In the past year, liquor companies have reached new heights.
The shadow of price inversion looms over the liquor industry, and dynamic sales have become the main work throughout the year. Shrinking production is a common trend. According to the National Bureau of Statistics, the output of liquor by enterprises above the designated size in mainland China will drop to 4.492 million kiloliters in 2023 from 6,712,400 kiloliters in 2022. The liquor industry has obviously entered the stage of stock game.
Young people who have never shown too much interest in liquor have become a knot in the hearts of liquor companies seeking growth.
Whether in terms of marketing or channels, liquor companies are riveting their efforts to get closer to young people. In terms of channels, first-tier liquor companies have successively developed and optimized direct sales channels, and in terms of marketing, co-branding and cross-border have become means for liquor companies to attract young people. Taking Moutai as an example, in September last year, the sauce-flavored latte co-branded with Luckin swept the social circle. However, not all cross-border and co-branded actions are accepted by consumers, and some cross-border co-branded actions of liquor have not made much splash.
In the past five years, there have been more than 20 cross-border and co-branded products of liquor companies
In September last year, a joint brand between Moutai and Luckin set off a wave of "craze" in the social circle of young people. According to public data, the sales volume of Moutai and Luckin's co-branded product "Sauce Latte" exceeded 5.42 million cups on the first day of listing, and the sales of single products exceeded 100 million yuan on the first day.
Moutai Luckin co-branded product sauce latte (source: company's official Weibo account)
In the Mid-Autumn Festival in October after the explosion of "Sauce Latte", Moutai, Luzhou Laojiao, and Shuijingfang liquor companies also took advantage of the opportunity to launch Mid-Autumn Festival moon cake gift boxes.
Shuijingfang and ice cream brand Häagen-Dazs jointly launched the "High-end Aromatic Heartfelt Ice Cream" moon cake gift box, with a price of 498 yuan, the box contains 7 ice cream mooncakes, including milk, strawberry and macadamia nuts three flavors, and Shuijingfang Jingtai 38 degrees strong aroma liquor is added inside. Luzhou Laojiao and Guangming Cold Drink, a subsidiary of Bright Dairy, jointly launched the "Wine Flavor Moon Cake Ice Cream", each box contains six moon cakes, of which the wine flavor tangerine peel red bean ice cream contains strong flavor liquor.
Luzhou Laojiao Guangming Cold Drink Co-branded Mooncakes (source: official Weibo account of the company)
In fact, the cross-border co-branding of liquor is not the first of its kind in Moutai. Consumer Reports found that in recent years, more than 10 wine companies have cooperated with brands in different fields to launch more than 20 co-branded products. Moutai, Wuliangye, Luzhou Laojiao, Fenjiu, Xifeng Liquor and other enterprises have launched joint products.
Joint cross-border case of some liquor companies / "Towards the New - 2024 China Liquor Consumption Observation Report"
Although the product naming copywriting and packaging design launched are varied, the actual products are homogeneous. "Baijiu + Liquor Chocolate", "Liquor + Ice Cream", "Liquor + Moon Cake" and "Liquor + Tea and Coffee" are common combinations in the co-branding of liquor companies.
There are so many co-branded liquors that even the hearts of the chocolates can be distinguished from different flavor types, and there are related co-branded products such as sauce aroma, strong fragrance, phoenix fragrance, and light fragrance liquor.
In 2020, Xifeng Liquor and Sister Ma jointly launched the "Guomai Fengxiang Pure Fat Wine Heart Chocolate". In 2021, Niulanshan and Sister Ma jointly launched wine heart chocolate, and Yanghe also co-branded "Dream Blue M6+" wine heart chocolate with the well-known wine heart chocolate brand Edunburg in the same year. In 2022, Fenjiu also co-branded with Attenburg to launch the "Blue and White 30 Fenjiu Baijiu Liquor Heart Chocolate".
Qinghua Fenjiu 30 Baijiu Liquor Heart Chocolate (source: company's official Weibo account)
In addition to co-branding with other industry brands, some wine companies have also spontaneously launched cross-border products. Liquor brands, including Yanghe, Luzhou Laojiao and Li Du, have crossed over to the beauty field and launched distiller's lees mask products. In December 2023, Luzhou Laojiao played the "beauty card" and officially announced the launch of a series of Chinese wine meal beauty products, including three categories: facial mask, shower gel and shampoo.
Do young consumers pay for the co-branding?
The popularity "myth" created by "Sauce Latte" is inseparable from the contrast between the brand's tonality.
Feitian Moutai, which can only be seen in high-end business bureaus for middle-aged people on weekdays, has appeared in affordable coffee shops that are often haunted by young people born in the 90s and 00s. With an expense of less than 20 yuan, it can not only taste the taste of Feitian Moutai, but also earn enough emotional value.
