"Our 2022 and 2033" from CEOs of Food and Beverage Companies: | New Year Special Issue

Unchanged Identity in Uncertainty

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No one had anticipated the roller-coaster-like experience when visions for 2022 were shared in their New Year speeches or resolutions over 300 days ago, either had they foreseen that the impacts of the macro environment could have been translated so individually into everyone"s life.

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When the intense energy around "big trends" or "dividends" has faded away, "resilience" and "fortitude" become more appreciated and talked in the business realm. When CEOs recapitulate the year 2022, it is also the time to think where we are heading in 2023.

We need to envision the twilight when surviving the darkness before dawn. We need to make every day count even when we can only play it short and steady. We have invited 9 CEOs of food and beverage companies to share their thoughts on the last year and outlook on the new.

"Optimism, pessimism, fuck that; we"re going to make it happen," said Elon Musk. We would like to pass on the strength carried in moments of confidence or warmth that we have found in listening, understanding, feeling, and writing.

We believe there is something to look forward to in 2023.

Terry Tang, CEO & Founder, KAISHAN

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2022 marked the most challenging year since we started the business. This is a fact that we cannot shun away. However, it is also in this year that we became more focused, making solid progress in improving cost efficiency. We have managed to profit despite waves of pain and to build the brand further with the retained profits.Consumer goods is a racetrack of endurance running, and endurance is the bottom-line thinking of any businessperson. The ability of a business to generate "blood" for itself in a healthy and sustainable way is the prerequisite of making the team feel secure and giving us the confidence in pursuing long-term goals.

In addition, what made us proud last year was formulating the the 13th Baijiu aroma standard Pure-Aroma Baijiu in collaboration with China National Food Industry Association.This is something Volcancraft has dreamt to do since its establishment – to be the trailblazer of pure-aroma baijiu. We gave public access to all our patents in the past October, making our own system "open source", with the aim to bring more vigor to the baijiu industry and unleash fresh potential in the red ocean market. Meanwhile, we want to bring more possibilities to consumers. With more social consumption scenarios coming back in 2013, I am optimistic about baijiu.

As the market regains rationality about and accessibility to savory type of baijiu, I believe this year will see coexistence of multiple aroma types, in terms of both diversity and historic background.The big goal for us is to establish and constantly improve an open-source system for pure-aroma baijiu, implementing the core strategy in four dimensions – accreditation, technology accessibility, flex manufacturing, and competence building. It will take a long time to make the cake of pure-aroma baijiu bigger. Fortunately, making baijiu itself takes a lot of patience, and this is what Volcancraft chooses to do. Looking back on the past four years, I have been in a hurry as a founder who is more used to setting KPI and managing progress. The tests over the years let me realize that it is not wrong to be responsible for numbers and progress, but more importantly, I shall be responsible for tasks themselves. A founder shall think more about making things right rather than making indicators right as measurements of things.

New Year greeting from Terry Tang

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Mengge Sun, Founder, Hope Water

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Hope Water put the team together in 2020, with no experience in a market that has not been affected by the Covid-19. The "lost three years," as it is called by the industry, has given us the time to think calmly and deeply and the patience to build the foundation, about which I feel we are lucky.

Hope Water could compete with neither faster-faced start-ups in marketing budget nor developed brands in market awareness. Looking at the results, our performance in some new models or scenarios were qualified and attractive to distribution partners. Meanwhile, distributors who are drawn to us are mostly young and long-term-oriented. They encourage us to focus on healthy products, refining retail models, embracing new value networks, delivering the message of Hope Water, and to leave the rest to their capable hands.

The Hawthorne Drink features a sour taste and long-time simmering in the making process. We see our development in the same way – it takes time to turn sourness into happiness. Life is not always easy. We try to extend our flowering period, keep cultivation, and reach small milestones after some hardship, which is also a form of happiness. Distributors who were born in the 1980s resonate more with our philosophy, and some of those born in 1970s are willing to embrace small changes and take on a new brand, one that they will be proud of in the future, thanks to their resource at hand. This is how I feel about it.

In my and partners" perspective, we are more refraining from doing things, because we see a clear growth path for our brand so that we know what we must and must not do.

Last year, we experimented with a lot of scenarios but did not convert directly. Instead, we tried to empower the offline channels. We want the contents of the brand to be thoroughly consistent, so that people see the coherence.

