You've probably thought about adding a spoonful of the "National Goddess" Lao Gan Ma to your instant noodles during a late-night snack. This classic condiment is like air in the culinary world—unnoticeable when present, but sorely missed when absent.
Founded in 1996 and originating from Guizhou, the national brand Lao Gan Ma has accompanied "seasoned eaters" for nearly three decades. Today, it is reclaiming its glory.
The recently released "2025 Guizhou Top 100 Enterprises" list reveals that after a steep revenue decline in 2021, Lao Gan Ma has staged a steady "bottoming-out rebound" over three years. Its 2024 revenue approached 5.4 billion yuan, nearly matching its historic peak of 5.403 billion yuan achieved in 2020.
Furthermore, the "2020-2025 China Chili Sauce Industry Market Outlook and Investment Opportunity Research Report" indicates that Lao Gan Ma has long held approximately one-fifth of China's chili sauce market share, firmly ranking first. The combined market share of the second and third-ranked brands is only roughly equivalent to that of Lao Gan Ma.
However, Lao Gan Ma's return to peak performance was not easily achieved. Founder Tao Huabi is nearly 80 years old and still frequently appears on the production front lines. Meanwhile, compared to competitors like Hu Bang, Fan Ye, and Chuan Wazi, who aggressively promote themselves across various platforms to maintain sales, Lao Gan Ma has deliberately chosen to "withdraw from the internet" and "lie flat," significantly reducing its marketing efforts.
So why has Lao Gan Ma remained resilient for nearly 30 years, and why can't the almost 80-year-old Tao Huabi retire and enjoy a peaceful life? The answer lies in a pivotal corporate succession event.
In 2014, the "National Goddess" Tao Huabi, after a lifetime of hard work, gradually stepped back from frontline management, handing over the "chili sauce empire" to the next generation. By then, Lao Gan Ma was already an industry leader, with products available in over 90% of supermarkets nationwide, becoming a staple on countless family dining tables.
Lao Gan Ma was passed to her two sons. Their roles were clearly defined: the elder son, Li Guishan, was responsible for sales, while the younger son, Li Miaoxing, oversaw production. However, a decision by the successors plunged the brand, which had been popular for over two decades, into difficulty.
New leaders often seek to make their mark. "Cost reduction" became their first major initiative, as the younger generation management partially replaced Guizhou chili peppers with lower-cost peppers from Henan province.
The result was that while many might not articulate the specific differences between Guizhou and Henan peppers, their taste buds registered the change immediately when mixed into rice: Lao Gan Ma just didn't taste as good anymore.
If a food product ceases to be delicious, it loses its most fundamental competitive edge.
Although Lao Gan Ma has a diverse product line, the core of its flavor has always been two ingredients: chili peppers and fermented black beans. Among these, Guizhou chili peppers, particularly those from Zunyi, are the very "soul" of Lao Gan Ma's distinctive taste.
The high quality of Guizhou peppers is not accidental but a result of geographical inevitability. This mountainous region, with an average altitude of about 1,100 meters, features interlacing hills and valleys that form natural barriers, making it difficult for pests and diseases to spread. Its golden latitude, combined with suitable temperature, sunlight, and water conditions, creates an ideal foundation for chili pepper growth.
The climate, characterized by limited sunshine and high humidity, facilitates mineral absorption. High forest coverage supports an environment rich in negative oxygen ions. The features of warm winters, cool summers, and significant diurnal temperature variations further allow flavor compounds to accumulate fully. This ecological combination creates the scarcity of Guizhou peppers as a premium raw material, naturally commanding a higher price than peppers from ordinary growing regions. The foundation for a superior chili sauce was determined the moment these peppers took root in this land.
Tao Huabi's early market insight was equally crucial: relying solely on a "spicy" label would eventually lead to homogenized competition.
She深入研究ed regional spicy flavor differences, discovering that Hunan's chopped chili emphasizes an oil-free fresh spiciness, while Guizhou's oil-chili process holds subtle ingenuity. The oiliness moderates the intense heat, evoking a richer, more universally appealing aroma.
This precise grasp of taste allowed oil-chili to transcend the regional limitations of flavors like sour-spicy or numbing-spicy. It retains the essential chili flavor without being excessively hot, catering to palates across northern and southern China.
Therefore, the essence of this crisis was far more complex than simply "changing peppers"; it represented a deviation in the second-generation management's operational philosophy. They attempted to pursue short-term profits through supply chain adjustments but inadvertently undermined Lao Gan Ma's core moat: the consistent flavor maintained steadfastly for decades.
