The joint cross-border boom set off by Moutai continues to spread in the liquor industry.
On September 19th, Furui Gongjiu (000596. SZ) and Baxi Ice Cream launched a fragrant original ice cream, adding another fire to the cross-border co-branding boom of liquor.
Under the continuous "involvement" of the liquor market, whether and how to transform is a common problem faced by many liquor companies. And to promote the rejuvenation of the brand in a joint way, can it really eliminate the "mid-life crisis" of baijiu?
Furui Gongjiu launches strong ice cream
Or have missed the peak consumption season
On September 19th, Furui Gongjiu held the "10th Autumn Brewing Ceremony of Gujing Gongjiu Vintage Original Puree", at which Furui Gongjiu and Baxi Ice Cream jointly launched fragrant original ice cream (hereinafter referred to as Furui Gongjiu ice cream).
According to the information, Gujing Gongjiu ice cream is made with raw milk and rare cream as the core ingredients, paired with the fragrant liquor "Gu 20". According to the Gujing Gongjiu Tmall flagship store, the 500ml "Gu 20" at 52 degrees costs 680 yuan / bottle, and the 500ml "Gu 20" at 42 degrees costs 650 yuan / bottle.
The ingredients show that the raw milk content of Gujing Gongjiu ice cream is ≥55%, and 1≥.4% Gujing Gongjiu (fragrant type) is added to each cup, and the alcohol content of the product is <0.8%.
It is reported that Gujing Gongjiu has not disclosed information such as the distribution channel and selling price of Gujing Gongjiu ice cream.
When will Gujing Gongjiu ice cream be publicly offered and what is the strategic significance of the joint crossover for Gujing Gongjiu? In this regard, the reporter of Dahe Finance Cube sent an interview letter to Gujing Gongjiu, but as of press time, no reply was received from the company.
It is worth noting that as the temperature decreases and ice cream gradually enters the off-season, can Gujing Gongjiu launch co-branded ice cream at this time, which can trigger market heat and improve the company's brand awareness?
Yang Yonghua, chief expert of Guanfeng Consulting, who has long paid attention to the domestic liquor industry, told Dahe Caifang reporter that ice cream is a seasonal consumer product, which has passed the consumption season, and is less related to the mainstream consumer group of liquor.
According to public information, Gujing Gongjiu is China's eight famous wine enterprises, formerly known as Gongxing Trough Fang, which originated in the tenth year of Zhengde in the Ming Dynasty (1515 AD), and was listed on the Shenzhen Stock Exchange in 1996, focusing on the "vintage puree" series of wines.
In 2023, Gujing Gongjiu's revenue in the first half of the year exceeded 10 billion yuan for the first time, ranking sixth in the operating income of listed liquor enterprises. Financial data show that in the first half of 2023, Gujing Gongjiu achieved operating income of 11.31 billion yuan, a year-on-year increase of 25.64%; The net profit was 2.779 billion yuan, a year-on-year increase of 44.85%.
Behind the boom in cross-border co-branding
The liquor industry fell into a downturn
The cross-border of wine companies is not new.
It is understood that in recent years, Wuliangye, Luzhou Laojiao, Shuijingfang, Yanghe Wine and other well-known wine companies have tried to launch cross-border joint or independent cultural and creative products, and most of their joint products choose ice cream, the overall investment is not large, the influence is not high.
However, the addition of "Baijiu Brother" Kweichow Moutai has made the cross-border joint name of baijiu form the focus of public opinion on the whole network.
In 2022, Kweichow Moutai and Mengniu launched ice cream products, unlike other wine companies that regard cross-border co-branding as brand promotion activities, Kweichow Moutai bluntly said that Moutai ice cream will be elevated to the strategic level of promoting the company's brand rejuvenation.
Ding Xiongjun, chairman of Kweichow Moutai, publicly said that Moutai ice cream is a strategic product of the company, which is an important starting point for cultivating the aromatic taste of Moutai sauce for young consumers and promoting the youthfulness and fashion of the Moutai brand.
When enterprises adjust their business strategies, they often face major changes in the business environment.
Financial data show that in the first half of this year, the total revenue of 20 A-share liquor listed companies was 214.023 billion yuan, a year-on-year increase of 16.62%. The total net profit was 85.953 billion yuan, a year-on-year increase of 18.79%.
