Forbes: What is the sales outlook for Wahaha this year?

Zong Qinghou: Last year sales were about 43 billion RMB ($6.3 billion). We want to increase that by 10 billion [RMB] this year. In the next three years, we want to reach 100 billion RMB. The market is vast--1.3 billion people--and there are good prospects in many segments. What kind of new products is Wahaha bringing into the market this year?

This year, we’re introducing a lot of new juice products. In the past, we didn’t make an earnest push. We are working to understand the tastes of people born in the 1980s and 1990s--it is very different from my generation. We do our own research. Marketing research companies, I think, are relatively academic. I spend about half of my time outside of the office talking to people. It used to be two-thirds, but we’re a larger business now and I spend more time here.

Forbes: What new products are you working on for the next few years?

Zong Qinghou: Looking ahead, the living standard of ordinary people in China is rising. But many people find themselves with illness as they become successful: higher blood pressure, and diabetes. So today, people are paying attention more and more to their health. In the future, we should meet the wishes of consumers to have beverages that are good for their health. We are also broadly looking at IT-related investments.

Forbes: What kind of health beverages are promising?

Zong Qinghou: Our approach is to think about health needs and develop beverages that address those, such as those that lower blood pressure. We are working with different research institutes, including Zhejiang University.

Forbes: Are there comparable products overseas?

Zong Qinghou: Not yet. Overseas, these would be pharmaceutical products, and sales of those are restricted in China. But many come from raw materials that are actually food and can be used in beverages in ways that follow our restrictions here.

Forbes: You won’t enter the drug business?

Zong Qinghou: No.

Forbes: And you’re thinking that these will become mainstream products for you?

Zong Qinghou: That is the future direction.

Forbes: When will these new products start come to market?

Zong Qinghou: In one or two years.

Larger food and beverage companies in China are diversifying. Want Want, for instance, has been strong in snacks but is making a big push in juice, for instance. How will Wahaha address that?

We’re not afraid of competition. To meet competition, however, you have to continuously innovate.

Forbes: The end of your disagreement with Danone ends a lot of legal uncertainties. Do you have any plan to take Wahaha public?

Zong Qinghou: No. We have ample cash. We don’t need the money.

Forbes: Wahaha is closely associated with you personally. Do you have a plan for a successor?

Zong Qinghou: I haven’t clearly identified one. But I have been building up our management system. In China, you have to have a strong leader for a business to get anything done. I think eventually, the successor will be someone who can get things done.

Source: www.forbes.com