---
title: "The Legendary Journey of Six Walnuts from Bankruptcy to Annual Earnings of 2.6 Billion Yuan...!"
description: "Hebei Yangyuan (brand: Six Walnuts, hereinafter referred to as Six Walnuts) was initially a wholly-owned subsidiary of Laobaigan Group, a small and medium-sized state-owned enterprise, mainly producing and selling walnut beverages. Before being acquired through debt assumption by Laobaigan Group, Hebei Yangyuan was insolvent and on the verge of bankruptcy. In January 1999, Hebei Yangyuan was acquired by Laobaigan Group through debt assumption, and in December 2005, the management team purchased the property rights of Yangyuan. After 10 years of development, Yangyuan has become a leading enterprise in the plant protein beverage field, with revenue reaching 9.1 billion yuan in 2015, becoming a global giant in the plant protein beverage category."
author: "New Distribution"
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published: "2017-01-06"
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# The Legendary Journey of Six Walnuts from Bankruptcy to Annual Earnings of 2.6 Billion Yuan...!

> Hebei Yangyuan (brand: Six Walnuts, hereinafter referred to as Six Walnuts) was initially a wholly-owned subsidiary of Laobaigan Group, a small and medium-sized state-owned enterprise, mainly producing and selling walnut beverages. Before being acquired through debt assumption by Laobaigan Group, Hebei Yangyuan was insolvent and on the verge of bankruptcy. In January 1999, Hebei Yangyuan was acquired by Laobaigan Group through debt assumption, and in December 2005, the management team purchased the property rights of Yangyuan. After 10 years of development, Yangyuan has become a leading enterprise in the plant protein beverage field, with revenue reaching 9.1 billion yuan in 2015, becoming a global giant in the plant protein beverage category.

Hebei Yangyuan (brand: Six Walnuts, hereinafter referred to as Six Walnuts) was initially a wholly-owned subsidiary of Laobaigan Group, a small and medium-sized state-owned enterprise, mainly producing and selling walnut beverages. Before being acquired through debt assumption by Laobaigan Group, Hebei Yangyuan was insolvent and on the verge of bankruptcy.
In January 1999, Hebei Yangyuan was acquired by Laobaigan Group through debt assumption, and in December 2005, the management team purchased the property rights of Yangyuan. After 10 years of development, Yangyuan has become a leading enterprise in the plant protein beverage field, with revenue reaching 9.1 billion yuan in 2015, becoming a global giant in the plant protein beverage category.
**Key Financial Indicators: Six Walnuts' financial data can only be described as legendary, legendary, legendary**
Six Walnuts' revenue grew from 285 million yuan in 2008 to 3 billion yuan in 2011, achieving a category breakthrough, successfully breaking the ceiling of the walnut milk category, and becoming a company with revenue in the hundreds of millions. This stage was the most critical development period for Six Walnuts; from 2011 to 2015, Six Walnuts continued its original successful model, with revenue growing from 3 billion yuan to 9.1 billion yuan, gradually entering a mature stage of development.
Before 2011, the key points affecting the company's development were: 1. Positioning: In 2009, Six Walnuts created a unique brain-health category within the plant protein category, differentiating itself from all competitors. 2. Marketing: In 2010, Six Walnuts hired Luyu as the spokesperson, and starting from September 1, 2010, the advertisement "Use your brain often, drink more Six Walnuts" was broadcast during the prime time after CCTV's "News Broadcast", greatly boosting sales. Successful product positioning and brand marketing strategies drove Six Walnuts to surpass the 1 billion yuan and 3 billion yuan sales milestones in 2010.
**The Era Opportunity for Six Walnuts' Rise: The Strategic Window Period of 2005-2010**
Before 2005, the top ten beverage brands in the beverage industry occupied 96% of the market share, and the plant protein category had a relatively low share in the beverage industry, mainly represented by Lulu, Weiwei, and Coconut Palm. During 2005-2010, walnut milk was in the market introduction stage with no national brands. At the same time, major enterprises in the plant protein category were in strategic adjustment periods, unable to attend to their own affairs, providing a highly favorable market environment and strategic window for Six Walnuts' rise.
**Competitors** | **Products** | **2005-2010**
Chengde Lulu | Almond milk | 1. During the transfer of controlling rights from the local Chengde faction to Wanxiang, there were numerous conflicts over control, among shareholders, and between shareholders and management. 2. After continuous growth from 1997 to 2002, revenue declined for three consecutive years from 2002 to 2004, dropping from 1.07 billion yuan in 2002 to 960 million yuan, then recovering to 1.1 billion yuan in 2005. Chengde Lulu was in an adjustment period during this stage, and until 2010, the company was under the atmosphere and background of struggles between the founder and the major shareholder (Wanxiang).
Weiwei Group | Soy milk powder | Weiwei Group went public in 2000, and from 2002 to 2005 rapidly entered the dairy industry, deeply mired in dairy mergers and acquisitions; in 2006, the company adjusted its strategy, shifting from dairy to the liquor industry. Weiwei Group, in its long-term strategic adjustments and expansions, had no time to attend to its plant protein main business, and its soy milk powder business did not achieve significant growth.
Coconut Palm | Coconut juice | After experiencing brilliant development in the 1990s, Coconut Palm's business growth slowed in the 2000s. From 2005 to 2010, Coconut Palm gradually began restructuring, and after intense struggles, completed its state-owned enterprise restructuring in 2006; at the same time, the company's market focus was long-term on the southern market, without significant investment in the northern market.
Yinlu | Peanut milk | Yinlu peanut milk achieved rapid growth in 2005 with new PET bottle packaging and excellent planning ideas.
