Post-Hsu Fu Chi Acquisiton, Nestle Addresses New Supply Chain Challenges in China

Global food company continues to strengthen capabilities to meet market demand

Shanghai, ChinaSept. 27, 2012—Global food company Nestle announced that their sales in China are expected to increase 20 percent in 2012 and that it will keep double-digit growth in 2013. After it paid 1.7 billion dollars to buy China’s food brand Hsu Fu Chi, it has already become the No.1 candy factory in China. Listed in Gartner’s Supply Chain Top 25 for 2012, Nestle continues to strengthen its supply chain capability in China.

“One of our opportunities is to improve our distribution to the third- and fourth-line cities, towns and villages,” confirmed Tobie Gordon, Vice President of Supply Chain for Nestle's Food and Beverage division's greater China region. “As for channels, we are better at reaching modern trade and we want to improve our presence with traditional trade.”

Tobie also added that their distribution network is one of the presenting challenges in supply chain, which is critical to assuring their ability to reach the consumers in all the different DCs.

This means they have to keep right quantities of products in each of DCs with the products fresh and to make sure the products stay fresh and moves through those DCs rapidly, when the working capital or logistics costs are not blown up, according to Muhammad Zahid, Senior Vice President of Corporate Supply Chain, Great China.

Muhammad, who has 24 years of working experience with Nestle, has been in China since January 2012, following the Hsu Fu Chi acquisition. At this year’s Consumer Goods Supply Chain Officer Summit 2012, to be held November 28-29 in Shanghai, China, he will lead audience members to rethink “The Importance of SC within the Entire Value Chains.”

In China’s local market, Yihaodian has grown rapidly and built up an amazing supply chain network in a short time. As the largest business to consumer (B2C) online supermarket in China, it won the title of “the most popular mall” and “the most popular food & beverage mall of the year” for the “2011-2012 second China top retail network selection list” award this year in Beijing.

As a fast growing company, Yihaodian successfully overcame many large supply chain difficulties in a short time including:

  • How to manage the supply chain complexity with a huge amount of categories
  • How to design and execute a supply chain network to meet different and a large amount of collaboration
  • How to build up a flexible supply chain to meet the changing online consumer behavior
  • How to optimize their end-to-end supply chains?


Jonathan Wang, Director of Supply Chain at Yihaodian, led a brilliant team and created many successful stories in this industry. He developed their own system of logistics, which divide China into two million sections, even more specific than the postcode does. At Consumer Goods Supply Chain Officer Summit 2012, he will present and analyze their successful transformation and challenges in the future.

The Consumer Goods Supply Chain Officer Summit 2012, held by GlobalSCM Group, is under the conference theme of “What is the key to rethink supply chain configuration in the volatile market, today and in the future?” Keynote speakers will share their insights on various topics including best supply chain practices, industry’s challenges and future trends and innovate new winning supply chain and logistics strategies.

Conference attendees will include industrial influential figures from Estee Lauder; Coca-Cola; Hershey; Diageo; Johnson & Johnson; Perfetti Van Melle; Mars; Yum!; Starbucks; Wal-Mart; L'Oreal; Energizer; Hanesbrands; Gucci; Wrigley; LG; Electrolux; Moen; Ferrero; Abbott; Sony; Staples; McDonald's; and more.

For more conference details, visit