What Is It Like to Be a Slow Company in the Fast-Moving Consumer Goods Industry?

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They are slow, rarely seen in the FMCG industry. But interestingly, many things were achieved by them first.

Yangshengtang Group is not a household name, but Nongfu Spring is. Although the vast majority of people do not know that Nongfu Spring is one of the subsidiaries of Yangshengtang Group. Since 1993, Yangshengtang has gradually formed a complex system spanning the beverage industry where Nongfu Spring operates, Yangshengtang Pharmaceuticals, Yangshengtang Food, cosmetics, agricultural planting, and even biomedicine. But interestingly, whether it is Nongfu Spring or the entire Yangshengtang system, it seems very "slow". Slow, but also "new" If you come to the headquarters of Yangshengtang, you will not believe that this is an innovative enterprise—just outside the company gate is the famous Longwu Tea Town scenic area in Hangzhou. This place is too unlike where an innovative enterprise in the public mind should be. They should be more fast-paced, like Beijing's Guomao or Financial Street, or Shanghai's Lujiazui, where men and women walk briskly and hurriedly. But standing at the headquarters of Yangshengtang and looking out, from west to south, there is a continuous range of low tea mountains, only a blue-black outline through the mist. No matter how you look at it, it is too slow here. But can speed determine who arrives at the destination first? Of course not. As the parent company of Nongfu Spring, Yangshengtang Group has made many unprecedented and innovative moves over the past 26 years. Let's start with Yangshengtang Cosmetics. Around 2017, there was a hot topic on Zhihu: Since Avène contains mineral water, would using Nongfu Spring be the same? Since then, the voice of "Nongfu Spring quickly launch a spray" has not stopped on social media. Limited by its business scope, Nongfu Spring naturally cannot make sprays, but its sister company Yangshengtang Cosmetics can. At the end of 2017, Yangshengtang announced its entry into the cosmetics market and launched a birch sap mask. Officially, it is a hydrating mask that "does not use water" and uses all-natural birch sap as the solution. The claim of "natural hydration without water" had never been proposed before, which amazed both inside and outside the industry. In April this year, the birch sap spray was launched. The topic of "Nongfu Spring quickly launch a spray" finally became a reality in a way that people love to see. While the cosmetics company was promoting the concept of "hydration without water", Nongfu Spring was not idle. In early 2019, the plant-based yogurt that also surprised consumers was launched. Not using cow's milk, but all plant proteins (soy milk, nuts, etc.) for fermentation, this yogurt has lower fat but protein content not inferior to ordinary yogurt. Whether it is a hydrating mask without water or yogurt without milk, Yangshengtang's uniqueness often lies in subverting or innovating at the raw material level. In this regard, whether it is the cosmetics as a new star of the group or the largest subsidiary Nongfu Spring, they are just inheriting from the group's veteran—Yangshengtang Pharmaceuticals. In 2007, Yangshengtang Pharmaceuticals launched natural Vitamin C. Before it, there was no truly all-natural VC in China. The characteristic of natural VC is that you cannot see the ingredient "Vitamin C" on the ingredient list because its VC all comes from acerola cherries in Petrolina, Brazil. This is a very special cherry with an extremely strong sour taste, almost impossible to eat directly. Locals in Petrolina even need to add saccharin to acerola cherry juice. But its VC content is 170 times that of ordinary cherries. Since Yangshengtang discovered this special cherry, more than half of Petrolina's acerola cherries have been shipped to China every year. | Yangshengtang Natural Vitamin C Brazil Chapter Do you think this is the ultimate of newness? Of course not. Looking at the history of Yangshengtang, there are many products that can be on this "newness" list. Some of these products are widely known. For example, in 2003, Nongfu Spring took the lead in launching a juice drink with fruit pulp—Nongfu Orchard. Although adding fruit pulp to juice later became a common practice, Nongfu Orchard was a pioneer at the time. It was a year earlier than a certain orange juice brand. The advertisement "Shake before drinking" brainwashed an entire generation. Some crossovers are even more unimaginable. For example, Yangshengtang Group has a biopharmaceutical company, Wantai Biological, which launched the world's first hepatitis E vaccine in 2012. It is reported that Wantai Biological will also launch a domestic cervical cancer vaccine in 2019, making China the third country in the world to have an independently developed cervical cancer vaccine. Yangshengtang seems to have a special complex: wherever no one walks, I will walk that path. In this way, being slow is fine. Slow down, pursue perfection "They are slow, rarely seen in the FMCG industry. But interestingly, many things were achieved by them first." Nongfu Spring is very "slow", which is a recognized fact in the FMCG industry. For example, many of Nongfu Spring's products, when launched, have descriptions like "after X years of research and development, it finally succeeded". And this X, in the vast majority of cases, is greater than 3. The most typical example is Nongfu Spring's 17.5° orange. In 2012-2013, it was the heyday of Chu Orange. The legendary business figure Chu Shijian swept social networks with his oranges and stories. But most people do not know that almost at the same time, Nongfu Spring was in southern Jiangxi, cutting down 100,000 orange trees that had been planted for seven years. The reason was that the fruits of these trees did not meet the company's requirements. Nongfu Spring's orange orchard is far more than those 100,000 trees, and it had many reasons to launch 17.5° orange at that time and compete with Chu Orange for market share. But Nongfu