---
title: "Will Good Neighbor's Acquisition of 'Le Conte' Bring Growth or Sickness?"
description: "On December 7, Fujian Good Neighbor Food Industry Co., Ltd. acquired COFCO's chocolate subsidiary, Le Conte, for 206 million yuan, including its assets, operations, and brand. The acquisition is seen as a positive move for the domestic chocolate industry, but the future success depends on how Good Neighbor integrates the two companies."
author: "丁忠卫"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-12-09"
language: "en"
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# Will Good Neighbor's Acquisition of 'Le Conte' Bring Growth or Sickness?

> On December 7, Fujian Good Neighbor Food Industry Co., Ltd. acquired COFCO's chocolate subsidiary, Le Conte, for 206 million yuan, including its assets, operations, and brand. The acquisition is seen as a positive move for the domestic chocolate industry, but the future success depends on how Good Neighbor integrates the two companies.

> **Introduction**
>
> Will Le Conte, which was like a chicken rib to COFCO, become a treasure in the hands of Good Neighbor?
On December 7, Fujian Good Neighbor Food Industry Co., Ltd. invested 206 million yuan to fully acquire COFCO's subsidiary, COFCO Le Conte Food (Shenzhen) Co., Ltd. According to both parties, the acquisition includes Le Conte's existing assets, operating rights, and brand, including over 100 trademarks such as Le Conte, Meizizi, and Zhen'ai, more than 20 product invention patents and packaging, multiple sets of imported equipment, and a production line with an annual capacity of 20,000 tons. When this news broke, it caused a stir in my social circle, with both optimists and pessimists. Having been in the candy and snack industry for 20 years, I have my own views on this matter, and I welcome your comments and corrections.
Some media reporters also asked me questions, and I expressed my basic views: this is a breath of spring for the domestic chocolate industry and for the three parties involved—COFCO, Good Neighbor, and Le Conte. In a broader sense, it is a great thing for the country, enterprises, and the people; in a narrower sense, this acquisition shows me the spring of domestic chocolate. In fact, the so-called optimism or pessimism among friends in the industry is mostly not based on an overall understanding of the industry but simply on their knowledge of the two companies, Le Conte and Good Neighbor. This is acceptable for general trend analysis when discussing the relationship between two companies, but given the current delicate situation in the domestic chocolate industry, I think it is insufficient to make such assertions. Moreover, I believe that Good Neighbor's acquisition of Le Conte is only the first step of a long march. Whether it will gain weight or fall ill after the acquisition depends on Good Neighbor itself.
For COFCO, Le Conte was like a chicken rib—tasteless but regrettable to discard. COFCO's previous divestiture was based on its overall strategic considerations, which is understandable. Industry insiders, including myself, expressed regret. In my previous articles, I mentioned that after the divestiture, the best outcome for Le Conte would be to reform and operate independently, though that would be extremely difficult. Being acquired by a private enterprise is probably the second-best outcome. So for COFCO, it has thrown off a burden, a chicken rib.
For Le Conte, if it could have reformed and operated independently, that would have been ideal. Being acquired by Good Neighbor, which is at least a chocolate-making enterprise in the same industry, offers the possibility of integration and future development. With Le Conte's years of brand accumulation, there is a chance to recreate its former glory. After all, the former number one domestic chocolate brand has been preserved.
For Good Neighbor, as a small and medium-sized enterprise that has focused on chocolate for over a decade, it has never been a national chocolate seller with a complete distribution network. Its key market has always been in East China, with a focus on circulation and wedding markets. Such an enterprise faces a significant challenge: how to transform from a circulation and wedding market player to a full-channel operation. I have experienced the transformation processes of Hsu Fu Chi, Jin Sihou, Yake, and Jinguan. For both business owners and marketing operators, it has been arduous and bumpy, full of blood and tears. Good Neighbor's acquisition of Le Conte is a shortcut, but it's not like going from a highway to an expressway; it's more like just learning that a highway will be built between your hometown and your current place of residence. The shortcut has been chosen, but it needs to be built.