New Year greeting from Mengge Sun

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David Zhang, President Asia, OATLY

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2022 was an unusual year for man people. Challenges were many, but uncertainties have also grown the resilience of the team and company. New opportunities also came along.

2022 saw continued efforts of OATLY in the café channel and the launch of 250ml portable version based on its classic Barista Oatmilk, which brings the "oatmilk+coffee" model to the retail channel. Oatmilk is going beyond café shops and into consumer lifestyle.

New products based on local innovation in the Asia Pacific were also launched, providing consumers with more choices for oatmilk-based products.

For example, 250ml portable versions in oatmilk and other flavors add healthy new choices to breakfast and afternoon tea. Innovative flavors, like Salted Toffee and coconut, are very well received by consumers upon launch. OATLY successfully made plant-based frozen dessert a hot trend in the coming summer after launching OATLY oatmilk ice cream bars in May.

As more OATLY products come into a wider range of retail channels, consumers can buy in supermarkets, convenience stores, e-commerce platforms, and new-retail channels. In the past Double Eleven shopping frenzy, OATLY registered the first place of the plant protein category on T-Mall and JD and the No.2 of the drinks category on T-Mall.

OATLY has also developed Tea Master specifically for tea drinks based on insights of the Chinese market. So far Tea Master is offered in over 50,000 stores, and OATLY cooperates with new-style tea drink brands to accelerate accessibility of plant-based tea drinks, with several best-selling oatmilk bubble tea drinks developed.

OATLY comes into a wider market by working with partners who share the vision, bringing oatmilk to more people"s life. We stay committed to the development of plant-based products in collaboration with industry partners, with the hope to add vigor and creativity to the industry.

New Year greeting from David Zhang

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Amos Ma, Chairman of Amos Food, founder of Amos and Biobor

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Amos Food started business deployment in overseas markets very early. Export was considerably affected due to the pandemic in other countries and skyrocketing freight costs in 2021. Fortunately, sweets retail grew significantly in Canada and the U.S. as Covid-19 controls eased in 2022. In the same year, sweets business in China managed to grow to some degree despite not achieving our target due to impact of Covid-19 in some parts of China. We believe the market will continue to turn for the better in 2023 as consumer confidence continues to recover, and our large modern sweets manufacturing plant in Guangdong will be completed soon.

Uncertainties in the macro environment has indeed had impact on the pace of company development, but our conviction in brand globalization for Amos Food remains intact. Brand building in global markets will be one of the priorities of 2023. It is a hard thing, but it is the right thing to do. We believe in long-termism.

Online-offline integration matters a lot to us in China. Amos Food focused on development of offline channels over the past years, and changes in consumption scenarios and purchase channels dictate that our sales team must possess capabilities for new ways of marketing and sales. Only with united efforts in online and offline channels can we build synergy between the product power and channel power. Amos Food is a company with comprehensive competence in manufacturing, R&D, distribution, branding, and marketing. We can take the patience to grow our online business and build a team with total marketing and sales competence.

Our mission is to be "a sweet ambassador to the world". We appreciate and adapt to the health awareness and sugar reduction trends in the industry by launching nutritional sweets and sugar-free sweets to respond to consumers demand of health. We believe in using sugar in a scientific and healthy way. In addition to functionality, sweets carry an emotional value. It makes people feel happy and lift their moods. We feel extremely proud as a sweets maker when we see the family happiness and joy when parents buy festival sweets for their kids.

New Year greeting from Amos Ma

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Zheng Xia, Founder & CEO, Ksana Cha

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2022 to us is surely "lost and found."

We came into the market a bit late, officially starting to promote our products at the end of 2021. The blow came before we even consolidated our first growth curve in 2022, and we only had active control in Q1. It dawned on us that the factors that we thought were constants could actually become variables.

However, there was something that we were satisfied with ourselves. Putting the external factors aside, we had validated a lot of insights and assumptions through the year.For example, when we built a closed loop from trying, purchase, top-up, to repurchase based on backend data, we found that KSANA TEA was able to cover most of the tea consumption of a consumer. We can stand next to the consumer all the time as his or her recognition of tea upgrades.

Therefore, we are still committed to our grand direction in 2023, with continued competence building and adjustments to be made in the pace of growth.

Firstly, to allocate more efforts and resource to product refinement. In front us is the Chinese tea industry which is till traditional and not yet fully merged into consumer goods. On the one hand, our team applies mature schemes from other sectors to the tea sector thanks to their rich experience in general consumer goods. On the other hand, we start to do the hard thing from the very beginning to build a meaningful moat around our products.