Spring kept its head down and planted oranges until 2014, when it was confident that the quality of the oranges was perfect, before bringing 17.5° orange to the public. Of course, it did not forget to propose a new concept: the golden sugar-acid ratio. Nowadays, 17.5° orange has long surpassed Chu Orange and become the largest orange brand. But from the perspective of that time, who would dare to say that Nongfu Spring was too slow? | Nongfu Spring 17.5° Orange Story But this slowness is determined by the genes of the entire Yangshengtang Group. The most important factors in this gene are: Value raw materials: use natural raw materials whenever possible, not artificial ones; Value aesthetics: no time limit on packaging design, even if the production line is idle, it must be changed until satisfied; Value basic research: for projects involving basic disciplines, no cap on R&D funding, no limit on R&D time; The story of Nongfu Spring planting oranges for ten years in southern Jiangxi is a concentrated embodiment of the first factor. In Yangshengtang's product system, examples of spending years to find good raw materials are everywhere. Acerola cherries from Brazil, birch sap from Finland, and the Moyan Spring hidden deep in the Changbai Mountains. If no suitable one is found in the end, Yangshengtang will bring out the ultimate solution: grow it yourself. The second factor is probably most deeply felt by the designers serving Yangshengtang. Over the years, there have often been comments that Nongfu Spring is a design company. The most talked about is the Nongfu Spring glass bottle high-end water, and its birth story of 3 years, 58 drafts, and more than 300 designs. Such examples are not rare in Yangshengtang. Most designers cannot tolerate such intensity of revision. It is said that many design studios avoid Yangshengtang as soon as they hear its name. But in such long-term running-in, Yangshengtang has also established deep friendships with some top designers. At the most important events of Yangshengtang, these designers can always be seen. Yangshengtang's perfectionism in design not only torments designers but also puts enormous pressure internally. Before the design is approved, even if everything is ready, it can only be postponed unconditionally. The production line is idle, and the daily depreciation cost may be as high as tens of thousands, but Yangshengtang still will not make any compromise or trade-off in design. And Wantai Biological, a subsidiary of Yangshengtang Group, is the best interpretation of the third factor. It is understood that Wantai Biological's hepatitis E vaccine, Yikening, took more than 10 years to develop, with a total project investment of more than 500 million yuan, but before the official successful development, Yangshengtang was not even sure whether it could really be developed. In an interview, Yangshengtang President Zhong Shanshan talked about how to balance R&D investment and profitability, and he said: "I neither manage finance nor understand finance. I do not know how much money there is, nor how to invest. I am like a bank. Whoever does well, whoever has a high knowledge generation rate, I give to them. If the knowledge content of this product is very high, even if I cannot sell it well (I will still invest), because this is a reserve. When I need this knowledge at some point in the future, I can use it." Slow, but not always slow Yangshengtang is not always slow. In some aspects, it is unreasonably fast. 2017 was a year when Nongfu Spring shone in marketing. In the first half of this year, a variety show called "The Rap of China" premiered on iQiyi. Before it aired, the production team had just suffered a withdrawal of sponsorship, with hundreds of millions in sponsorship fees withdrawn. The reason was that hip-hop music was too niche. But what happened later is known to all: Nongfu Spring Vitamin Water sponsored the show. That summer, the hip-hop trend surged from underground and turned into a huge wave sweeping across social networks. The media unanimously described the show as "phenomenal". And Nongfu Spring Vitamin Water also gained massive exposure through the show, with "buy water to vote" becoming a required course for fans. According to officially disclosed data, Nongfu Spring spent 120 million yuan to sponsor "The Rap of China", but there are also internal sources saying that Nongfu Spring actually used less than half of that price. But in any case, deciding to sponsor a show that most sponsors and even insiders did not favor inevitably requires a fairly complex and lengthy internal decision-making process. Nongfu Spring took only 3 days. On the first day, the production team came to the Yangshengtang headquarters in Hangzhou. On the second day, the relevant person in charge of Nongfu Spring went to the show's recording site in Beijing. On the third day, they decided to sponsor. A year later, when Nongfu Spring once again bet on the annual hit variety show "Idol Producer", the plot was almost identical: the show was also abandoned by sponsors, Nongfu Spring came to the rescue, and the show became a huge hit. And the whole process was finalized within just three or four days. In 2019, "All Is Well" premiered. Just after the second episode aired, before it had formed a huge voice across the internet, Yangshengtang Cosmetics and Nongfu Spring again quickly finalized product placement, compressing the entire process to within one week. From this, it is clear that Yangshengtang's fast and slow are quite distinct. In products and R&D, speed does not matter; the first principle is to meet the standards in mind. But when it comes to branding and marketing, Yangshengtang is very fast, so fast that there is almost no redundant research or repeated discussion. Once it sees an opportunity, it acts quickly. Perhaps because of this, although Yangshengtang is slow, it can always seize the first opportunity, and when it is fast, it will not be too hasty. It is between this fast and slow that Yangshengtang Group is growing more and more prosperous in its unique way. Source: Phoenix Weekly