Hot situation.
In 1994, a candy called "New Year Candy" suddenly became popular in China in the form of a big red bag.
The bright red packaging gives people a strong New Year's flavor, and every household has children visiting the door during the New Year, so it was loved by everyone as soon as it was launched.
At that time, Hsu Fu Chi took into account that people like to taste all kinds of candies, so he launched more than 40 flavors of candies, and implemented a unified pricing policy, no matter how much he bought, it was calculated according to the same **, and only needed to be weighed.
This idea satisfies people's desire to try new things, and at the same time solves the embarrassment caused by not being able to eat enough under the whole bag, so that they can take what they need.
This product is thoughtful and satisfies the needs of all aspects, so it was a hit as soon as it was launched.
Since then, Hsu Fu Chi has embarked on a journey of rapid development, with an annual turnover that continues to grow.
After being loved and supported by many people, Hsu Fu Chi not only became a giant in the confectionery industry, but also completed the process from development to listing in just a few years.
With branches all over China and an extensive sales network, it has been firmly ranked first in the Chinese confectionery market for decades.
Hsu Fu Chi is dissatisfied with the status quo, and the change she dreams of drives her to make an unexpected move: she decides to get married.
Nestle, a food brand that is popular across the country, reached out to Hsu Fu Chi, saying that they were able to help Hsu Fu Chi solve the current problem.
The only requirement for Nestlé after its IPO is to acquire a larger percentage of the shares.
The Xu brothers agreed to this cooperation without much thought, and they were distressed to break through the predicament of many years.
In 2011, Nestlé successfully acquired a 60% stake in Hsu Fu Chi for US$1.7 billion** and obtained decision-making rights over Hsu Fu Chi.
There are unforeseen circumstances in the sky, and people can't compare to the will of heaven after all.
Hsu Fu Chi has not yet had the opportunity to show itself in a new category, and has already faced various problems.
The original situation of joining forces has changed, and it has turned into a large joint loss.
The original idea of the Xu brothers was that as long as Nestlé could help Hsu Fu Chi solve the current problems, then when both the new and old products were successful, it would be a win-win situation for both parties.
Nestlé did not disappoint them, and they invited European chocolatiers to successfully help Hsu Fu Chi solve the technical problems.
However, the Xu brothers did not realize that while Nestle promoted Hsu Fu Chi's technological innovation, it also used Hsu Fu Chi's market share to help the Nestle brand quickly occupy the market.
At the end of 2012, Hsu Fu Chi's candy was once again found to contain TBHQ and BHT ingredients banned by the state.
Although the Xu brothers insisted that they had never changed the recipe and had never added unknown additives to the candy, this incident had already happened, and many supermarkets had to remove the Hsu Fu Chi brand from their shelves.
Soon after, news broke that there was a food safety problem in the Hsu Fu Chi staff canteen, resulting in poisoning of many employees.
Hsu Fu Chi's market impression has dropped dramatically because of the problems with their own food, and the same may be true for other people's food.
Subsequently, the national confectionery market share has been declining due to the continuous decrease in demand for confectionery.
This time, Xu Fu Chi completely lost its position as the first place in the candy market for many years and fell to the third place in China.
Various categories of candy have appeared in the market one after another, and China's candy market has presented a scene of a hundred flowers.
Even in the face of this situation, Hsu Fu Chi still adheres to the previous large-scale, multi-category bulk marketing method and does not carry out any product innovation.
However, nowadays, people are more critical of food quality and taste, and no longer pursue the quantity of categories. Therefore, even in the New Year, Hsu Fu Chi's sales continued to decline.
The realm of despair. Although the confectionery market has been declining, Hsu Fu Chi has not made major innovations, but has had many problems, and has even become an abandoned object of Nestlé.
In 2019, Hsu Fu Chi's annual sales fell to 5 billion yuan.
Nestlé recorded Hsu Fu Chi's sporadic revenue as other income in its earnings report, because Hsu Fu Chi was not performing well and Nestlé had already gained enough market share, so they changed their position of sharing hardships with Hsu Fu Chi in the past.
Before Xu Fu Chi could recover from the abandonment of his old club, he fell into the trouble of the epidemic.
Due to the sharp outbreak of the epidemic, China's policy is to adopt in-situ risk control and reduce various measures for the Chinese New Year to curb the further spread of the epidemic.
