##Why Lao Gan Ma has fallen from grace

Lao Gan Ma, as the former dominant hot sauce, used to exist everywhere, as long as there are Chinese people in the place there is it, it is the legend of the hot sauce industry! However, under the reputation, Lao Gan Ma has also encountered unprecedented challenges, known as the light of national products, the first national brand Lao Gan Ma, is gradually falling altar. In this regard, we can not help but ask: what exactly is the reason for the Lao Gan Ma to fall from the altar, the situation of plummeting revenue?

Why did Lao Gan Ma fall from the altar is how it is, follow me to see it.

Why does the dry rice artifact "Lao Gan Ma" not smell good anymore?

Recently, Lao Ganma revenue decline of more than one billion, so that Lao Ganma once again sparked social concern.

Speaking of Lao Ganma, no one should be unfamiliar with it, as a former dry rice artifact, whether it is a dish dipped in food, or directly mixed with rice, are very tasty, especially under the rice.

I remember that I used to not want to stir-fry vegetables, every time I cook white rice, with Lao Gan Ma under the rice to eat, every time I eat very happy.

Since Tao Huabi son on the throne, in order to innovate, modify the raw materials of chili peppers, resulting in the current Lao Gan Ma lack of previous aroma, taste is not the same.

The different raw materials of chili peppers doesn't make Lao Gan Ma unpalatable, but it's not as tasty as it used to be.

When Tao Huabi was around, he used chili peppers from Guizhou. And Tao Huabi's son, in order to innovate, or to cut costs, replaced the Guizhou chili peppers with Henan chili peppers, but the Henan chili peppers had less aroma, resulting in a much less flavorful Lao Gan Ma than before.

The decline in the taste of Lao Gan Ma, coupled with the impact of a variety of net red products now, burnt pepper sauce, colorful pepper sauce and so on.

This has led to a precipitous drop in Lao Gan Ma's sales, and if it continues without change, what will be the future of Lao Gan Ma?

Why has Lao Gan Ma fallen off the wagon?

Lao Gan Ma, as the former hot sauce overlord, used to exist everywhere, as long as there are Chinese people in the place there it is, it is the legend of the hot sauce industry!

However, under the reputation, Lao Gan Ma has also encountered unprecedented challenges, known as the light of the national products, the first national brand of Lao Gan Ma, is gradually falling off the altar.

Recently, the Federation of Industry and Commerce of Guizhou Province and the Guizhou Enterprise Confederation jointly released the "Top 100 Guizhou Private Enterprises in 2022" list, which shows that in 2021, Lao Ganma fell out of the top ten with a revenue of 4.201 billion yuan, ranking 11th. Sixth, revenue is 5.403 billion yuan, a year Lao Ganma revenue fell 1.2 billion drop of 22.25%, down to the level of six years ago, which is also the original has retired for five years Tao Huabi re-emerged in the third year, but Lao Ganma decadence is not because of the founder's return to glory.

In this regard, we can't help but ask: what exactly is the reason for Lao Ganma's fall from the altar and the situation of plummeting revenue?

"The people who destroyed the six countries, the six countries also, not Qin also. The family of Qin, Qin also, not the world also", for the Lao Ganma to speak of this sentence is a very appropriate proof, let the Lao Ganma fell from the altar of precisely is their own. The main is in the following aspects.

First, the product quality assurance on the reckless

Speaking of Lao Ganma, this is the myth of the Chinese FMCG market, not listed, not financing, not promotion, not advertising, waiting at home, dealers to grab the goods, and the reason for this situation, one of the most important reasons is the quality of the product.

In the past, in order to maintain the taste, Lao Gan Ma has been using the main origin is Zunyi Guizhou chili pepper, due to take the spot cash, so the raw material requirements are very high, the acquisition of raw materials are to be sorted in accordance with the requirements of the chili pepper stalks to be cut off, a one by one, good raw materials to achieve a good quality of the product, so that the competitors are difficult to reach, and let Lao Gan Ma in the quality of the ride to stand out.

And now with the retirement of Tao Huabi in 2014, the company will be handed over to the eldest son Li Guishan and the youngest son Li Miaoxing in charge. The older son is in charge of sales and marketing, while the younger son is in charge of production. However, in charge of the production of the power of the youngest son, the new official first fire burned to their own home, began to dig their own graves of the tawdry operation.