Secondly, to target users more precisely. Channels shall be built to provide full accessibility, while a brand must figure out its trade-off in target users. A DTC brand has to build channels and the brand at the same time, but each has its own focus. We will be more focused on products and marketing to attract users in the same frequency band with our brand as a signal emitter.

At the personal level, I expect myself to be more courageous in 2023.

I must grow my capacity and the ability to withstand and process information and impact that flood in, which is very important. However, when the cognitive ability at this rational level is built and consolidated, I, as the founder, must have the courage to make the decisions at the mental level to make changes happen, which directly confronts the heart.

New Year greeting from Zheng Xia

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Le Yang, Chairman of Jinhe Industrial, Founder of LeSweet

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Time flew in 2022. We went through challenges and tests. Our gratitude goes to every client and partner who have stood with and trusted us.

In 2022 LeSweet cut some large-scale events, less efficient campaigns, and scattered product development plans, and focused more on improving organizational structure, iterating core products, upgrading supply chain, and stepping up communication efficiency with customers. We believe that our ideas and values will get across to users through sustained and thoughtful communication if we focus enough on our vision, main offering, and core customers.

Therefore, instead of bombarding consumers, we choose to take a differentiated and yet focused approach to do branding, marketing, and sales. Besides, we must not move our eyes off long-term investment and commitment because of short-term financial stress.Efficiency improvement and balance shall also be taken care of.

When it comes to business portfolio, we have two key produce lines on the consumer end, namely zero-calorie sugar and zero-calorie syrup, in addition to which we have explored compound condiments for snack food and collaborations for inspirational products. We are interested in playful, meaningful, and valuable collaborations with industry partners, which interpret healthy sweetness in various ways and build stronger consumer awareness.

In addition, 2B business performance exceeded our expectation for 2022. Demand of sugar reduction is strong in tea drinks, coffee, and bakery, and we have done a lot with many partners. We will step up efforts in co-development around sugar reduction in 2023, supporting partners in tea drinks, coffee, and bakery in all links from trends, R&D, manufacturing, to marketing. We are committed to offering one more sweet option to hundreds of millions Chinese consumers in the mega health trend.

I think we need to guard optimism with prudence in 2023, allowing the market to recover steadily and robustly.

New Year greeting from Le Yang

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Neil, Founder, BLUE DASH

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The root reason that we have not only survived but also even thrived a little bit was that there was no big flaw with our strategies or tactics. We have been healthy all the way.

We insist on the Internet business logic, but to us it means long-termism rather than "toss high and spike high." All the cash-burning or short-term surge is trading off short-term interests for long-term benefits, like sacrificing short-term profits for a bigger market share or a bigger platform.

Secondly, we insist on things that we believe are right. I think Internet put things on the same line. When we formulate rules, internal and external rules alike, we ensure there is equilibrium among channels, suppliers, and clients. A realistic challenge, for example, is that we run into things that threat to break our rules, to which we must say no. For example, 1 million investment in one store and half a million in another. Either you have over invested, or you bring price inequality into the pricing system. Breaking rules would lead to ramifications in regional tactics, which may be amplified with time.

Our actions in 2023 will be centered around "cocoon breaking." Like a pyramid, we play through level one, two, three, penetrating level by level and making an ever-increasing impact. Under the big goal, we need to cover more channel and more consumers and to fine-tune SKU accordingly.

We worked intensively in the nightclub channel in 2022 and made a good impact among people who are very active in night life. We aim to cover a wider scale of alcohol drinkers in 2023, like live houses and KTVs. Many people may have not been to nightclubs, but we see great potential in people who show up in general nightlife scenarios, like university students covered by Helens.

On the brand end, we will expand from electronic music festivals, nightclub events, and camping in the past to bigger circles, like cross-industry collaborations and product placements, to make a broader impact.

Team development is another priority on my 2023 agenda. At the end of the day, the team builds products, brands, and channels. In the first couple of years, the capabilities and effectiveness of the founder matter a lot. When the company goes to a bigger stage, I will spend more time on motivating, growing, and optimizing the team to improve the overall combat effectiveness.

