Click to read the original text for details The core business is the foundation of a company's survival and growth. How important is the core business? Over the past six years, New Distribution has continuously tracked 100 FMCG brands and distributors, discovering that companies that can operate steadily and grow amidst drastic changes have excelled in building and upgrading their core business. Conversely, those that lost direction, failed to build a solid core business, and could not stabilize their market position under the impact of the pandemic have performed poorly in recent years. Companies that chased "fast variables" while neglecting "slow variables" have mostly disappeared, not even worth recording. Today, we have selected three typical cases of brands and distributors focusing on their core business, hoping to help readers think about their own core business and firmly stabilize their market position under external shocks like the pandemic. 1 Snow Beer: Seizing the Opportunity to Build a High-End Brand Core Today, Snow Beer has almost entered the lives of every Chinese person. With just over 20 years of development, China Resources Snow Breweries has firmly secured the top spot in China's beer sales volume, becoming one of the representative brands of Chinese beer. Since 2014, China's beer market has seen stagnant sales volume. This is a profound change, a huge "slow variable." Beer brands that fail to recognize this will fall into a low-quality operation trap of shrinking volume and declining profits. Before 2017, Snow Beer's core business was dominated by mainstream beers priced below 6 yuan. At the end of 2016, Hou Xiaohai, a renowned figure in China's beer industry, became CEO of China Resources Snow Breweries and proposed the "3+3+3" new era development strategy for beer. The core of this strategy is that China Resources Snow Breweries will use three three-year periods, three stages, to ultimately win the high-end battle in the beer sector. This battle could even be called the final battle for the structure of China's beer market. Going from first in mainstream beer to first in high-end beer almost requires rebuilding a high-end core business and achieving first place. It sounds difficult, let alone making it a reality. But by 2021, when the nine-year strategy was about to reach its halfway point, industry estimates suggested that Snow Beer's high-end segment would steadily exceed 2 million kiloliters, completing the second three-year strategic plan ahead of schedule. Why can Snow achieve what seems unattainable? How did Snow successfully rebuild a high-end core business? Looking back, in the past few years, Snow has mainly done several major internal and external things, all related to the high-end battle. Internally, first, capacity optimization to enhance high-end product capabilities and reduce inefficient production from too many factories; second, organizational restructuring to unleash team vitality, with various human resource training programs to cultivate high-end awareness and operational capabilities. Externally, first, successfully integrating the Chinese market of international high-end giant Heineken, rebuilding a high-end brand core of "Chinese brand + international brand," and constructing a "4+4" high-end product matrix core; second, establishing Snow Beer's key account platforms "Huading Club," "Huazun Club," and "Huajue Club" to centrally cultivate distributors' high-end operational capabilities. These key actions by Snow Beer are interlinked and closely related to "rebuilding a high-end core business." But how were these major tasks accomplished? To this end, from July 20 to 22, New Distribution will hold the "7th China FMCG Channel Innovation Conference" with the theme "Seize the Opportunity, Stabilize the Core." We have specially invited Mr. Song Zhanmin, General Manager of the Marketing Center at China Resources Snow Breweries' headquarters, as the keynote speaker to deeply interpret for FMCG industry peers "how Snow Beer seized the high-end opportunity in a complex market environment and rebuilt a high-end brand core." 2 Taishan Beer: Differentiated Product Core, Winning from Small to National After discussing China's largest beer brand, let's look at Taishan Beer, which has emerged as the most distinctive in recent years. Taishan Beer's factory is located in Tai'an City, Shandong Province, and is not large-scale in China's beer industry. But in recent years, Taishan Original Pulp has become famous, with sales in almost all first- and second-tier cities nationwide. In China's beer market dominated by giants, how did Taishan Original Pulp break through and go national? The answer lies in its differentiated product core—Taishan Original Pulp. Original pulp is a type of fresh beer, and its unique fresh taste easily conquers consumers' palates. However, original pulp has a short shelf life, generally seven days to a month. Taishan Original Pulp's largest single product, "7 Days," commonly known as "Big 7," has a shelf life of only seven days. Any brewery can produce original pulp beer, but not every brand can achieve nationwide scale sales. The biggest challenge in selling original pulp beer is distance; it's a business