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Our reporter Zhou Mengting (chinatimes.net.cn) reports from Beijing

Wahaha has set off a storm. On July 18, a letter signed by Zong Fuli to all employees of Wahaha Group quickly spread online. The content showed that Zong Fuli decided to resign from the position of vice chairman and general manager of Hangzhou Wahaha Group Co., Ltd. (hereinafter referred to as "Wahaha Group") from today (July 15) and would no longer participate in its management. As soon as this news came out, it immediately exploded on the Internet and quickly became a hot search on major platforms.

Since Zong Qinghou passed away in February this year, Zong Fuli has been taking over the companies from her father. On July 11, she also took over Lhasa Wahaha Food and Beverage Marketing Co., Ltd. Now that she has suddenly resigned, the market is more worried about the future of Wahaha. The beverage market has never lacked competition, especially this summer, when various beverage companies have been engaged in a fierce price war. Wahaha, which is already 37 years old, can hardly hide its middle-aged fatigue. It has not been seen in the list of popular beverages in the market for a long time.

Zong Fuli resigned?

Less than half a year after Zong Qinghou's death, news of Zong Fuli's resignation was reported.

According to the above letter, recently, the Shangcheng District People's Government of Hangzhou and some shareholders of Hangzhou Wahaha Group Co., Ltd. questioned the rationality of Zong Fuli's management of Wahaha Group since the death of Chairman Zong Qinghou, which made it impossible for Zong Fuli to continue to perform her management duties for Wahaha Group and its holding companies. Therefore, Zong Fuli decided to resign from the positions of Vice Chairman and General Manager of Wahaha Group from today and no longer participate in its management; Zong Fuli stated that she had delivered the above resignation letter to Hangzhou Wahaha Group Co., Ltd. and all its shareholders, and also urged the relevant parties to take a responsible attitude and re-elect the general manager in a timely manner in accordance with the procedures stipulated in the Articles of Association and have him perform management duties to ensure the normal operation of Wahaha Group and safeguard the common interests of Wahaha Group, customers and all employees in accordance with the law.

According to Tianyancha, the shareholders of Wahaha Group mainly include Hangzhou Shangcheng District Culture, Commerce and Tourism Investment Holding Group Co., Ltd. (hereinafter referred to as "Shangcheng District Culture, Commerce and Tourism"), Zong Qinghou and Hangzhou Wahaha Group Co., Ltd. Grassroots Trade Union Joint Committee (Employee Stock Ownership Association). The three hold 46%, 29.4% and 24.6% of the shares respectively. It should be noted that the wholly-owned controlling shareholder of Shangcheng District Culture, Commerce and Tourism is Hangzhou Shangcheng District State-owned Capital Operation Group Co., Ltd., which is wholly-owned by Hangzhou Shangcheng District Finance Bureau.

Regarding this matter, on July 18, a reporter from the China Times asked relevant Wahaha staff, but no one responded as of press time. At the same time, the reporter called Wahaha Group's largest shareholder, Shangcheng District Culture, Business and Tourism, but no one answered the call.

The official website shows that Hangzhou Wahaha Group Co., Ltd. was founded in 1987. Under the leadership of its founder Zong Qinghou, it has now developed into one of the world's leading food and beverage manufacturers. After Zong Qinghou died of illness in February this year, the burden of Wahaha fell on his daughter Zong Fuli.

Regarding the rumored resignation of Zong Fuli, Shen Meng, director of Xiangsong Capital, analyzed to our reporter that although Wahaha was built up by Zong Qinghou, it is a mixed-ownership enterprise with a relatively large stake in state-owned assets, not a privately controlled enterprise by Zong Qinghou. Therefore, Zong Fuli's tenure at Wahaha needs to be approved by all shareholders or at least a majority of them.

Rebalancing challenges in the post-Zong Qinghou era

After Zong Qinghou's death, Zong Fuli continued to take over her father's businesses. A reporter from the China Times checked Tianyancha and learned that Zong Fuli has successively taken over Hangzhou Wahaha E-Commerce Co., Ltd., Hangzhou Wahaha Qili Food Group Co., Ltd. (hereinafter referred to as "Qili Food"), Hangzhou Hongzhen Catering Management Co., Ltd. (hereinafter referred to as "Hongzhen Catering") and many other companies.

The latest takeover took place on July 11, when the person in charge of Lhasa Wahaha Food and Beverage Marketing Co., Ltd. was changed from Zong Qinghou to Zong Fuli. At the same time, there were also senior management personnel on record, with Zong Qinghou and Guo Hong withdrawing and Zong Fuli and Yan Xuefeng added. In addition, senior management personnel changes occurred in many companies taken over by Zong Fuli.

However, Tianyancha shows that Zong Qinghou is still the legal representative and one of the shareholders of Wahaha Group. The company's earliest change record is still in August 2019. Zong Fuli's name is not on the current list of senior management of the company.