As for the domestic chocolate industry, this acquisition is undoubtedly a stimulant. Why do I say that? When COFCO divested Le Conte for strategic reasons, industry insiders, including me, were lamenting, seeing almost no hope for the future of domestic chocolate. Occasionally, a few companies showed a glimmer of light, like a few fireflies in the pitch-black night deep in the mountains. Where is the road for domestic chocolate? The former "number one" collapsed; can domestic chocolate still be made? Now, although we can't say for sure what will happen, it has shown some possibilities. This will surely give those fireflies hope, and more fireflies will appear one after another.
I believe this acquisition itself is beneficial. As for the future, it depends on how Good Neighbor operates next. If it operates well, it will become the leader of domestic chocolate; if not, the outcome is predictable. I think after taking over Le Conte, Good Neighbor will integrate internal management operations such as production and R&D, but in external marketing, following the habits of Fujian enterprises, it will likely set up two business divisions or two sales departments. This is what worries me, because I have never been in favor of small and medium-sized enterprises with revenue below 2 billion yuan setting up too many sales departments in their marketing structure. On one hand, it wastes resources and personnel; on the other hand, 1+1 does not necessarily equal more than 1. But this is the habit of the vast majority of Fujian enterprises, and it has always influenced the marketing structure of Fujian's small and medium-sized enterprises. In reality, successful cases are few and far between.
Regarding Good Neighbor's future operations, especially marketing integration, I would like to share a few immature views with you.
> **Selection of Marketing Operator**
For FMCG enterprises, most business owners understand the importance of a marketing operator. However, Fujian enterprises are a bit strange: they value consulting firms far more than their own marketing operators. According to normal logic, the marketing operator decides which consulting firm to use, but in Fujian, it's the opposite. The boss can spend a lot of money to hire a consulting firm, while the marketing operator is often introduced or approved by the consulting firm. This is quite peculiar.
Good Neighbor needs to change this. A marketing operator who works diligently for the enterprise is an asset. Consulting firms' advice needs to be implemented on the ground. People who are truly down-to-earth and understand marketing knowledge are worth spending money on.
> **Team Integration and Fusion is the Top Priority**
Good Neighbor and Le Conte differ in corporate nature, sales channels, team philosophies, dealer operations, and corporate values. These all need to be integrated and reshaped. Team integration is the most important because people are the primary productive force. If the two teams cannot be integrated well, the enterprise can only stagnate or even decline. The examples of Hershey and Jin Sihou are vivid reminders; the impact on the enterprise is comprehensive.
Integrating a marketing team skilled in terminal sales under a state-owned enterprise system with a team skilled in circulation markets under a private enterprise tests the wisdom of Good Neighbor's boss and marketing operator. Only by doing this well can the enterprise have a future.
> **Product Repositioning and Elimination/Upgrade are Crucial**
The products of the two brands need to be repositioned. Which products to eliminate, what new products to develop—these need careful consideration. Product repositioning determines the future direction of domestic chocolate. After all, times have changed. Some products are in decline, while others that haven't sold well might simply be because the enterprise didn't pay attention to them in marketing. Re-selecting and repositioning might give these products a new lease on life.
Only by clarifying products can you achieve results in channels. Moreover, in recent years, the candy and snack market has returned to the era of "product is king." As long as your product tastes good, is high quality, safe, and hygienic, regardless of your enterprise's size, channel completeness, or team size, it can become a hit. This requires enterprises to put more effort into products.
> **Timely Handling of Le Conte's Historical Issues**
After the turmoil of the past two years, Le Conte must have accumulated many historical issues, especially various dealer reimbursements, unpaid employee wages, and benefits. These need solutions. Only by resolving these issues can subsequent work proceed smoothly.
Dealer reimbursements can be resolved in batches over a time limit, conditionally, without affecting normal trade. Employee issues can be solved through job transfers, retraining, or one-time compensation. In short, delaying won't solve problems. Hershey's current predicament is an example. Even if they seem to gain some advantage through legal means, such actions only bring more negative information and lose the position they should have in the market. This is truly a case of losing more than gaining. Chinese people should understand this better than foreigners, and bosses care more about long-term interests than those working for funds.