that competes on who can outrun time. Selling only locally results in small scale and poor efficiency, and if production and sales are not coordinated well, returns may occur. With long distances, high cold-chain costs, and difficult production-sales coordination, how to enter stores? How to promote? How to solve the shelf-life problem? Each is a challenge that traditional beer sales models cannot solve. Taishan Beer, with "Taishan Original Pulp" as its core, created an innovative model for nationwide sales of short-shelf-life beer. Its key points are as follows: Target densely populated, consumption-developed first- and second-tier cities, not third- and fourth-tier cities. Use information systems for production-sales coordination, and high-speed cold-chain dedicated vehicles for transportation, loading and shipping immediately after production to save every minute. Even as far as the three northeastern provinces, delivery is possible. Do not use traditional channel sales; use a specialty store model. The direct-operated + franchise Taishan Original Pulp specialty store model fully controls the sales process, with franchise terminals achieving 100% cooperation. Fully utilize official account mini-programs for promotion to attract fans. The first battle upon entering the market is giving away beer, continuously giving away tens of thousands of bottles. Ensure surrounding beer consumers taste it multiple times and become fans. Later, there is a weekly regular giveaway, with every Tuesday being giveaway day, solving the shelf-life problem. Consumers are in the official account; no matter where they dine in the city, one click and delivery arrives fresh. Later, selectively enter high-volume dining terminals. The biggest challenge of the Taishan Original Pulp model is whether it can quickly reach a certain density of specialty stores after entering the market. After all, with low initial store density, the cost of city-wide flash delivery would not be covered even if all the beer is given away. Once the critical point is quickly reached, profits are considerable; the average price of 18 yuan per bottle is already in the ultra-high-end price range, with impressive gross margins. Finding and focusing on one's differentiated core business, building a unique operating system, and doing what giants cannot—this is the secret to Taishan Original Pulp's success in going national. 3 Xiangyang Kaitai: Building a Promotion Capability Core, Leading the Region After discussing two brand owners, let's look at a distributor case. Xiangyang Kaitai Trading is a trading company mainly dealing in daily chemicals. In the Xiangyang region, it has over 300 exclusive terminals with annual sales of nearly 100 million yuan, far ahead of local peers. How did it achieve this? Daily chemical distributors have not had it easy in recent years. International big brands have lower gross margins, terminal and personnel costs are rising, and operations are stuck in a dilemma of difficult volume growth and even harder profit growth. Kaitai's founder, Zhang Li, took a different development path from other distributors through insight into the regional market. Kaitai's advantage lies in terminal sales promotion. Zhang Li has over a hundred experienced and excellent promoters under him; once they are stationed for promotion, sales soar. Therefore, Zhang Li decided to rebuild Kaitai's business model around the core of "promotion capability." First, thoroughly sort out the product structure, renegotiating or considering ending cooperation with any products and brands with gross margins below 20%. Second, organizational reform, with all forces leaning toward terminals and sales promotion. The back office uses information systems to greatly reduce manpower, replacing traditional management with performance incentives to save management costs. Ultimately, a human resource structure where frontline promoters account for 90% is formed. Third, focus on key supermarkets. Everything comes from and goes to the frontline. Through resource integration and investment, secure most advantageous terminals in the market, then station strong promotion teams to increase sales. By continuously building and strengthening its "promotion capability core," Xiangyang Kaitai has become the distributor with the best local operating quality and the most comfortable survival. Discovering "slow variables," seizing opportunities, finding core advantages, stabilizing the core, building, rebuilding, and continuously strengthening and upgrading our core business not only determines our company's survival today but also its future. We hope the above three cases about the core business can help FMCG brands and distributors re-examine their business and rethink their own core business. From July 20 to 22, 2022, New Distribution will hold the "2022 (7th) China FMCG Channel Innovation Conference" in Chengdu with the theme "Seize the Opportunity, Stabilize the Core." This conference will bring together over a thousand marketing experts, brand executives, digital service companies, and distributor owners in Chengdu to exchange ideas on new concepts, models, opportunities, and tactics for seizing "opportunities" and stabilizing the "core."