Lao Gan Ma Hits Record RM3.2 Billion Revenue After Replacing 600 Chili Sorting Workers With AI
The company now has 48 employees conducting final quality checks.
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Global chili crisp brand Guiyang Nanming Laoganma Food has achieved record revenue of 5.4 billion yuan (about RM3.29 billion) in 2025 after replacing 600 chili sorting employees with artificial intelligence (AI)
According to Yi Cai Global, the financial news arm one of China's largest state-owned media conglomerates, Lao Gan Ma's executive vice-president and chief quality officer Li Xin said the company implemented an AI quality inspection system across all factories last year.
The system has reduced the defect rate by 0.02%. However, its biggest advantage lies not in the meager improvement in quality, but in how quickly it can identify and remove defective chili peppers at a low cost.
Using cameras, the AI-powered system can identify defective peppers and impurities within 0.3 seconds. Airflow machines then blow them off the conveyor belt and into waste bins.
The technology is used for raw material sorting, production quality control, and supply chain scheduling, with the biggest improvements seen in production.
Once the AI system was introduced, the number of workers sorting chili peppers was reduced from 600 to just 48
Li said the remaining employees serve as the final line of defence, conducting experience-based checks to ensure quality standards are met.
Previously, workers sorted chili peppers manually, a process that was vulnerable to human error after long hours of repetitive work. The AI system has since improved the consistency and accuracy of quality inspections, he added.
Lao Gan Ma's founder, Tao Huabi.
Image via Imaginechina via AFPFounded by Tao Huabi in 1996, Lao Gan Ma grew from a small street-side shop in Guizhou into one of China's largest chili sauce brands
Its products are now sold in 160 countries and regions worldwide.
According to China Daily, the company can produce three million bottles of chili crisp a day.
In 2022, the company dismantled its livestreaming team and gradually scaled back its online marketing efforts, choosing instead to focus on traditional offline distribution channels that generate stable revenue.
The company also underwent a shakeup following customer complaints about a decline in the sauce's taste. Tao later returned to management, restoring the company's original chili suppliers and introducing an AI-powered quality inspection system on the production line.
With Lao Gan Ma's revenue reportedly rising for the third consecutive year, Tao's name has recently been trending on Chinese social media platform Weibo.
Netizens have expressed amusement that the 79-year-old founder could turn the company around with AI.