**The Pros and Cons of Product Focus: Success through focusing on walnut milk, the company plans to break through product single-risk through listing and mergers**
In 2005, after the management team led by Yao Kuizhang bought Yangyuan Company, the reflection was that they could no longer take the old path; simple imitation and following had no future, and they must have a unique "highlight" to leverage the market.
Therefore, when senior management discussed development plans, facing the diverse beverage market, they decisively cut off multiple existing projects that followed market trends and focused on walnut beverages. The result of this focus was building Six Walnuts into a 9.1 billion yuan world-class plant protein beverage enterprise.
But at the same time, after years of development, although the company has built a plant protein beverage product system covering walnut milk, walnut peanut milk, walnut almond milk, nut milk, and almond milk, in 2013, 2014, and 2015, the sales revenue of walnut milk accounted for 93.42%, 94.90%, and 95.41% of the company's main business revenue, respectively. Therefore, from the perspective of product types, the company's product types are relatively single, which is the result of the company's strategy of configuring resources around creating a big single product. The company plans to actively develop new products while seeking new product categories with development potential. Therefore, while maintaining good reputation and stable operating performance, the company will actively promote public listing and fully utilize the development platform of a listed company to diversify payment methods for acquisitions and mergers.
**Industry Characteristics: No cyclicality, obvious regional and seasonal characteristics**
The plant protein industry does not have obvious cyclicality. Plant protein beverages are fast-moving consumer goods for daily consumption by the public, and are relatively less affected by economic cycles.
The production of the plant protein beverage industry has obvious regional characteristics. Affected by product characteristics (relatively heavy, low unit price), the beverage industry has high transportation costs, and due to transportation conditions and distribution capabilities, the sales radius is generally around 600 kilometers. Selling to markets beyond the sales radius will lead to higher freight costs and reduced supply efficiency. Therefore, the industry generally adopts a decentralized layout with multiple production bases.
The plant protein beverage industry has relatively obvious seasonal characteristics. Around and during traditional Chinese festivals such as the Mid-Autumn Festival and Spring Festival, market demand is released centrally, and beverage purchases and sales peak. Therefore, beverage production enterprises' sales have a holiday effect of gradually warming up before the festival and rapidly declining after the festival. By month, the peak sales season is generally in July, August, and September (Mid-Autumn Festival peak), and December, January, and February (Spring Festival peak); by quarter, the first and third quarters account for a larger proportion of annual sales revenue, while the second and fourth quarters account for a smaller proportion, but the closer the end of the year is to the Spring Festival, the higher the proportion of fourth-quarter sales revenue.
**Deep Distribution Model: Regional division, channel designation, exclusive dealership**
After more than ten years of unremitting efforts, the company has explored a "regional division, channel designation, exclusive dealership model" that can deeply tap market potential, establishing a sales network with numerous outlets, wide coverage, and strong penetration.
The company's distribution model is structured as a "regional division, channel designation, exclusive dealership model," including four key points: First, "regional division," which strictly divides the sales market into different distribution areas. Usually, a county market is a typical distribution area, and a provincial capital-level central city is usually divided into several distribution areas, such as Zhengzhou City divided into three distribution areas; Second, "channel designation," which means on the basis of the designated distribution area, different distribution channels are distinguished. Generally, the distribution channels for FMCG products mainly include circulation channels, supermarket channels, catering channels, online channels, special channels, etc. The company's main distribution channel is the circulation channel; Third, "exclusive," which means only one distributor is designated for exclusive distribution within a distribution area or a determined distribution channel;
In terms of the number of distributors and retail terminals, as of the end of June 2016, the company had more than 1,500 distributors, and the retail terminals cooperating with these distributors exceeded 1 million. Secondly, from the breadth of the distribution network, the company's sales areas have basically covered most parts of the country except for some provinces in the northwest and southwest such as Tibet, Qinghai, Gansu, and Ningxia; Thirdly, from the depth of the distribution network, on the basis of key development of county markets within the national coverage, it has extended upward to prefecture-level cities and provincial capital-level core city markets, and has entered first-tier city markets such as Beijing, Shanghai, Guangzhou, and Shenzhen, and penetrated downward to the vast township and village markets.
**Capital Story: Failed in the capital market in 2012, returned in 2017 to aim for a market value of 100 billion**
Six Walnuts' medium and long-term strategic goal is to build its walnut beverage into the first brand in the walnut beverage industry and occupy a leading position in the national walnut beverage industry. The company concretizes the above medium and long-term strategic goals into the "Three Ones Strategy," namely, first in sales channel construction, first in market share, and first in brand.
First in sales channel construction: On the one hand, implement omni-channel construction, that is, expand channel types, deeply carry out marketing channel sinking, expand and consolidate township and rural markets, and let products enter more terminal sales outlets; on the other hand, create quality sales terminals, combined with the company's product group strategy, achieve market leadership in terminal display position, display quantity, and display vividness.
First in market share: The company maintains a leading share in the walnut beverage market, and through comprehensive national layout marketing in the next three years, including first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, achieve marketing without dead ends.
First in brand: In the next three years, strengthen the company's position as the preferred brand and the brand with the best reputation in the walnut brain-health category, combined with the company's first in sales channel construction and first in market share strategies, vigorously enhance brand credibility, tell brand stories, and enhance consumers' mental awareness of the brand.
Haitian Flavoring is the A-share food industry listed company with the closest size to Six Walnuts. Haitian Flavoring's 2015 revenue was 11.2 billion yuan, net profit 2.5 billion yuan, and current market value is about 80 billion yuan. Six Walnuts' 2015 revenue was 9.1 billion yuan, net profit 2.6 billion yuan, and it is expected that after listing, Six Walnuts' market value will reach 80-100 billion yuan.
**Source: Food Investor**
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