Among them, Kweichow Moutai, Wuliangye, Yanghe Co., Ltd., Shanxi Fenjiu, Luzhou Laojiao and Gujing Gongjiu 6 liquor enterprises have a total operating income of 181.87 billion yuan, accounting for 84.98% of the total revenue of listed liquor enterprises. The total net profit of these six enterprises was 79.756 billion yuan, accounting for 92.79% of the total net profit.
Through the 2023 half-year report, a number of liquor companies also said that the overall scale growth rate of the mainland liquor market has slowed down and has entered the era of stock competition. The differentiation of liquor brands is becoming more and more obvious, and the market share continues to be concentrated in leading enterprises such as Moutai, Wuliangye, Fenjiu, and Luzhou Laojiao, and the "Matthew effect" in the industry is obvious.
From the scale of liquor production, it can also confirm the overall decline of the industry. The National Bureau of Statistics disclosed that from January to August 2023, the output of liquor (65 degrees, commodity volume) of liquor enterprises above designated size in China reached 2.618 million kiloliters, down 13.2% year-on-year.
Under the background of the liquor industry entering a new round of adjustment period, the stock competition pattern between the head enterprises of liquor will become more and more intense. Under this circumstance, transformation has become a common problem facing the liquor industry.
Song Xiangqing, deputy dean of the Institute of Government Management and director of the Industrial Economics Research Center of Beijing Normal University, said that as the people pay more attention to health, the market demand for liquor may shrink day by day. Whether it is transforming from brand youth or launching low-end products, it means that Kweichow Moutai has a sense of crisis in strategic prediction, and seeks industrial transformation in advance to cope with the future industry decline.
Brand rejuvenation transformation is a double-edged sword
A low market evaluation will dilute the brand's reputation
Roland Berger's survey data shows that the post-80s and post-90s generation only account for 26% of the entire liquor consumption market, and high-end liquor accounts for a lower proportion of consumption among young people. It can be seen that baijiu may be being "abandoned" by young people, and traditional baijiu collectively fell into a "mid-life crisis".
The launch of sauce coffee by Kweichow Moutai and Luckin is another important move for Kweichow Moutai to get rid of the "mid-life crisis" after the joint ice cream, with the excellent results of sales of more than 100 million yuan on the first day, Kweichow Moutai has taken a deeper step towards the brand rejuvenation transformation strategy.
However, from the perspective of industry competition, the better the effect of the young transformation of Kweichow Moutai brand, the greater the pressure transmitted to second- and third-tier liquor companies.
Second- and third-tier liquor enterprises themselves have low brand awareness among young people, and with the deepening of the transformation of Kweichow Moutai brand rejuvenation, the attention of second- and third-tier liquor enterprises in young people will passively decline. Under this circumstance, do second- and third-tier liquor companies also need to follow up on the transformation of brand rejuvenation?
Yang Yonghua believes that whether an enterprise implements brand rejuvenation transformation needs to be considered in many aspects. Kweichow Moutai can shorten the distance with young consumers through FMCG, but whether the sales scale of high-end liquor brings too much impetus still needs to be tested by the market. At the same time, its sense of luxury in the minds of young consumers will also decline simultaneously.
"The strategic transformation of Kweichow Moutai is a manifestation of the intensification of competition in the liquor industry, and for second- and third-tier liquor companies, they are also facing the choice of how to transform." Yang Yonghua said that some liquor companies will follow the trend and adopt imitation or expansion of wine + category models, but only light asset co-branding, there is no certain accumulation in this field, and it is difficult to cultivate success. In addition, there will be another part of liquor enterprises to adopt cross-industry transformation, such as expanding tourism, hotels, upstream agriculture, etc.
Song Xiangqing believes that most liquor companies do not follow the transformation of brand youth, and young people buy co-branded products more out of the novelty of mixing and matching, if the product market evaluation is not high, it will dilute the brand reputation of liquor enterprises. If the product market evaluation is high, it will deepen the brand awareness in the young consumer group, but the direct improvement of liquor sales is limited.
Responsible editor: Liu Anqi | Reviewer: Li Jinyu | Reviewed: Li Zhen | Supervisor: Wan Junwei