Lao Gan Ma, “The Disappeared Employee”

Recently, “Laoganma used AI to reduce the number of pepper picking workers from 600 to 48” became a hot search topic.

The starting point of the story is actually a praise meeting. At the 2026 Guizhou Provincial Quality Development Conference, Li Xin, executive vice president of Laoganma Company, revealed that through four years of quality consolidation and system optimization, Laoganma’s revenue will reach 5.4 billion yuan in 2025, a record peak; after the AI ​​visual quality inspection system at the Changming base was fully online, the product defect rate dropped significantly.

The speech itself did not mention “layoffs.” However, a month later, after repeated reports in the self-media, “AI cuts 600 people to 48 people” became a headline on the screen.

In response, a staff member from Laoganma’s official hotline said, “Relevant rumors about AI layoffs are false information. The company has never released such information. Consumers are asked to treat it rationally.”

The rumors may be false, but public sentiment has been ignited. Amid the clamor of “If you lay off workers, we will take you off the shelves”, third-party data shows that the daily sales of an e-commerce platform called Laoganma dropped from 5,000 to 10,000 yuan before the rumors, to a range of 1,000 to 5,000 yuan.

Amid the hustle and bustle, where have Lao Gan Ma’s jobs gone?

Picture/picture insect creativity

AI’s fault?

Let’s first explain the technology itself clearly.

It is reported that the AI ​​visual quality inspection system launched by Laoganma covers raw material sorting, production quality control, and supply chain scheduling. The most effective one is the production link.

In the workshop at the Changming base in Guiyang, a camera scans the conveyor belt every 0.3 seconds, and a spotted pepper will be blown into the waste bin by the airflow within 0.3 seconds.

According to Li Xin, after the implementation of the above-mentioned new system, the defective rate of products in Laoganma’s key processes dropped to 0.02%.

The AI ​​visual quality inspection system used by Laoganma is actually not a magical black technology. Many food companies have already used it.

Taking Yili as an example, in the liquid milk production base, any minor flaws such as crooked straws and blurred packaging writing cannot escape AI detection. Once an unqualified product is found, the system will automatically kick out the production line and synchronize a “bright red line” warning to remind the staff to deal with it.

This is similar to the logic of Lao Gan Ma’s use of AI quality inspection. In essence, machine vision is used to replace the human eye to complete parts of the work with high repeatability and low error tolerance, turning “experience judgment” into a reusable “digital standard.”

Chili sauce is a sauce-like condiment made from fresh chili peppers or dried chili peppers as the main raw material and processed through specific processes such as fermentation or non-fermentation. The spiciness, water content, color and fiber of each batch of peppers are different. It relies on the naked eyes of experienced masters to select. Repeated operations for a long time will inevitably lead to fatigue, missed inspections, and standards will drift.

For food companies like Laoganma, flavor stability is more important than deliciousness. After all, deliciousness is subjective, and stability is the prerequisite for repurchase.

Ten years ago, Lao Gan Ma suffered a big loss due to instability.

In 2014, founder Tao Huabi stepped down and let his two sons run the company. Later, the media revealed that Laoganma had partially replaced the local Guizhou peppers with lower-priced Henan peppers, resulting in a change in flavor.

This public opinion crisis of “exchanging Henan peppers” caused Laoganma to pay a heavy price, with revenue falling from 4.549 billion yuan in 2016 to 4.389 billion yuan in 2018.

After Tao Huabi returned, she destroyed the inventory and resumed using Guizhou pepper in an attempt to rebuild consumer trust. The AI ​​visual quality inspection system and digital traceability further strengthen the public’s trust in the taste of Lao Gan Ma.

Therefore, there is nothing wrong with Lao Gan Ma’s use of the AI ​​system, and it is even in line with national policy advocacy.

In June 2025, seven departments including the Ministry of Industry and Information Technology jointly issued the “Implementation Plan for Digital Transformation of the Food Industry”, clearly encouraging food companies to use artificial intelligence for smart detection, smart monitoring and full-link traceability.

The core of the controversy is the dazzling set of figures.

The Tianyancha App shows that the number of insured persons in Guiyang Nanming Laoganma Flavor Food Co., Ltd. has dropped from 2,912 in 2022 to 740 in 2025, a decrease of 2,172 in three years, a decrease of approximately 74.6%.

It should be pointed out that this is the standard for formal employees of a single operating entity who directly pay social security. It does not include employees of outsourcing, labor dispatch, seasonal workers, subsidiaries and cooperative production entities, and cannot be directly equated to changes in pepper picking positions.

It needs to be admitted that AI will indeed make some jobs disappear, such as sorting, filling, handling, basic quality inspection and other repetitive labor positions.

