"Huaxia Wine News" Liu Shengsong Zheng Ya
The 110th National Spring Sugar and Wine Fair has come to an end, based on the relevant industry hotspots that the Spring Sugar is concerned about, the author combines years of experience in wine industry consulting and trading, and talks about some observations, understandings and thoughts on China's liquor industry in 2024, in order to bring certain reference value to wine companies and wine merchants.
From "category competition" to "production area competition",
The concept of production area will become another wave of dividends in the liquor industry
China's liquor production has maintained positive growth between 2012 and 2016, but since then the liquor production has begun to decline seriously, and the liquor production will drop to 6.29 million kiloliters in 2023, and at the same time, the production capacity is also rapidly concentrated in the advantageous production areas, as of 2025, the estimated production capacity of Zunyi liquor is 600,000 kiloliters, Yibin 1 million kiloliters, Luzhou 2 million kiloliters, Lvliang 500,000 kiloliters, Jiangsu Suqian 350,000 kiloliters, Bozhou 200,000 kiloliters, and the six major production areas will occupy about 58% of the liquor industry capacity planning The production capacity will be further concentrated in the advantageous production areas.
In fact, as early as 2017, the concept of China's liquor production area has begun to take shape, after several years of development of production areas, the path and trend of the transition development of the liquor industry from "category" to "production area" have become clearer, and the value of industrial cluster development has become increasingly prominent.
To sum up, in 2024, China's liquor industry will move from "category competition" to "production area competition", and the concept of production area will become another wave of dividends in China's liquor industry.
Taking Shandong as an example, the concept of "Lujiu Zhixiang production area" is a very large and good IP, but it needs to be strengthened, disseminated and consolidated, and the concept of the production area should continuously improve the trust and endorsement of the "three products" (quality, brand, and category), so as to enhance its comprehensive competitive advantage.
In the future, the liquor industry is not only the competition between brands and brands, but also the competition between production areas and production areas.
The liquor industry may usher in a new round of in-depth adjustment
In 2023, on the one hand, the stock competition situation will continue to evolve, with strong concentration, strong differentiation, and strong extrusion becoming more obvious, and structural differentiation will be further intensified; on the other hand, high inventory, price inversion, and reduced consumption expectations will become the main contradictions in the liquor industry.
2023 is the trend, 2024 is the practice, the liquor industry may go through a new round of in-depth adjustment to solve the contradictions between the economy and the market, the market and supply and demand, supply and demand and production capacity.
On the whole, the trend of high-quality development of China's liquor industry in 2024 will be more obvious, and the sales proportion of head enterprises is still in a state of growth, but it must be recognized that the structural adjustment of China's liquor industry is imperative, and this reform and adjustment is bound to be crushing, therefore, 2024 and 2025 are the key to a new round of cycle take-off. Dealing with challenges is a topic that every wine company needs to focus on and study, especially regional wine companies that rely on low-end wine as the main sales volume, and should think carefully about how to go in the future.
From a structural point of view, in 2024, liquor companies will continue to diverge (in 2023, the national liquor industry will achieve a total output of 6.29 million kiloliters, a year-on-year decrease of 5.1%; complete sales revenue of 756.3 billion yuan, an increase of 9.7% year-on-year; and achieve a total profit of 232.8 billion yuan, a year-on-year increase of 7.5%), high-end liquor is expected to maintain stable growth, local liquor will continue to upgrade in the region and maintain a growth trend. The ability to protect channel profits may become the key to differentiation, and from the perspective of model, change stimulates reform, and 2024 is a key year for a new round of cycle take-off, and a new liquor business model will also emerge.
Fragrant liquor ushered in the climax of the national market layout
In 2023, the added value of Lvliang City's above-scale industries will increase by 1.8% year-on-year, up 0.8% to 0.9% from the first half of the year and the first three quarters respectively, of which the added value of the wine and beverage manufacturing industry will increase by 23.6%, accounting for 12.4% of the city's above-scale industrial added value, driving the growth rate of the city's above-scale industries by 2%. The 15 leading products "6 increased and 9 decreased", of which 281,000 kiloliters of liquor, an increase of 25.8%.