First, the raw materials for the production of chili sauce replacement. Because of the price of raw materials will only be used in the past Guizhou chili pepper into a cheaper Henan chili, Henan chili pepper, although cheap, but in the spiciness, water content are far less than the original Guizhou chili pepper; two is to delete the original sauce artificial brewing process, the use of machines to replace. Seemingly inconspicuous, can make higher profits change, but affects the taste of Lao Gan Ma and the reputation accumulated over the years, but also because of raw materials and brewing process changes, in the past two years, there are always consumers complained that "the taste is not as good as before", "Lao Gan Ma really changed for the worse?" "Lao Gan Ma now tastes like it's not the same as it was many years ago," "The flavor is not right," "I always feel like it's almost everything," and other bad reviews are becoming more and more common. There are even locals in Guizhou who say, "Lao Ganma's raw materials are substandard and rely on the heavy use of MSG to enhance the flavor."

This behavior runs counter to the principle that the product is king in Tao Huabi's era, and has triggered the most serious word-of-mouth crisis in Lao Gan Ma's history. In today's increasingly picky consumer spending, in the era of the product is king, product quality is always the first, the lack of quality assurance products are disliked by consumers is sooner or later, although with the return of Tao Huabi, the company made adjustments to curb the downward momentum of the company's performance, but, after all, it is difficult to come back to the things that have already been missed.

Second, the diversification of the abandonment of the original intention

A lot of foreign well-known luxury brands, the reason why in a hundred years of time to maintain the base of the evergreen, the key reason is to adhere to the main industry on the development of deep plowing ideas, and Lao Ganma does not seem to adhere to it.

In the past, adhering to the principle of "eat as much as you can", Lao Gan Ma has always adhered to the "four no's" - "no loans, no participation" - in its business. "No loans, no equity participation, no financing, and no listing." In order to ensure the quality of its products, Lao Gan Ma once insisted on using authentic Guizhou chili peppers, and in order to ensure the characteristics of its products, the factory was only opened in Guizhou, and insisted on the development idea of not building branch factories in foreign countries, for fear that if the factory was opened elsewhere, the quality and taste of Lao Gan Ma would be affected, which, at the initial stage of development, meant that it would adhere to the spirit of perseverance and craftsmanship in the direction of the development of its main business and would not take any chances. The first thing you need to do is to focus on doing a good job, and Lao Gan Ma has finally become the "Lao Gan Ma" in the hearts of people all over the world.

With the change in the family management, the idea of development was once again diverted. And a lot of short-sighted enterprises, in the face of the temptation of higher profitability industry, it is difficult to hold, and ultimately, Tao Huabi's eldest son indulged in capital, before and after **** participation in 14 enterprises, the amount of contribution of more than 200 million yuan, the investment footprint from the Yunnan-Guizhou Plateau to the East China region, which invested in real estate projects, borrowed the name of the Lao Ganma investment in the rotten building in Kunming, and ultimately, the "Yunrun Tianyang " and several other real estate projects continue to burst out of the quality problems and rotten phenomenon, but also because of a room for two sales in the court, driving a lot of people to look for Lao Ganma, the corporate image has caused a huge negative impact.

Imagine, a business obsessed with capital, an obsession with making quick money in charge, especially the person in charge of corporate sales, and will come up with how much energy and thought in the product?

Third, it is difficult to get rid of the shackles of the brand on the development of new products

The so-called success of the brand, the loss of the brand.

Lao Ganma as a well-known brand, twenty years of brand accumulation of deep-rooted, its brand image in the minds of consumers is the chili sauce, mention Lao Ganma consumers first thought of chili sauce, no other.