This policy means that many young people no longer buy Chinese New Year necessities, and it has also hindered Hsu Fu Chi's pace of redevelopment to a certain extent.
Before Xu Fuji could show his strength, the problem of food safety arose again, which happened last year when the country had just chosen an open policy.
Hsu Fu Chi's "French Cakes" products were found to contain mold that did not meet the standards.
This was just the beginning, and it wasn't long before consumers found live worms in the Hsu Fu Chi Roll Cakes they bought.
In addition, Hsu Fu Chi did not thoroughly explain the worm's ** in the subsequent mediation process.
Xu Fu's memory is blurry, and people inevitably miss that neat and immaculate little food factory.
The road to riches. Taiwan's Hsu brothers originally jointly opened a company called Hsu Kee Food Factory, which can also be said to be a pretty good food manufacturer in Taiwan. At that time, they ventured into a variety of fields, including a variety of snacks that were commonly found in the market.
In the late 80's and early 90's, the state actively supported the establishment of various food factories and tried to promote the national economy through the great integration of northern and southern cultures.
At this time, the Xu brothers began to pay attention to the mainland.
They agreed that in order to achieve better development, it is necessary to expand sales channels, and the mainland market is undoubtedly a very ideal choice.
However, at that time, many food brands such as Want Want and Master Kong had emerged in mainland China, and they occupied most of their own market share.
This means that it is difficult for the Xu brothers' former small food factory to establish its own sales network in the mainland.
Just when the brothers were helpless, Xu Cheng, as the second child of the Xu family, found that the candy brands on the market were scarce and insufficient, and he thought that he could still find his own business opportunities through candy.
However, with it comes new problems.
There are many confectionery brands on the market, but none of them stand out in particular. So, among so many competing products, how can Xu Ji stand out?
In an after-dinner conversation, they invariably mentioned that the Spring Festival is the peak season for candy sales.
Then I decided on a plan to make New Year's candy.
Although this idea did allow Hsu Fu Chi to successfully beat many confectionery brands in the market and win considerable profits.
Behind the prosperity must be hidden its own bitterness.
Hsu Fu Chi has relied on New Year candy to stabilize its market share for nearly a decade, but with the continuous development of society, more and more new brands have emerged. The Xu brothers realized that Xu Fuji could no longer continue with the status quo and had to find a path more suitable for their own development.
A lot of things happened after that.
However, it is undeniable that the gradual decline of Hsu Fu Chi is closely related to the dwindling demand for sugar.
In the past, people loved sweets, one of the reasons was that in the old days, delicious sweets were rare and could only be tasted during the Chinese New Year, and their scarcity reflected the high demand for sweets.
Sugar gives farmers energy when they work, and when they feel tired or weak, they can be relieved by eating a candy.
However, with the continuous development of society, people's demand for candy has gradually decreased. In daily life, people have been able to consume a lot of sugar from various things, so the place of candy in our lives has also changed.
People are less and less demanding whole candy because they are now consuming more sugary drinks, cakes, and stir-fried vegetables.
Especially in recent years, the number of people with three highs has increased significantly, and people pay more attention to the pursuit of health and high-quality life.
Many people have started to adopt sugar substitutes and even forgo sweets to maintain their health.
As the consumption of candy increases, so does the demand for candy among children, which leads to a growing problem of tooth insects.
In order to maintain their children's health, many parents take fundamental measures to limit their children's intake of candy.
Shift. Although Hsu Fu Chi's failure was influenced by a number of factors, one of the most important reasons was sticking to the rules.
In fact, Hsu Fu Chi has also undergone some changes.
In 2019, Hsu Fu Chi tried to cooperate with a number of celebrities, including Ouyang Nana, Zhao Liying and other popular flowers, hoping that they could expand sales channels for the company's new products, but unfortunately the sales did not meet expectations.
Subsequently, he also tried to win over the veteran star Zeng Zhiwei to win more popularity for his brand.
However, with the successive events of his own brand and Zeng Zhiwei, the previous endorsement has become a constraint.
Recently, Hsu Fu Chi has decided to cooperate with emerging brands. It is reported that they have successively launched new products and co-branded gift boxes with many brands such as Hey Tea, Pokémon, and Bubble Mart, aiming to create products that are more suitable for young people.
It is difficult to start a business, and it is even more difficult to keep a business.
Whether Hsu Fu Chi's former hegemony can maintain its former glory is something to wait and see.