“Encountering Nature in the Countryside and Co-creating a Beautiful Future”

“The green lotus leaves outspread as far as boundless sky; the lotus flowers reflect the sunlight in a striking red”. Located in the southern part of Fuzhou City, Jiangxi Province, at the western foothills of Wuyi Mountain, Guangchang is known as the "hometown of Chinese White Lotus”. During the peak of summer, thousands of acres of lotus fields bloom, creating a refreshing sight.

“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”

Speaking of white lotus in Guangchang, Zhang Xufeng, Deputy General Manager of the supply chain management center of CR Vanguard, said, "white lotus in Guangchang is a protected product under Chinese Geographical Indication. The pure lotus root powder produced there known for its authentic taste and nutritional value is popular among the consumers."

Founded in 2012, Fuzhou Jia Xin Zheng Food Co., Ltd., a local private enterprise in Guangchang, primarily acquires lotus seeds and lotus roots from farmers as raw materials to process primary agricultural products into lotus root powder. "Our business scope is relatively simple, similar to traditional small workshop-style operations," said Zhou Jianwu, Deputy General Manager of the company.

“In Guangchang County, 110,000 acres of white lotus have been planted, which serves as the primary income source for local farmers. The county has established a dedicated department—the County-level White Lotus Industrial Development Bureau—to oversee and promote the growth of the industry,” he added. As "Space Lotus No. 36” has been planted in Guangchang, it boasts an extended flowering and fruiting season as well as abundant lotus seedpods with an average of 17 to 18 plump and glossy seeds for each seedpod, weighing around 100 grams per 100 seedpods. On average, lotus seed yields range from 1,350 to 1,500 kilograms per hectare, with top-performing fields even reaching up to 1,800 kilograms.

In 2015, in response to the national rural revitalization strategy, CR Vanguard embarked on creating a new poverty alleviation model directed with the "Farmer-Supermarket Direct-Purchase" approach. Leveraging CR Vanguard's supply chain system, this initiative fosters a close connection between markets and farmers, facilitating a seamless transition for agricultural products from farm to table through a streamlined "green channel”.

The cooperation between CR Vanguard and "Jia Xin Zheng" began in June 2015. "CR Vanguard hopes to provide enterprises with vital support. 'Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime'—this philosophy led to a significant leap forward for our company," recalled Zhou Jianwu. 

Zhang Xufeng conducted a comprehensive analysis of the obstacles encountered by buyers and sellers. The white lotus industry in Guangchang is mostly comprised of individual enterprises that struggle with unstable and limited sales channels, leaving them vulnerable to market volatility and uncertain income. Differences in how farmers grow and set standards lead to inconsistent quality of white lotus, impeding widespread market penetration and falling short of meeting the demands of high-end markets. Moreover, the absence of brand promotion awareness and expertise among sales merchants has led to low market visibility, posing difficulties in boosting added value of products and sustaining a competitive pricing advantage. Meanwhile, consumers encountered challenges related to product quality and convenience of purchasing channels. Obtaining high-quality and authentic Guangchang white lotus offline was challenging, while verifying the authenticity of online purchases proved to be difficult, with potential damage during transportation.

 “Therefore, we have adopted the cooperation model of enterprises + bases + farmers, forming an industrial chain that shares benefits among all parties involved,” said Zhang Xufeng. By enhancing the quality and standardizing the production of specialty agricultural products, backing the establishment of agricultural support centers, and broadening the reach of rural e-commerce, this initiative has effectively strengthened the connection between farmers and markets.

"Upon signing a procurement contract with CR Vanguard at a reserved price, we gained assurance of secured income," mentioned Zhou Jianwu. It has instilled confidence in enterprises to pursue acquisitions boldly, leading to increased production scale, reduced costs, and enhanced market competitiveness.

The steady supply of Guangchang white lotus has met consumers' needs for reliable quality and traceability of provenance. Zhang Xufeng emphasized that as consumer satisfaction and loyalty increase, this not only boosts sales but also enhances profitability, gaining “multiple business advantages in single action”.

Building upon this foundation, CR Vanguard has introduced a range of self-branded products, including "Runzhijia" lotus root powder and the "Jia Xin Zheng" series of Guangchang white lotus. It has led to the establishment of a comprehensive industrial chain spanning from lotus seed cultivation to processing and lotus root powder production, expanding the diversity of local specialty items and driving the progressive advancement of specialty industries in Guangchang.

"Our lotus root powder range now offers a variety of products catering to diverse consumer preferences, such as osmanthus lotus seed and lily lotus seed. Moreover, they can add various nuts to their DIY creations," said Zhou Jianwu. The company has launched 17 kinds of products, including 6 star-flagship products, all of which have been widely embraced by consumers at CR Vanguard stores. Its annual income has also increased each year from the beginning of less than RMB20 million, with an annual gradual growth rate of 20%, and its sales reached a peak of over RMB60 million.

