风暴中 娃哈哈的守与困

This article outlines the development of Hangzhou Wahaha Group over the past two years, following founder Zong Qinghou’s passing and his daughter Kelly Zong Fuli taking the reins, with key findings as follows:

1. Performance: Driven by nostalgia consumption triggered by Zong Qinghou’s death, Wahaha’s revenue exceeded 70 billion yuan in 2024, and grew an additional 500 million yuan to maintain the 70 billion yuan scale in 2025. Its market share in the purified water segment jumped from 5.8% in 2023 to 16% in 2025. However, growth slowed sharply in Q1 2026: national distributor shipments only hit 15% of quarterly targets, large distributors with annual sales over 10 million yuan saw a 20% year-over-year sales drop, and excessive inventory is widespread across the channel.

2. Internal management: Leadership turmoil has persisted since Zong Fuli took over. All four heads of core business divisions at Hongsheng Group—Wahaha’s core production arm—have left the company. Hongsheng is currently outsourcing non-production operations and planning 30% headcount cuts, leaving the entire Wahaha group in a state of operational disarray.

3. Product issues: Wahaha has not launched a new blockbuster product since it debuted Nutrition Express in 2005. It essentially halted new product R&D by the end of 2024, and its high-priority tea beverage line lacks competitive strength, leaving the company with insufficient long-term growth drivers.

The development of Wahaha outlined in this article offers multiple key insights for FMCG brand owners, as detailed below:

1. Consumer behavior: Consumers rarely base purchase decisions on negative gossip about brands; even though Wahaha was mired in multiple public relations controversies in 2025, its sales did not experience a sharp decline. Meanwhile, nostalgia consumption only delivers short-term growth and cannot sustain long-term performance; the market ultimately rewards product quality and innovation.

2. Product R&D: Continuous development of hit products is the core of sustained long-term growth for brands. The fact that Wahaha has not launched a new flagship product after 2005 and halted new R&D directly led to its subsequent sales decline fully demonstrates the importance of ongoing product iteration.

3. Brand succession: If leadership transition after a founder’s departure triggers internal turmoil, it will directly impact market performance. Brands need to prepare in advance to ensure a smooth handover, and prevent internal disarray from damaging channel and consumer confidence.

For FMCG sellers, this article provides a range of risk warnings and actionable lessons, with key takeaways as follows:

1. Risk warnings: Growth built on overreliance on nostalgia consumption and halted new product R&D is unsustainable. After taking over, Zong Fuli set an aggressive 50% growth target for distributors, which directly led to widespread overstocking. By 2026, many large distributors recorded a 20% year-over-year sales drop and face extreme inventory pressure.

2. Growth opportunities: There is still room to gain market share in the traditional packaged water track. Wahaha’s purified water market share grew from 5.8% in 2023 to 16.63% in Q1 2026, proving that growth opportunities still exist in mature traditional categories.

3. Key lessons: Internal management turmoil at the brand level directly hits channel performance. Sellers should maintain internal team stability to avoid leadership changes eroding channel confidence, and should continuously roll out new products instead of relying excessively on pushing old products through overstocking to hit volume targets.

The updates on Wahaha and its contract manufacturing arm Hongsheng Group outlined in this article offer valuable insights for FMCG production factories, as detailed below:

1. Production transformation direction: Hongsheng is currently outsourcing non-production operations, including energy management, property management, warehousing and laboratory services, four non-core business segments, and planning 30% layoffs. This reflects a growing trend among manufacturing enterprises to adopt asset-light operations and refocus on core production, which is a key transformation direction for upstream production players.

2. Product demand: The FMCG market has sustained demand for continuous product iteration. Wahaha’s performance decline following its halt to new product R&D shows that factories need to proactively partner with brands to support new product development, rather than only producing legacy goods, in order to maintain stable order volumes.

3. Risk management: Leadership turmoil triggered by brand founder transition can ripple through to upstream production. Factories need to anticipate changes at their brand clients in advance, adjust their own production and management strategies in time, and mitigate risks from performance volatility.

The development of leading FMCG brand Wahaha outlined in this article helps service providers identify industry pain points and new business opportunities, with key insights as follows:

1. Core client pain points: First, leadership turmoil is a common issue during family brand succession. After Zong Fuli took over, ongoing personnel changes and internal disarray directly led to eroded channel confidence, distributor overstocking and sharp performance declines, which is a core pain point for leading brands navigating succession. Second, slow new product iteration is a widespread problem for legacy FMCG brands; Wahaha has had no new blockbusters since 2005, and growth stalled immediately after it halted R&D, which is a common pain point for established brands.

2. Industry development trend: A growing number of manufacturing enterprises are outsourcing non-core businesses to focus on their core operations. This creates abundant business opportunities for B2B service providers, as demand for outsourcing in property, warehousing, human resources and laboratory services continues to grow. Service providers can expand their business offerings to target this growing demand.

The channel and sales data for Wahaha in this article offers valuable reference for FMCG-related retail platforms, as detailed below:

1. Traffic operations reference: Nostalgia-driven public events can trigger short-term traffic spikes. After Zong Qinghou’s passing, sales at Wahaha’s official Douyin flagship store surged 500% even without any live streaming broadcasts. Platforms can capitalize on traffic opportunities from such widely followed public events, adjust traffic allocation for related brands to drive overall platform growth.

2. Cooperation risk mitigation: If a legacy brand faces internal management turmoil and halted new product R&D, these issues will quickly ripple through to the channel, leading to overstocking and sales declines. When partnering with such brands, platforms should monitor the brand’s internal stability in advance to mitigate cooperation risks.

3. Recruitment direction reference: There is still room for share growth in the traditional bottled beverage category, and leading legacy brands are still actively expanding market share. Platforms can prioritize these leading brands in traditional categories to secure high-quality partnership opportunities.

The development of Wahaha after its leadership transition outlined in this article provides valuable research material for scholars of the FMCG industry and family business succession, with key insights as follows:

1. Industry perspective: Established FMCG enterprises generally face growth bottlenecks. After reaching a peak revenue of 78.2 billion yuan in 2013, Wahaha’s revenue stagnated at around 46 billion yuan for years. It returned to the 70 billion yuan mark in 2024 driven by nostalgia consumption, but still faces challenges including a product gap and ongoing management turmoil. Its 100 billion yuan revenue target remains unmet, which reflects the common predicament of transformation and breakthrough for legacy FMCG enterprises.

2. Family business succession perspective: Succession after a founder’s sudden departure can trigger significant internal turmoil. Following the leadership handover at Wahaha, ongoing personnel adjustments, departures of core executives at Hongsheng, and outsourcing and layoffs of non-core businesses, plus internal disarray directly led to performance declines. This is a new typical case for family business succession research, and reflects common corporate governance challenges faced by Chinese family enterprises during the transition period.

3. Channel perspective: Unreasonably high growth targets set by established FMCG enterprises have already triggered severe channel inventory problems, which further exacerbates performance declines. This is a new issue worthy of in-depth research in the FMCG industry.