In addition, according to the "14th Five-Year Plan for Lvliang Liquor Industry", the local government strives to achieve a liquor production capacity of 600,000 tons by the end of 2025, an output of 500,000 kiloliters, and an output value of liquor and related industries exceeding 50 billion yuan, building a world-class core production area of fragrant liquor, and building a 350,000 mu organic sorghum base. According to the calculation of the output of 281,000 kiloliters in 2023, there is still nearly 220,000 kiloliters of growth space for liquor in Luliang City, and the annual growth rate must reach 45.7%.
In 2023, Fenjiu will exceed 30 billion yuan, of which the revenue of Qinghua Fenjiu series products will account for more than 48%, and Fen 20 and Fuxing have basically achieved a national layout, which is also the beginning of the practice of the national layout of fragrant liquor.
At present, the fragrance liquor continues to rise, the market continues to expand, and presents a super strong brand development echelon, such as Baofeng, Yellow Crane Tower, Fenyang Wang, Jinfenhe, etc., following the "sauce fragrance fever", in 2024, "fragrance fever" will also become a key hot word in China's liquor industry.
A large wave of "liquor price increases" is coming
On the evening of October 31, 2023, Kweichow Moutai announced that after research, it was decided to raise the ex-factory price of Kweichow Moutai (Feitian and Five Star) by 53% vol from November 1, 2023, with an average increase of about 20%.
On February 5, 2024, the ex-factory price of the eighth generation Wuliangye will increase by 50 yuan, from 969 yuan/bottle to 1019 yuan/bottle, an increase of about 5%.
Since then, the price of famous liquor has risen, Shanxi Fenjiu's Qinghua Fenjiu 20 has raised its ex-factory price since March 15, rising by 20 yuan per bottle; Langjiu Co., Ltd.'s Honghualang 10-year, Honghualang 15-year channel supply price has increased by 20 yuan and 30 yuan respectively since April 1······
In addition to controlling the price of famous wine, another important reason for the price increase of famous wine is to seize the vacant market of high-end product price increases, and impact the high-end market by increasing the ex-factory price, so as to occupy a place in advance.
At the same time, the price increase of famous wine is also a good opportunity for regional famous wines, which can take advantage of this "price increase tide" to raise prices for sub-high-end products of enterprises, so as to occupy the mature price band vacated by the national famous wine price increase, especially 300-500 yuan, and lay out and occupy a place in advance.
Destocking is still a key word in the liquor industry in 2024
In 2023, liquor inventory will become the "big stone" of the entire industry, and in 2024, destocking will still be the most talked about topic in China's liquor industry, at least in the first half of 2024.
China's liquor industry needs a transition period to solve the problems of market supply and demand, production capacity balance and market and channel saturation, and 2024 will be a key node to stabilize prices, channel revenues, Steady growth and the realization of a healthy growth model based on dynamic sales will become a priority factor for China's liquor industry in 2024, which is also one of the key matters carried out by the entire liquor industry and famous liquor companies since the beginning of the year, and it is expected that through active destocking throughout 2024, the market supply and demand balance will be slowly adjusted and gradually enter the normal range.
As a regional brand, do not blindly, do not follow, stable inventory, stable release of production capacity, stable structure, stable cash flow, large factories have the path of large factories, small factories have small factory methods, destocking is a social problem, too much worry is easy to cause a chain reaction of "dammed lake", of course, can not be completely inappropriate.
Rations wine and 100-yuan boxed wine may become new upstarts in the regional market
At present, consumers' wallets are more tightly covered, their choices are more cautious, and their choice of products is more demanding.
"Wumart" and "inexpensive" ration wine will become the first choice of Chinese consumers for daily drinking, such as Yellow Cover Glass Fen, Zhuye Qing, Lao Bai Fen Wine, Jianzhuang Wine, Xifeng Green Bottle, Moutai Welcome Wine, Shun Pin Lang, Heigai, etc. At the same time, in order to effectively release production capacity and enhance the value of fragrance, the introduction of high-quality and inexpensive ration wine is also what major wine companies are willing to do, which is both an appeal and a demand.