New Year greeting from Neil

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Xin Xiao, Founder & CEO, BENWEI

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All the errors that could happen in 2022 happened amid all uncertainties. We are more resilient and efficiently responsive to uncertainties and sales in the frontline after continuous improvement of "zhong tai", or encapsulated operational models. New product development and all links of operation are more efficient.

We attach great importance to the up-stream source of meat and look for meat that is suitable for making sausages and that can be traced and tracked by consumers. As a result, we upgraded from the traditional black pig breed to the black pigs that we source from snow mountains in Xiao Xing An Ling.

When it comes to product development, we launch two to three flavors every quarter. We cannot ensure that every new product will sell very well, but we launch new ideas on a seasonal basis and test unleashed needs in this way. For example, this year we have launched truffle and wagyu roasted sausage, coconut and chicken sausage, salted yolk and glutinous rice sausage, and chestnut and soy sauce pork sausage.

In addition, user case development and consumer perception cultivation are also important. This year we have launch the Co-create Plan, Camping Support Initiative, and collaborations with ski resorts.

Development of infrastructure and team is complete. Our team will be able to handle even business doubles. The chain that our team covers is extremely long, from R&D, prototyping, manufacturing, quality control, logistics, order fulfillment, front-end operation, customer service, all the way to offline store management. Every position is linked to another.

BENWEI made over RMB 200 million revenue in 2022, which is still primary-school level in the hundred-billion-scale segment of meat processed food. Any plant or brand of processed meat has around RMB 1 billion scale minimum.

Looking at our offering to consumers, people may also have felt that a lot more is going on in this category. We are not the only one brand that makes tens of millions revenue a month from consumer sausage products. Another two or three new brands have reached this scale. The top 10 sausage brands in T-Mall Double Eleven shopping spree were most only contract manufacturing brands, and we were the 10th position. This year we have made the NO.1 sausage brand on T-Mall.

We have confidence in 2023 when consumer goods are expected to recover. The goals for this year are as following:

Firstly, intensively cultivate offline channels. Deep layers of distribution and offline channels are challenges that we must solve. Now we have spent a lot of efforts on set up offline channels, including being shelfed in boutique supermarkets nationwide, like Hippo Fresh. We shall reach full coverage of boutique supermarkets in east China by the end of this year.

Secondly, continuously cultivate up-stream resource, including optimization of farms and capacity.

Thirdly, accurately capture consumer needs and respond with products made to needs. Like in coffee and milk tea drinks, hopefully we can forecast or hit the flavors that consumers like in every season.

If Yellow Swan stands for high quality of eggs and Simple Love yogurt, which brand epitomizes high quality of meat? We look forward to being a leading brand of this category in 2023.

New Year greeting from Xin Xiao

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Jerome Chen, Founder & CEO, FOODVIO

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The pace of FoodVio was totally disrupted in 2022. Activities in restaurants and offices nearly came to halt in Beijing from May to June, and there was another big blow in November. We had almost zero revenue in those two months. Out team managed to achieve beyond expectation despite gloomy business environment, which made me very proud.

We started the business at the beginning of last year. At that time, I said we were going to launch 20 products in one year, and it turned out that we had taken 80 to market by the end of the year. It was not easy to do. Apart from challenges in product research and development, there was overwhelming complexity in the supply chain. However, our small team managed to achieve 100% product delivery amid all adversities, which indicates that we have laid very solid foundation in the supply chain.

Faced with offline activities shutdown, we pivoted our strategy in the shortest time possible, moving our 2C business, which was planned for later launch, to a much earlier stage.We built our store on TikTok and stepped up sales efforts on Youzan, both of which translated into decent performance in Q4. In addition, we decided to kick off in retail channels. Very soon we came into partnership with Hualian based on the medium-to-high-end positioning of our brand. Nailing down the agreement in December, our products appeared on shelves of 20 Hualian stores in Beijing at the beginning of January. At the moment, many products are sold out, which is a very good sign.

I believe the market is on an express way of recovery in 2023. We will walk on two legs – 2B and 2C – in the future to spread the risks. Beijing will be our first fortress for offline penetration and more cities will be covered. Our confidence is booming for 2023.

New Year greeting from Jerome Chen

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About SONO CEO Interview

SONO CEO Interview is an interview series under SONO CEO CLUB.

SONO CEO CLUB

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It is committed to making valuable stories "seen" through in-depth dialogues with the foremost business leaders in the food and beverage realm who share their management experience and thoughts as executives and entrepreneurs amid changing business environment.

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