After the "pepper substitution controversy" became public, Lao Gan Ma faced a reputation crisis, and its financial data showed an inflection point. Starting in 2016, Lao Gan Ma's revenue began a year-on-year decline, dropping from 4.5 billion yuan to 4.3 billion yuan in 2018, with growth stagnating. Concurrently, an increasing number of players entered the chili sauce industry, and Lao Gan Ma showed subtle signs of being replaceable.
In 2019, the 72-year-old Tao Huabi returned to the frontline, becoming the "stabilizing pillar" for Lao Gan Ma.
She did not implement complex strategic adjustments but went straight to the core issue: suspending the use of Henan peppers and fully reinstating high-quality Guizhou pepper ingredients, even at the cost of increased expenses.
According to prior Xinhua reports, Tao Huabi maintains extremely strict quality standards. Once, a batch of products had a minor flavor deviation; the responsible personnel were severely criticized, and approximately 500 tons of products, valued at over a million yuan, were completely destroyed.
Some employees felt it was a pity, believing "ordinary consumers wouldn't even taste the difference; destruction is such a waste." Tao Huabi's response was simple yet firm: "The product is my own creation. Making food requires integrity; one must have a clear conscience."
This seemingly simple decision represented a complete return to fundamental operational principles: abandoning the excessive pursuit of short-term profits and refocusing on the essence of the product.
This "gustatory redemption" laid the most crucial foundation for Lao Gan Ma's subsequent revenue rebound—consumers never wanted a cheaper chili sauce; they wanted "that familiar, original taste."
"The story of Lao Gan Ma is a victory for 'conservatism.'"
"A woman who lost her husband early, raising two sons alone through hardship, was already immensely challenging. Yet, this woman not only put her children through school but also founded an enterprise and built a globally renowned brand." The preface to "The Biography of Tao Huabi" writes.
Someone seemingly born with a fierce, spicy determination in their blood is destined to experience the highs and lows of fate.
In 1997, Guiyang Nanming Lao Gan Ma Flavor Food Co., Ltd. was formally established. Its starting point was merely a small flavor food shop and a factory with just 40 employees. The success of this enterprise resulted from the combination of the era's tides and the founder's unique characteristics.
During the 1990s, the "migrant worker wave" swept across China. Migrant workers from Sichuan and Guizhou were a significant part of this mobile population. Their persistent demand for spicy flavors naturally provided Lao Gan Ma with a vast foundational consumer base.
The diffusion of tastes brought by population mobility allowed this savory spiciness to break through regional barriers, gradually gaining acceptance even among northerners who originally disliked spicy food. At the core of all this was the hard power of simply "tasting good."
Less known is that this leading domestic chili product company was once helmed by a rural woman with no formal education.
Tao Huabi lacked financial knowledge and social connections but built the brand's foundation through resilience, hard work, and genuine interpersonal principles. She carved an "alternative" path: no loans, no IPO, no advertising, no external debt. Relying on unique management systems and pricing strategies, she kept the company's cash flow consistently robust.
Lao Gan Ma's approach is often described by market commentators as "conservative," but Tao Huabi demonstrated with facts that there is no fixed template for corporate success.
This rural woman, in the most "unadorned" way, deciphered the laws of the market and human psychology, completing the transformation from street peddler to industry giant.
Some also call Lao Gan Ma the "Coca-Cola of China." While not entirely precise, the comparison holds some directional similarity. If Coca-Cola is the "evergreen tree" of the beverage world, Lao Gan Ma can be considered the "living fossil" of the condiment sector. Both have captured the taste memories of generations through consistent flavor.
In the clamorous business environment of "innovate or die," one could argue that both have, to some extent, won the market through "conservatism." Here, "conservatism" does not mean stubbornness but rather safeguarding the core, refusing blind internal friction, and perfecting simplicity.
Comparing these two seemingly unrelated companies reveals a strikingly consistent operational philosophy; both are practitioners of "anti-involution."
First, dominate the market with a superstar product. Lao Gan Ma's Flavor Fermented Black Bean Oil Chili contributes the vast majority of its revenue and is the absolute core of brand identity; Coca-Cola's classic original flavor is the cornerstone of its global recognition. Both focus intensely on perfecting their core product, occupying user minds through extreme concentration.
Second, treat "consistency" as the lifeline. Lao Gan Ma spares no cost to revert to Guizhou peppers solely to ensure decades of unchanging taste; Coca-Cola guards its secret formula, enforcing uniform standards globally, guaranteeing the flavor is identical whether consumed in New York or a local corner store. You choose them not for being spectacular, but because you know "choosing it will never be wrong."
Third, penetrate channels down to the "capillaries." Leveraging strong cash flow and an efficient distributor network, Lao Gan Ma places its products in the most remote grocery stores, school canteens, and construction site shops across China. Coca-Cola achieves "ubiquity" through its vast bottling plant system and logistics network. Both understand that the product must be within reach the moment a consumer feels the need.