From the perspective of the national market, the price of famous wine has risen, and it is necessary to seize the high-end and sub-high-end market, and the regional famous wine will follow the trend to seize the price band of 300-500 yuan, and the price band of 100 yuan will inevitably be vacated for a short time, although it is only a short time, but this is a great opportunity for the regional market, especially those who have both appearance and cost-effective 100-yuan boxed wine, cost-effective is quality, appearance is brand, reasonable and effective operation, or there will be unexpected gains.
The price of 100-300 yuan with the public sauce wine may become a new opportunity growth point
A wave of "sauce flavor fever" has raised the head of the country's sauce-flavored liquor, and has basically realized the national layout of sauce-flavored liquor. However, compared with the strong fragrance type and the light fragrance type, the basic consumer group is still too small, without him, the threshold is too high, and it often starts at 500 or 600 yuan, which is also a major reason for the rapid entry into the adjustment period after the "sauce fragrance fever".
Throughout the national soy sauce wine market, 100-300 yuan is the core price band of most non-brand soy sauce wine enterprises and some brand soy sauce wine enterprises waist products, whether Moutai soy sauce wine company, Xijiu, or second-tier soy sauce wine enterprises, all have a strategic layout in this price segment, at present, the market size has exceeded 10 billion yuan, and this figure is expected to exceed 30 billion yuan in the next three years.
The popularization of soy sauce liquor depends on the sinking of the price system, creating a complete price chain as strong aroma liquor, and the current price that can be generally accepted by the public is 100-300 yuan, so the development space of soy sauce liquor in this price range in the future is very large, or it will become a new opportunity growth point.
Liquor marketing may become younger and younger, and "national style".
Looking back on 2023, "in order to let young people drink baijiu", wine companies have made frequent new moves, creating a series of high-profile and innovative cases. From liquor ice cream to sauce-flavored coffee, from liquor chocolate to cocktails, leading liquor companies such as Moutai, Wuliangye, and Yanghe have tested the waters. Among them, the "Sauce Latte" jointly launched by Kweichow Moutai and Luckin has attracted widespread attention and discussion.
"In order to let young people drink liquor", major liquor companies have broken their hearts, and expressing traditional cultural elements in liquor marketing in a more fashionable, personalized and diversified way may become an important path for liquor marketing in 2024. For example, national style music, intangible cultural heritage craft peripherals, traditional story animation, national style games, etc., are all areas where the attention of young consumer groups is rapidly increasing, adding "national style" elements, showing the cultural heritage and artistic atmosphere of liquor, or will become a new link to shorten the distance between liquor and young people.
Accelerate the transformation and upgrading of the digital and intelligent industry
It will become an important strategic direction for major liquor companies
In recent years, digital and intelligent transformation has been repeatedly mentioned by all walks of life, and the same is true of the liquor industry, Moutai, Wuliangye, Luzhou Laojiao, Yanghe, Xifeng, Xijiu and other major liquor companies have successively invested large-scale capital and technical strength in recent years to build intelligent brewing factories, and the upgrading of digital and intelligent industries is really affecting the future trend and competition pattern of the industry.
Compared with traditional production, the most prominent advantages of digital and intelligent production are to reduce costs, improve quality, increase efficiency, and vigorously promote the digitalization of production and brewing, which can make the taste and flavor of products more stable; mobile Internet technology updates and iterations to shorten the distance of information transmission; modern logistics provides convenience while reducing costs; packaging materials provide more personalized products and possibilities, and the rise of Internet celebrity economy will enrich the liquor marketing model.
The comprehensive application of digital intelligence technology will effectively improve the efficiency of the liquor industry, reduce costs, enhance experience, and comprehensively accelerate the transformation and upgrading of the industrial chain, which is also an opportunity for the liquor industry to drive innovation in the future.
For China's liquor industry, 2024 will be a new beginning, and infinite hopes and possibilities are constantly being explored and practiced, let us look forward to it together. (The authors are Liu Shengsong, General Manager of Counseling Strategic Consulting, and Zheng Ya, Project Manager of Counseling Strategic Consulting)