In the face of the ever-changing market, Lao Gan Ma has also tried to launch a series of new products to expand its product line and demand for new growth points, such as the development of new products such as tomato chili sauce, spicy dishes, hot pot base, tofu milk, etc. However, these so-called new products did not bring Lao Gan Ma the expected benefits, the reasons for which lie in the following:

Firstly, the new products are much better than Lao Gan Ma's traditional product, tempeh, which has been the mainstay of the company's business for many years. The new products are not innovative but just follow the products on the market, compared to the old brand Fuling squash, rice sweeping light in the field of squash, spicy dishes, as well as Wang Zhihe in the field of bean curd milk, hot pot in the field of the bottom of the sea, sip nursing, grassland red sun and so on there is a huge brand difference, the new products launched by Laogai Ma did not occupy the consumer's mind, the consumer's first reaction to mentioning the Laogai Ma, the consumer's first reaction is still the spicy sauce.

Second, the new product is difficult to get rid of the brand's shackles in the packaging design style. The packaging of the new product still continues the consistent packaging style of Lao Gan Ma's products, although it can highlight the brand image of Lao Gan Ma's products, but it can't make the new product stand out in the market, and it is difficult for the new product to get rid of the influence of the huge halo of the brand, which means that it is difficult to survive in the market.

Third, there is no soul without innovative products. In the era of consumer upgrading, in the era of consumer personalization, consumers are always fond of "new" and "old", but also "color" people and negative "heart" people, they want to see the "new" and "old", they want to see the "new" and "old". "People, they want to see is different and fresh, rather than simply "copy" or "copy", new products without innovation, it means no soul, so the new product turnover is not surprising.

In the development of new products, how to meet the diversified needs of consumers, how to get rid of brand dependence and new product development and innovation, Lao Gan Ma has a long way to go.

Fourth, the wolves, new players continue to enter the field

"Lao Ganma in the field of hot sauce is definitely the industry's leading hegemony, the market share and profits of the leading is unquestionable." Professionals analyze it this way. However, Lao Ganma's industry dominance is also being threatened, the hot sauce market is further eroded by new and old brands.

According to the data of the Blue Book of Hot Sauce Products ("Blue Book") compiled by the Prospective Industry Research Institute, China's production of hot sauce has increased by 80% from 2010 to 2019, and the annual production reached about 5.76 million tons in 2019 alone, with a consumption of about 5.28 million tons. Data from the Ministry of Industry and Information Technology shows that the market size of flavored sauces reached 40 billion in 2018, of which hot sauce accounted for eighty percent; and the growth rate of the market size of the entire hot sauce industry remained above 7%. By the end of 2020, China's hot sauce market could reach 40 billion yuan, with huge potential for future development. The cake is huge, also attracted the old and new brands, cross-border people flocked to the field of competition.

Among them, the old brand Lee Kum Kee and Chili Sisters followed Liao Gan Ma, eyeing the threat to Liao Gan Ma's market position, Haitian Hot Sauce by virtue of its own channels and then the rapid rise at the same time the new players began to enter the field.

In 2014, Sichuan Rice Sweeping Light Food Group Co.

In early 2016, star Lin Yilun created a hot sauce brand called "Master Rice", which was launched on Jingdong, Tmall, Taobao and other platforms. At the same time, comedian Yue Yunpeng and Internet celebrity Li Ziqi both started making hot sauce.

Hubang Hot Sauce, on the other hand, has begun to occupy the takeaway plateau by bundling with Hungry's and Meituan.

In August 2020, Zhongjing Foods, which specializes in mushroom sauce, also made an effort in the field of hot sauce, launching the "Hot and Spicy Team" fresh hot sauce.

In September 2020, Xi'an Sun Foods Co., Ltd, known for its "Ah Xiang Po" hot sauce, introduced a new shareholder, Yuan Qi Forest.

More and more new brands of Internet celebrities are crossing the border. Relying on the Internet and self media, new brands are taking a different approach, and through the online channel, they have found a breakthrough and have captured the stomachs and hearts of the young people through novel marketing methods.

These new brands came into being, the taste of a single Lao Ganma formed a huge threat, these brands want to make a second "Lao Ganma", to become the second "Tao Huabi", so that the Lao Ganma in the market competition is tired to maneuver, the market space is constantly being eaten up. The company's market space is constantly being eaten up.

With so many brands under siege, Lao Gan Ma is not as "fragrant" as it used to be.

Fifth, touch the Internet can not hide the development of fatigue

Time to abandon a person, how fast can it be? A blink of an eye, for a business is the same.

