Sanyuan Dairy's new leader, Chen Haifeng, who took office in April this year, has delivered two quarterly reports, but the results are far from ideal.

Under his leadership, the company reported revenues of RMB 1.684 billion in Q2 and RMB 1.54 billion in Q3, both showing year-on-year declines. This led to a total revenue of RMB 4.871 billion for the first three quarters, down 11.06% from RMB 5.416 billion in the same period last year. More concerning is the erosion of its home market—this year, the number of distributors in its core region dropped sharply by 32.62% to 376.

Random visits to major supermarkets revealed that staff often described Sanyuan's milk sales as "mediocre," with many recommending competing brands like Yue Xianhuo and Missfresh instead. Consumers also criticized Sanyuan's milk for being "watery" and lacking flavor.

Additionally, Sanyuan's new "Goodnight Milk" product sparked controversy. The company vaguely responded to inquiries about its efficacy, stating that effects "vary by individual constitution."

**Home Market Erodes as Consumers Complain of "Bland" Taste** Since Chen Haifeng took over in April, Sanyuan's performance has declined in both Q2 and Q3, dragging down overall revenue. In contrast, regional rival Bright Dairy reported a minor 0.99% revenue drop, far outperforming Sanyuan.

Sanyuan, once a leader in low-temperature and pasteurized milk, is losing ground to national giants like Yili and Mengniu, which are expanding aggressively in North China. In Q1-Q3, Sanyuan's core market revenue fell 14.6% to RMB 2.28 billion, with liquid milk and ice cream sales both dropping over 14%.

Consumers noted that Sanyuan's products are now overshadowed by competitors' wider selections. Many also complained about the milk's "weak taste," with some describing it as "diluted."

**Controversy Over "Goodnight Milk"** The "Goodnight Milk," marketed as containing melatonin, raised doubts. Each 250ml bottle contains just 0.0125 micrograms—far below the 1-3mg found in typical supplements. Sanyuan's customer service could not clarify whether the melatonin was added or naturally occurring.

Industry analyst Song Liang questioned whether processing methods preserve melatonin's efficacy, casting further doubt on the product's claims.

**Distributor Network Shrinks by Over 30% Amid Management Turmoil** Sanyuan's distributor count plummeted 31.1% to 2,384, with its home region seeing a 32.62% drop. The company attributed this to "optimization," but the decline has hurt sales, with nationwide revenue falling 11.23%.

Management instability has also plagued Sanyuan. Since late 2024, key executives, including former GM Tang Hong, have resigned, leaving Chen Haifeng to navigate a challenging turnaround.

Analyst Zhu Danpeng noted that Sanyuan's struggles stem from fierce competition and a sluggish dairy market. Recovery hinges on faster innovation and stronger leadership.

For Chen, who previously worked at P&G, JD.com, and Feihe, the priority is stabilizing market share, improving products, and rebuilding distributor confidence.