“CR Vanguard Revitalization Plan”

Our partnership with Guangchang County has a long history," Xu Zhijiang, Deputy General Manager of CR Vanguard, recalled that as early as 2002, the Leading Group of Poverty Alleviation and Development of the State Council had designated Guangchang County as the Group's paired poverty alleviation county, which is the Group's first paired poverty alleviation county.

Xu Zhijiang expressed that CR Vanguard, as a company deeply intertwined with people's livelihood consumption, has always upheld its mission of "leading consumption progress and creating better living together”. The company has continuously aligned its development path with the overall national strategy to serve people’s livelihood. 

Under the guidance of the national rural revitalization strategy, CR Vanguard officially unveiled the "CR Vanguard Revitalization Plan" in 2019, which involves partnership with local governments and partners to establish direct procurement bases for fresh produce in impoverished areas. The plan aims to standardize farming practices, enhance product competitiveness, optimize supply chain construction constantly, build comprehensive operational capabilities across the entire value chain, and generate additional profit opportunities for farmers. Through a new measure of “providing fund while making profit”, it seeks to achieve holistic rural revitalization.

As the project leader of the CR Vanguard Revitalization Plan, Zhang Xufeng outlined that in 2021, CR Vanguard was authorized to build the "CR Vanguard Revitalization Base” for Guangchang white lotus which accepts direct delivery from the place of origin through cold chain distribution. Since 2023, the company has shifted its focus to the products themselves, promoting a "one village, one product" strategy. By harnessing local resource strengths, a range of products highlighting distinct regional characteristics have been introduced into the market, which significantly bolstered the development of local specialty industries.

“We carried out promotional campaigns centered around the theme of ‘Encountering Nature in the Countryside and Co-creating a Beautiful Future’ to present premium specialty goods to consumers who delivered positive feedback,” said Zhang Xufeng. In 2024, CR Vanguard's self-branded business introduced 15 products from Fuzhou Jia Xin Zheng Food Co., Ltd., mainly covering lotus seeds, tea tree mushrooms, shiitake mushrooms, lotus root powder and cereals, among which three are newly introduced products, including black fungus, Jew’s Ear and Silver Fungus. In 2024, the procurement amounted to RMB7.165 million, and the sales amounted to RMB9.470 million.

As a responsible central state-owned enterprise, CR Vanguard upholds a profound commitment to its responsibilities. Xu Zhijiang emphasized, "Serving as a sales platform, CR Vanguard bridges the gap between farmers and markets. Through collaborative efforts with our partners, we engage in comprehensive retail business cooperation across various levels and domains, leading to mutually advantageous outcomes. Also, we persistently refine our supply chain and pioneer new service models to furnish consumers with more enhanced and convenient service experiences and products, thereby bolstering the foundation of livelihood security."

“Development has entered the fast track”

CR Vanguard has strict requirements regarding the quality of its self-branded products, which also forces enterprises to continuously upgrade their products, procure new equipment and introduce professionals.

Pre-packaging is essential in the production of its self-branded products. This process includes utilizing granulators to transform white lotus into granular instant lotus root powder and employing metal detectors to detect any foreign metal elements, guaranteeing the quality and safety of the food. Zhou Jianwu explained, "We have invested in new equipment to enhance the standardization of our products and align with market regulations."

The company also dispatched employees to participate in training to understand various national standards and relevant laws and regulations and learn inspection and testing techniques to ensure that all products comply with the “Product Quality Law of the People's Republic of China” and the “Food Safety Law of the People's Republic of China”. In this process, the company has gradually established a standardized management system and successfully obtained multiple certifications, including the ISO9001 quality management system certification and the ISO22000 food safety management system certification.

"In terms of resources and capabilities, our development has entered the fast track," remarked Zhou Jianwu. With the improvement of brand competitiveness, the company actively engages in the annual national private label fair in Shanghai every December to broaden its sales channels continually. To date, the company is in the process of requesting additional land from the county government to expand the factory premises and upgrade the production lines. The goal is to elevate the quality of “Runzhijia” products while extending the sales reach. Additionally, the company wishes to cultivate livestreaming and e-commerce business for its own brand “Jia Xin Zheng”.

"This company is equipped with strong learning ability. Not only do the products undergo iterative enhancements, but talent cultivation and system refinements are also in a state of constant evolution”, noted Zhang Xufeng. With the support of CR Vanguard, the company has gradually built its talent training and management system, attracting a number of well-educated, highly qualified, and highly proficient individuals in corporate management and product R&D. The establishment of a modern management, production, and R&D team in the initial stages has laid the foundation for diversified production as well as distinctive innovation development.