Fourth, build formidable price barriers. Lao Gan Ma prices its main products in the 8-15 yuan range, becoming the industry's "price anchor." This means low-cost brands struggle with meager profits if they try to undercut it, while premium brands find it hard to gain mass consumer acceptance if priced higher. Coca-Cola leverages extreme economies of scale to drive down costs, making it difficult for competitors to challenge on price.
A product from Guizhou becomes a global "hard currency."
Being conservative doesn't mean avoiding expansion; it means expansion must be based on "extending core competencies." Lao Gan Ma and Coca-Cola follow different paths in market expansion but have both found methods to extend their boundaries that suit them.
The core difference lies in the fact that Coca-Cola is an active "global culture shaper," using advertising to associate itself with emotions like "happiness" and "sharing," becoming a global cultural symbol. Lao Gan Ma is a passive "bearer of national memory," almost entirely avoiding proactive brand advertising, relying on word-of-mouth and natural channel penetration to become a representative of "unpretentious domestic goods."
Their strategies for facing challenges from new brands also differ. Coca-Cola extends categories around its core brand while acquiring potential challengers, using capital to neutralize threats and enrich its product portfolio.
Lao Gan Ma's innovation remains limited to expansions around chili sauce flavors, now offering 14 varieties. It relies on extreme cost control and the 8-15 yuan main price range to build an "iron curtain," making it difficult for new brands to either turn a profit or achieve scale.
Furthermore, Lao Gan Ma has consistently resisted the temptation of short-term trends.
In recent years, when live-streaming e-commerce boomed, Lao Gan Ma experimented but quickly realized its incompatibility—condiments have low unit prices, and purchasing decisions rely on long-term taste habits rather than impulse buys, resulting in a poor ROI for online traffic investment. Consequently, Lao Gan Ma decisively scaled back online marketing resources, refocusing on optimizing offline channels and the product itself.
The price increase in 2022 better illustrates its "conservative wisdom." Under pressure from rising raw material costs, Lao Gan Ma raised prices for only some products by 5%-15%. Crucially, this was implemented on the foundation of restored flavor and improved quality, ultimately gaining market acceptance.
While online traffic costs soar and countless internet-famous brands fade away because they can't afford the traffic, Lao Gan Ma's offline network is being woven denser and deeper.
In short, Lao Gan Ma's "conservatism" essentially grasps the core of business: in a rapidly changing era, safeguarding the immutable fundamentals is more important than chasing every trend.
Arguably, Lao Gan Ma's most successful boundary expansion has been into overseas markets. Rumors even suggest it has become a "hard currency" in American prisons.
Currently, its products are sold in over 160 countries and regions worldwide. Its overseas revenue growth rate consistently outpaces the domestic industry average, with a year-on-year increase of approximately 30% in 2023, becoming a key support for its performance rebound.
Lao Gan Ma's overseas expansion involves no complex global marketing; it relies on the "most rudimentary hard power."
First is its reputation, particularly the word-of-mouth spread as the "ultimate rice companion" among overseas student communities.
Second is its high cost-performance. Products priced at 8-10 yuan domestically sell for about 3-5 USD in Europe and America, remaining competitive for local consumers.
Its English name is simply "LGM." This export model is entirely consistent with its conservative core. It hasn't altered its classic flavor to cater to overseas markets; instead, it has turned the "familiar original taste" into a "novel experience" abroad. The most authentic is often the most universal.
Therefore, while Lao Gan Ma's expansion pace isn't rapid, it is steady and sure, never straying from its core advantages. Data shows that from 2022 to 2024, Lao Gan Ma's performance continued to recover, with 2024 revenue nearing 5.4 billion yuan, almost equal to the historic peak set in 2020.
Of course, Lao Gan Ma faces real challenges: the succession issue remains the greatest uncertainty—the 2015 crisis served as a warning. Whether the second-generation management can balance market-oriented reforms with traditional adherence will directly impact the company's future.
Ultimately, Lao Gan Ma's success and recovery hinge on preserving one of humanity's most fundamental emotions: habit.
For many Chinese consumers, the reliance on Lao Gan Ma might not stem from it being a gourmet delicacy, but rather from it becoming a reliable punctuation mark in the background noise of daily life. Its comeback is a gentle protest of "habit" against "chaotic change."
Therefore, there's no need to place Lao Gan Ma's story on a pedestal. Perhaps its greatest revelation is that, regardless of how the times change, one must first perfect and stabilize the chili sauce in hand before considering anything else.
As for the future? Who knows.
One thing is for sure: today's Lao Gan Ma still uses Guizhou peppers.
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