Cinda Securities analyzed the joint event and said that the success of wine + coffee is a combination of brand power, contrast and high-value attributes. Combining the low unit price of Luckin and the high spiritual attributes of Moutai, the Sauce Latte product reconstructs the public's cognition, so that the product has a cost-effective label and high emotional value function, thereby improving its popularity.
Before Moutai, a number of liquor brands had launched co-branded products, but none of them made much splash. On March 7, "Consumer Reports" searched for Luzhou Laojiao's co-branded product distiller's lees sobering and repairing mask on the Jingdong platform, and the relevant product page showed "500+ sold", and the sales volume stayed in the triple digits.
Although the co-branding is good, as soon as there are more similar co-branded products, consumers have lost their freshness. Even if Moutai is co-branded again, it will not be able to reproduce the co-branding myth of "Sauce Latte".
In January 2024, Moutai and Luckin will launch the second joint "Sauce Chocolate", which will integrate sauce-flavored liquor with chocolate drinks. However, on the day of its launch, there was no news that the product was sold out in Luckin stores, and it did not cause large-scale discussions on major social platforms.
Liquor analyst Cai Xuefei said that Moutai's co-branded products such as soy sauce latte can quickly get out of the circle and become popular because of the high social attention of the Moutai brand itself, as well as the topic conflict effect between Moutai and consumer goods such as coffee and chocolate, which has triggered a large number of consumer onlookers.
Behind the cross-border, channel reform through the market cycle
With the growth of age, the post-90s and post-00s have gradually become the main group in the consumer market. For a long time, baijiu has always been associated with labels such as "wine table culture" and "spicy taste" in the eyes of young people. To a certain extent, the co-branding broke the "dimensional wall" between the liquor brand and young people, showed the personality and vivid side of the liquor brand, and played a role in modifying the brand image of the liquor.
However, although the joint name is good, it is too much. Excessive co-branding will not only make consumers lose their freshness, but also consume the value of the brand itself. Cai Xuefei believes that cross-border and co-branding have higher requirements for the value and operation of the main brand, if the cross-border product research and development is improper, or over-developed, then the cross-border will dilute the value of the main brand, and the cross-border of untimely categories will confuse consumers' minds and affect the brand image.
Co-branding is only a small incision to reach young consumers, and short-term marketing is not enough to cultivate young people's long-term habit of consuming liquor. In addition to brand renewal, some leading wine companies are also catering to young people in terms of channels.
In recent years, liquor companies that have been focusing on traditional distribution channels have successively developed direct sales channels, and self-built channels have gradually become the standard for liquor companies. The direct sales channel usually refers to the manufacturer selling products directly to consumers. In March 2022, the launch of Moutai's digital marketing platform "i Moutai" provides a reference system for online direct sales in the liquor industry. According to data, on the first day of the trial operation of "i Moutai", more than 2.29 million people participated in the subscription within one hour.
Fidelity has always been a pain point in the online transformation of liquor. "i Moutai" is trying to break this barrier. At present, consumers can obtain the purchase qualification of some products through lottery on the "i Moutai" APP, or purchase products that do not need to be drawn by lottery. The actual products are picked up by consumers at Moutai's offline sales stores. Obtaining purchase qualifications through lottery also avoids the impact of online sales on the scarcity of product value.
In fact, including Moutai, various liquor companies are strengthening the construction of direct sales channels in combination with their own conditions. According to Consumer Reports' combing of the financial report data of some listed wine companies, the direct sales revenue of many wine companies has increased significantly. In the first half of 2023, Kweichow Moutai achieved direct sales revenue of 31.420 billion yuan, a year-on-year increase of 49.98%, and the proportion of direct sales revenue in main business income increased from 36.4% in the first half of 2022 to 45.2%. Wuliangye achieved direct sales revenue of 17.582 billion yuan, a year-on-year increase of 11.09%, and the proportion of direct sales revenue in main business income increased from 41.1% in the first half of 2022 to 42.0%.
The direct sales income of Yanghe shares, Gujing Gongjiu, Zhenjiu Lidu and other enterprises is also growing rapidly. Taking Gujing Gongjiu as an example, the direct sales revenue increased from 280 million yuan in the first half of 2022 to 344 million yuan in the first half of 2023.
Regarding the focus of work in 2024, many liquor companies have released signals to focus on the construction of terminals.
At the Moutai 2024 Annual Market Work Conference, Ding Xiongjun, Secretary of the Party Committee and Chairman of Moutai Group, proposed that from product is king, channel is king to brand is king, today's market has entered the era of terminal king. In 2024, we will adhere to the four ends of "products, channels, brands, and terminals". At the Wuliangye Distributor Conference on December 18, 2023, Wuliangye also revealed to the outside world that brand image improvement, share improvement, market expansion, quality and efficiency improvement, and profit improvement will be the key tasks of Wuliangye in 2024.
How to balance the brand and channel level and establish a closed loop of young people's consumption of liquor will be a topic that liquor companies need to continue to explore in the future. We will also continue to pay attention to the measures of liquor companies in rejuvenating in 2024.