the core of inheritance is not simply replicating past models but, on the basis of inheriting the parents' strategic determination, adhering to long-termism and using innovation as a blade to carve new paths. Indeed, when the competitive moats built by the older generation through years of hard work gradually dry up, second-generation successors face not a simple transfer of power but a profound transformation concerning the survival of the enterprise and the reshaping of the business ecosystem. "Wealth can be directly inherited, but prestige, leadership, and charisma cannot be directly inherited," an industry insider said. For second-generation heirs, the parents' wealth may provide initial resources and security, but establishing prestige requires winning respect from peers and the market in the business battlefield; honing leadership requires continuous practice in team management and strategic decision-making; cultivating charisma depends on the sustained display of personal charm and business foresight. The future path for second-generation heirs is a wilderness to be explored, and they must walk it step by step. Perhaps they will follow the established path to protect the family business, or perhaps they will differentiate and open up a blue ocean; but how to find a path truly suitable for themselves still requires time to test. Second-generation succession: there are no guardians, only unfinished reformers.