Core Viewpoint - The founder of Lao Gan Ma, Tao Huabi, has returned to the forefront of the company to address declining sales and quality concerns, leading to a recovery in revenue after a challenging period [1][20]. Company Background - Lao Gan Ma was founded by Tao Huabi in 1996, initially starting as a small food stall before evolving into a well-known brand recognized both nationally and internationally [3][6]. - The brand has become synonymous with Chinese chili sauce, achieving significant sales and brand recognition globally [3][4]. Recent Developments - Recent discussions on social media have raised concerns about changes in the flavor and ingredients of Lao Gan Ma products, prompting the company to deny any alterations to its original recipe [1][4]. - The company reported a revenue of 53.91 billion yuan for 2024, marking three consecutive years of growth, attributed to Tao Huabi's return to active management [1][20]. Management and Leadership - Tao Huabi, who has been a pivotal figure in the company, initially stepped back from daily operations in 2014 but returned in 2019 to address operational challenges and restore product quality [3][19]. - The company operates under a family business model, with Tao Huabi transferring shares to her sons, who now manage different aspects of the business [15][19]. Challenges and Market Position - Lao Gan Ma has faced various challenges, including rising raw material costs and increased competition from emerging brands, which have pressured its market position [18][21]. - Despite these challenges, the company has chosen to focus on its core product line without diversifying into new markets or extensive marketing campaigns [20][21]. Future Outlook - The company is at a crossroads, needing to balance maintaining its traditional values while adapting to modern market demands and consumer preferences [21][22]. - Tao Huabi's commitment to the brand remains strong, emphasizing the importance of perseverance and dedication to the company's success [22].

Core Insights - The article highlights the resurgence of Lao Gan Ma, a leading Chinese chili sauce brand, which has recently returned to high revenue levels, reflecting a struggle between nostalgic taste memories and current business realities [1][7]. Company Background - Lao Gan Ma was founded in 1989 by Tao Huabi, who initially opened a small restaurant in Guiyang, where her homemade chili sauce gained popularity, leading her to pivot to chili sauce production [2]. - The brand is characterized by its low-key marketing approach and a focus on maintaining product quality, with a strong presence in both domestic and international markets [2][10]. Recent Performance - Lao Gan Ma's sales reached 5.391 billion yuan in 2024, nearing its peak sales of 5.403 billion yuan in 2020, indicating a recovery in performance [7]. - The company has adopted a more refined distribution strategy by dividing provinces into smaller regions for better market penetration, supported by strong cash flow and an efficient distributor network [4]. Challenges and Changes - The brand faced significant challenges after Tao Huabi's retirement in 2014, leading to a decline in product quality and sales due to changes in management and sourcing practices [8][9]. - The shift to lower-cost chili peppers and mechanized production methods led to consumer complaints about the loss of the original flavor, resulting in a decline in revenue from 2016 to 2018 [9]. Recovery and Future Outlook - After Tao Huabi's return in 2019, the company reinstated its original recipe and halted diversions from its core business, which contributed to its recent sales recovery [9][10]. - The brand's long-term success relies on establishing a sustainable management system that does not depend solely on its founder, while balancing innovation with traditional values [10][11].