In addition to inheriting her father's business empire, Zong Fuli also started her own business. After entering the food and beverage industry in 2004, Zong Fuli started with a start-up capital of 10 million US dollars. From acquiring land, purchasing equipment, building a team to setting up factories, she built Hongsheng Beverage Group. This was Zong Fuli's first battle to "establish her own faction".

Public data shows that in 2011, Hongsheng Beverage Group built 15 production bases across the country. In 2014, it was selected as one of the top 500 private enterprises in China and the top 500 private manufacturing enterprises in China. The Zhejiang Merchants Manufacturing Top 100 list shows that in 2022, Hongsheng Beverage Group's revenue was 10.421 billion yuan. In addition to Hongsheng Beverage Group, Zong Fuli also has other companies. According to Tianyancha, as of July 18, Zong Fuli served as the legal representative of 37 companies and served in 179 companies.

It is worth noting that the management of Hongsheng Beverage Group has also changed recently. According to Tianyancha, on July 5, two directors of the company, Shi Lijuan and Shi Youzhen, withdrew, and Zong Fuli's position was changed from chairman to executive director. At the same time, the business scope was changed to add "leisure and sightseeing activities". Public information shows that Shi Youzhen is the wife of Wahaha founder Zong Qinghou and the mother of Zong Fuli.

In this regard, Shen Meng analyzed to our reporter that "Although Hongsheng Beverage was founded by Zong Fuli, it is also a subsidiary company that survives around Wahaha. In particular, whether there is improper transfer of interests between Hongsheng Beverage and Wahaha, which is relatively controlled by state-owned assets, is still the focus of controversy. Therefore, in addition to internal disputes during the transition from the old to the new, there may also be a rebalancing between state-owned and private capital in the post-Zong Qinghou era."

After Zong Qinghou's death, the market once stirred up nostalgia and pursuit of the Wahaha brand. Zhu Danpeng, a Chinese food industry analyst, told the China Times reporter that "when Zong Qinghou passed away, the entire public opinion was biased towards Wahaha, which also greatly boosted its overall sales. At present, the news of Zong Fuli's resignation has not been confirmed, and Wahaha's future development prospects are still subject to unpredictable risks."

Beverage Wars: The Outdated "It"

At present, the news of Zong Fuli’s resignation has not been finally confirmed, but in the current competitive environment of the beverage market, Wahaha’s own situation is already difficult.

As a well-known domestic food and beverage enterprise group, Wahaha Group's AD calcium milk has accompanied the entire childhood of the post-90s generation. According to the official website, the company has been in business for 37 years, and its products cover more than 200 varieties in more than ten categories, including packaged drinking water, protein drinks, carbonated drinks, tea drinks, fruit and vegetable juice drinks, coffee drinks, and plant drinks.

In this summer, competition has become more intense in both the packaged drinking water and beverage markets. In April this year, China Resources Beverage submitted a prospectus to the Hong Kong stock market in an attempt to impact the capital market; afterwards, Nongfu Spring, which insists on making natural water, made a surprising move and launched a new green-packaged pure water product.

At the same time, Nongfu Spring took the lead in launching a price war for packaged drinking water, which is still ongoing. On July 10, our reporter learned from Nongfu Spring's Douyin official flagship store that the price of this specification of pure water is still 9.9 yuan; at the same time, when the reporter visited two Wumart supermarkets in Xicheng District, Beijing, he learned that Nongfu Spring's green bottled pure water is still on sale, with a promotional price of 8.9 yuan for 12 bottles of 550ml green bottled pure water, equivalent to 0.74 yuan per bottle; at the same time, in the two Wumart supermarkets in Xicheng District, Beijing, other manufacturers are also following up, such as 12 bottles of 555ml Yibao at a promotional price of 10.9 yuan, and Pepsi Pure Water 12 bottles of 550ml at a promotional price of 9.5 yuan.

Competition in the beverage market is even more intense. In addition to the above-mentioned packaged water companies, there are also Dongpeng Beverage, Yuanqi Forest, Dayao Beverage and other players. This summer, various companies competed for the sugar-free tea market, and the price war was also fierce. Although Wahaha, which has entered middle age, has many beverage products, it is difficult to find a hit. In the emerging categories such as functional drinks, 0 sugar soda sparkling water, electrolyte water, and sugar-free tea that have been popular in recent years, although Wahaha has also launched corresponding products, it is difficult to see its presence in the list of category hits.

Regarding the current development status of the beverage market, Wang Hongdong, director of the Canbaodian Research Institute and catering analyst, analyzed to our reporter that "the obvious trend in the beverage market is more segmented, price competition is more intense, and channels are also changing. Live streaming e-commerce, mass-market snacks, and catering are all growing rapidly." Against this background, can Wahaha, which has experienced personnel turmoil, withstand the attacks of its rivals?

Editor-in-charge: Huang Xingli Editor-in-chief: Han Feng