But AI will also create new jobs, such as intelligent manufacturing operation and maintenance, data annotation, flavor modeling, consumption insights, content operations, supply chain algorithms, private domain growth, etc.

For companies, what they need is not “fewer people” but “another kind of people.”

But this transformation takes time and requires a prerequisite: the cake must be made bigger first. Only when companies use efficiency dividends to develop new categories or scenarios and the business volume increases, new positions will appear in batches.

Taking Haitian Soy Sauce as an example, after using advanced technologies such as AI electronic nose, visual inspection and large fermentation models, operating income and the number of employees have increased simultaneously: revenue in 2025 will exceed 26.9 billion yuan, a year-on-year increase of 9.53%, and will increase by another 6.01% in the first half of 2026. During the same period, the total number of employees has increased from 9160 to 9294, with more than 100 people listed in R&D and digital intelligence school recruitment.

So, where is Lao Ganma’s new position?

誤區

In the initial stage of this round of public opinion, the outside world’s impression of Lao Ganma was that she made a lot of money through AI. The hot search at that time was “79-year-old Lao Ganma Tao Huabi made 5.4 billion a year using AI.”

However, two misunderstandings need to be pointed out here:

1. RMB 5.4 billion is revenue, not profit. The existing public data cannot calculate how much cost AI has saved, let alone “earning 5.4 billion.”

2. The so-called “peak” is actually just the absolute value that equals what I was 7 years ago. In 2020, stimulated by the demand for home stockings, Laoganma’s revenue reached a record high of 5.403 billion yuan.

But spreading out the results of the old moms in recent years is a different picture.

According to the “Top 100 Guizhou Enterprises in 2025” list, Laoganma’s revenue in 2022, 2023, and 2024 will be 5.26 billion yuan, 5.381 billion yuan, and 5.391 billion yuan respectively, with an average annual compound growth rate of only 1.2%.

In fact, the revenue in 2025 is only about 9 million yuan more than in 2024, and the growth rate not only dropped to 0.17%, but even underperformed the industry market.

Zhiyan Consulting data shows that China’s chili sauce market size will be 48.41 billion yuan in 2025, a year-on-year increase of 3.3%.

What’s more important is market share.

According to Zhiyan Consulting data, my country’s hot sauce market size will be approximately 40 billion yuan in 2020. Calculated based on Laoganma’s revenue of 5.403 billion yuan that year, the market share is 13.5%. However, by 2025, this number has dropped to 11.2%, a shrinkage of 2.3 percentage points.

Obviously, Lao Ganma is swimming against the current.

This is not difficult to understand.

From a product perspective, Laoganma’s top three best-selling items are still flavored tempeh, chicken oil chili, and oil chili, which are indeed classic enough.

But the problem is that the trend of consumption has obviously shifted towards health and scene-oriented: Hubang hot sauce relies on small packages to seize the takeout market, and its revenue in the first 10 months of 2025 has exceeded 600 million yuan, a year-on-year increase of nearly 40%; Sichuan Wazi relies on a roasted pepper sauce to open up the fresh pepper flavor, with a single product contribution of more than 300 million yuan.

These new consumer hot sauce brands are not competing for Lao Gan Ma’s original market, but “incremental scenarios” – takeout, light meals, fitness, fresh chops, and regional flavors.

On the channel side, Laoganma took the initiative to withdraw from the network and stay away from the position of young people.

The last tweet on Laoganma’s WeChat public account was in March 2022, while Weibo showed “no content yet” and Douyin has not had live broadcasts for a long time.

The impact of product aging and withdrawal may not be apparent for a while, but as young people come into contact with hot sauce entrances for the first time, such as takeout snack bars, live broadcast rooms, and Sam’s shelves are occupied by new brands, how long Laoganma’s “childhood taste” and “childhood classic” consumer mentality can be maintained remains a question mark.

At the 2026 Guizhou Provincial Quality Development Conference, Li Xin emphasized “Don’t chase fancy models and don’t engage in impetuous marketing.” This sentence is correct in itself, but to a certain extent it also exposes a kind of binary opposition thinking-either be as busy as before, or be “fancy and impetuous”. Isn’t there a middle way to choose?

Not really.

Advanced technologies such as AI can never only reduce costs and increase efficiency. The research and development side uses data to find taste gaps, the market side uses tools to listen to consumers’ voices, and the channel side uses algorithms to match different scenarios. These things not only do not conflict with “making every bottle of hot sauce with care”, but are the starting point for putting “carefulness” into practice.

Lao Ganma must not narrow the road by herself.

Reporter: Yu Yuan