> **Reshaping the New Enterprise's Marketing Values Determines Future Development**
Both Le Conte and Good Neighbor have had very different marketing values in the past few years. At the same time, the industry's perception of these two companies may have some negative aspects, such as corruption issues in Le Conte's marketing team and Good Neighbor's inability to retain talent. These issues need to be resolved, making image reshaping particularly important.
Isn't it for these reasons that many insiders are pessimistic about this acquisition? This is a major challenge for Good Neighbor's boss and marketing operator. Shaping corporate culture and values takes time, accumulation, and long-term persistence. Is Good Neighbor ready?
> **Rebuilding Corporate Systems and Standardized Processes**
Private enterprises in Fujian still place importance on standardized operations and processes. Among food enterprises, Yake is a pioneer and has been a representative of Fujian food enterprises that persist in this. That's why many food enterprises prefer to hire people who have worked at Yake—they have been trained in various marketing aspects, are ready to use, and can also train and drive the enterprise toward standardization.
However, Good Neighbor, which focuses on circulation and wedding markets, may lack in these areas. Le Conte, under a state-owned enterprise system, may be standardized, but too much of anything is not necessarily good. To revitalize the new enterprise, Good Neighbor must re-standardize processes and systems, taming two wild horses running in opposite directions into a single steed galloping across the battlefield.
> **Integrated Marketing Communication via Media, Internet, and New Media Must Keep Up**
Le Conte has an advantage in media communication, and Fujian enterprises are not stingy in this regard. Good Neighbor is no exception. However, in recent years, the impact of the internet and new media has caused many difficulties for traditional media. When many enterprises are confused by fragmented information dissemination, Le Conte and Good Neighbor are no exception; they haven't found good solutions either.
In integrated marketing communication, Good Neighbor should learn from enterprises like Jinguan and Youchen. How to operate online and offline, how to embrace the internet—Good Neighbor still has a long way to go.
> **The Distance Between Small and Medium Enterprises and Large Enterprises (Leaders) is Determined by the Boss's Vision**
This acquisition shows the ambition of Good Neighbor's boss, and I applaud that ambition. Although it's no longer rare for small private enterprises to acquire large state-owned enterprises, given the current state of domestic chocolate, such events are indeed needed to stimulate the market. The domestic chocolate market is in a sorry state (a bit exaggerated), and without major moves, the prospects are worrying.
Ambition and money can lead to an acquisition, but whether it truly succeeds ultimately depends on the boss's vision. The level of vision determines the size of the enterprise's development. The boss's vision is reflected in all aspects, and the seven points mentioned above are tests of the boss's vision. In short, the decisive factor in Good Neighbor's future development is its boss and the boss's vision.
In conclusion, Good Neighbor's acquisition makes it possible for Good Neighbor to rapidly transform from a small and medium-sized domestic chocolate enterprise into a first-tier brand enterprise; it makes it possible for a regional brand to transform into a national brand; it makes it possible for domestic chocolate to continue competing with foreign chocolate. These possibilities are the "cause." What will be the "effect"? Will we get the desired result? The key lies in the next steps. Since Good Neighbor has already eaten Le Conte, whether it gains weight or falls ill depends on whether its own body can accept and adapt to what it has eaten—that is, the key is still Good Neighbor.
Bio: Ding Zhongwei, senior food marketing expert, with 20 years of experience in food marketing and training. He has served at Hsu Fu Chi, Jin Sihou, Yake, Jinguan, and other well-known food enterprises. Currently, he is the General Manager of the Marketing Center of Shanghai Zeyun Biotechnology Co., Ltd., and Executive Director of the China Leisure Food Professional Committee. He is a special expert contributor to "China Candy," and a contributor to magazines such as "Sales and Market," "Sales and Management," "Sugar, Tobacco, and Alcohol Weekly," and "Food Industry Technology." He is also a columnist for "First Marketing Network" and "China Marketing Network," and a special contributor to self-media platforms such as "Sales and Market," "Sales and Management," "Internet+," "FMCG Elite Club," and "Golden Distributor." Email: devyy66663@163.com
**This article is authorized for publication by the author. For reprinting, please contact the original author.**
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