In the traditional channel era, stores, supermarket chains and retail channels dominated the market. The reason for the rapid rise of Lao Ganma is due to the deep plowing of these channels, with the channel advantage and product reputation, Lao Ganma has been in the hot sauce industry to sit on the throne of the leader, however, along with the rise of the Internet, the development of e-commerce, belonging to the Lao Ganma's offline sales of the era has long passed, online sales has become the new sales channels, young people have also become the emerging and can not be underestimated consumer groups.

In order to cater to the wave of the Internet and the new way of consumption, and to please the new tastes of young people, Lao Gan Ma has also started a series of "touching the Internet" actions.

In the channel expansion, the online and offline strategy has been realized. 2018, Lao Ganma Tmall flagship store was officially opened, taking the first step online.

In the same year, the fashionable sweater printed with Lao Ganma's logo was unveiled at New York Fashion Week, and Lao Ganma ushered in the first attempt to rejuvenate the brand.Immediately thereafter, Lao Ganma played cross-border with Men's Clothing, launching "customized gift boxes", "customized handbags "and other trendy items.

In 2019, ghost videos are emerging, in front of the screen for a long time silent Lao Ganma, with a "unscrewing Ganma" ghost advertisement triggered the attention of netizens, and for a time also on the microblogging hot topic list.

2018 Valentine's Day, Lao Ganma official flagship store and Taobao on-line "shopping cart matchmaking" activities, the launch of "1314 bottles of limited edition", these limited edition of the cap of each bottle are printed with "love golden sentence".

Recently, Tao Huabi appeared in the Tik Tok live studio .......

These efforts, although the Lao Ganma gained a brief heat, but now, this is no longer "mending the sheep is not too late" era, the so-called one step slow step slow, the traditional brand as long as to take a nap, the new brand will come to fill in, especially for these more understanding of the new marketing of the new brand to say is more so.

From the end result is that, even if Lao Ganma again, it is difficult to save the tide, but also difficult to cover the fatigue of the development of Lao Ganma.

Six, negative news endless drag brand

The bigger the brand, the greater the responsibility.

In addition to the negative news of the original production of hot sauce raw materials in the front of the product of 12 yuan a catty of Guizhou chili, replaced by 7 yuan a catty of Henan chili, as well as investment in real estate, "a house for sale" and other negative news to the brand image of Lao Ganma damaged.

At one time, in the eyes of the dry rice people like a goddess of existence of the Lao Ganma, in the quality of the complaint is not uncommon. There are expiration date is still on sale, there are eating out of the iron circle, there are eating out of small wooden blocks, there are eating out of small stones, there are eating out of glass slag and even eating out of cockroach incident ......;

At the same time, food quality complaints, in recent years, Lao Gan Ma also due to chili factory fumes wastewater pollution, etc., the cumulative number of complaints has been 20 more than one time, and was named and penalized by the third batch of environmental protection inspectors of the central government.

2018's netizens hot Tencent advertising oolong case event, although "teasing the goose grievance", but also undoubtedly for Lao Ganma increased negative news.

In May 2019, Lao Ganma broke out the incident of formula leakage.

In September 2019, Lao Gan Ma had another fire that damaged 1/3 of its production capacity. In total, the two fires cost Lao Gan Ma nearly 100 million dollars.

A series of negative news disclosure and on the hot search, for the national hot sauce known as Lao Gan Ma is a blow to the brand, the blow is not only the company's brand, but also a blow to the confidence of consumers.

Finally

From the current development status of Lao Gan Ma, in fact, it also reflects the old brand in the development of the helpless, in the face of the challenges of the new era, in the face of the aging of the products, brands and channels, as an old brand how to revitalize in the new market environment, how to be reborn in a new form of nirvana, is the old brand is the old brand of the urgent need to think about and solve the problem of the old Gan Ma, in the face of many problems, the old brand of the old brand is the old brand of the old brand of the old brand of the old brand of the old brand of the old brand of Lao Gan Ma. For Lao Gan Ma, in the face of many problems, Lao Gan Ma needs to form a perfect system at the level of product quality assurance, innovative marketing methods, exploration of emerging channels, new media communication, etc., in order to obtain a better space for development.