Summary of Key Points
The established food company Wangwang has recently drawn attention due to an internal letter from its founder, Cai Yanming. The letter clearly states that the company is facing a "serious operational crisis." Although revenue reached a record high in the fiscal year 2025 (RMB 24.4 billion, an increase of 3.8%), profits decreased by 11.5% year-on-year (RMB 3.837 billion). The root of the problem lies in its reliance on old products such as Wangzai Milk and Snow Crisps for 30 years without innovation, an outdated distributor model that has led to customer loss, and channels that have not kept up with changing consumer trends. Consumers are advocating for "reducing sugar content" and embracing new distribution channels. Wangwang responded by announcing it would adopt these suggestions and showcased its low-sugar products. The article argues that Wangwang does not need to rush to create new hit products; instead, by revitalizing old products, upgrading its channels, and focusing on effective innovation, the company can return to a path of growth.
Detailed Analysis
1. Revenue Growth but Profit Decline: Why More Sales with Less Profit?
Wangwang's performance paradox is similar to a restaurant with more customers but lower profits: revenue growth comes from the scale of its old products, but profit decline is due to the decrease in profit margins on these products—due to rising raw material costs and frequent promotions. New products (such as Banana Milk and Bond Coffee) have not become successful enough to contribute significantly to profits. The founder's statement about relying on a few core products for 30 years indicates that the "dividends" from these old products have been exhausted, and consumers are losing interest in them. As a result, the company has to rely on price cuts to maintain sales, leading to lower profits.
2. Consumers Calling for Less Sugar: The Health Trend as a New Battleground
Netizens have labeled "Wangwang's biggest competitor is sugar," highlighting the current health-conscious trend. People are wary of sugar (fear of weight gain and health issues). Although Wangzai Milk is classic, its high sugar content makes parents hesitant to give it to their children, and young people avoid buying it. Consumers' requests for less sugar and improved ingredients reflect a desire for low-sugar or sugar-free options (as seen with the success of Yuanqi Forest's sugar-free drinks). Wangwang's response by introducing low-sugar products shows that it understands this demand, but the key is whether it can maintain the product's appeal while reducing sugar content—after all, loyal fans value the original taste of Wangzai Milk, and any formula changes must balance health and flavor.
3. No Need to Replace Old Products, Just Change How They Are Used: The "Second Spring" for Wangzai Milk
The article suggests that instead of creating a completely new product like Wangzai Milk, the company should expand its use cases:
- Currently, it is mainly consumed by children; now, it could be paired with bread for breakfast, offered as an afternoon snack in offices, or used as an energy supplement after exercise (with added electrolytes).
- It can collaborate with brands like Luckin Coffee to create limited-edition packaging, or partner with popular games like Honor of Kings.
- Product specifications can be adjusted to include family-friendly and portable options.
Oreo is a good example: it hasn't launched new blockbuster cookies but has maintained popularity through partnerships with brands like the Forbidden City and Marvel. Wangzai Milk could follow this approach to give its old products a fresh lease on life.
4. Channels Must Keep Up with Trends: Stop Relying Solely on Large Retailers
Wangwang's traditional channels (wholesale and large retailers) account for nearly 70% of its revenue, but these have been declining for two years, with a double-digit drop in the first quarter of 2026. The reason is that young people prefer shopping at snack stores (such as Zhao Yiming and Haote Mai) and instant retail platforms (like Meituan Buy Food)—these offer better prices, a wider range of products, and convenience.
Compared to brands like Yanjin Puzi, which have made emerging channels their primary source of revenue (over 30%), Wangwang is slow to adapt. It needs to accelerate cooperation with these new platforms and even customize products for them (e.g., small promotional packs) to attract new customers.
5. Innovation Should Be Targeted: Focus on Key Areas
Wangwang previously tried launching 50 new products per year and opened Wangzai-themed stores and physical Bond Coffee shops, but neither was very successful. The article advises focusing on existing categories rather than trying too many new things simultaneously. For example, it could focus on developing low-sugar versions of Wangzai Milk or refine Bond Coffee in key markets before expanding nationwide. Innovation should be strategic and focused to maximize resource effectiveness.
Conclusion
Wangwang's issue is not a lack of innovation but the failure to target its efforts correctly. What the company needs is to deepen the value of its existing products, adapt its channels to current trends, and focus on innovative solutions that truly resonate with consumers, thereby returning to a path of growth.