"Huaxia Wine News" reporter Lu Junqi
In recent years, the liquor industry has entered a period of deep adjustment, and overcapacity and high inventory of liquor have become common problems in the industry. Looking at the domestic liquor market, competition is becoming increasingly fierce, and liquor companies as a whole are facing a new era of performance growth challenges and escalating consumer demand. In the face of the off-season of liquor sales and consumption, how to accurately summarize the past production and operation conditions and scientifically plan the future development strategy of liquor companies, especially famous liquor companies, has become the most important strategic priority of every enterprise.
The times must have a very important impact on the development of each industry and form the imprint of the times. Judging from the current development trend of the domestic liquor industry, the development of the mainland liquor industry has entered a new era, and the more significant feature of this era is that while consumers' demand for famous liquor is strengthened, it also shows a trend of consumption grading and tilting towards advantageous production areas, high-brand enterprises and high-value products.
As a famous wine enterprise, Shuijingfang has irreplaceable famous wine genes and has the first-mover advantage of famous wine production areas, which can be described as the "darling" of the famous wine consumption market in the new era, demonstrating extraordinary development potential. Through the development strategy, coping strategies and vision planning adopted by Shuijingfang in recent years, it is not difficult to see that Shuijingfang has embarked on a high-quality development path that adheres to a long-term strategy, focuses on key areas, strengthens high-end attributes, and boosts the sustainable development of the enterprise.
The high brand value of Shuijingfang famous liquor is steadily recovering
On the evening of April 26, Shuijingfang released its 2023 annual report. During the reporting period, Shuijingfang achieved operating income of 4.953 billion yuan, a year-on-year increase of 6%, a net profit of 1.269 billion yuan, a year-on-year increase of 4.36%, and a net cash flow of 1.734 billion yuan, a year-on-year increase of 31.98%. For the whole year, the company achieved year-on-year growth in revenue and profit, and completed the business goals set at the beginning of the year. In addition, the report for the first quarter of 2024 disclosed at the same time showed that Shuijingfang's operating income in the first quarter was 933 million yuan, a year-on-year increase of 9.38%, and its net profit was 186 million yuan, a year-on-year increase of 16.82%.
Judging from the main economic development performance indicators of Shuijingfang in 2023, although the year-on-year growth rate of its revenue and net profit has not reached a more glamorous double-digit rate, the net cash flow generated by operating activities has increased by 31.98% year-on-year, and it can be seen from Shuijingfang's first quarter report in 2024 that its year-on-year revenue growth rate has been nearly double-digit, and the year-on-year growth rate of net profit in the first quarter is closer to 17 percentage points! This also fully shows that the high brand value of Shuijingfang Famous Liquor is steadily rebounding, and the company's long-term development strategy is effectively promoted. Obviously, this is more strategic value and significance than a certain period of time and a certain bright business performance indicator of an enterprise.
In recent years, the liquor industry has entered a period of deep adjustment, the competition situation of squeezed stock in the liquor industry is continuing to evolve, and the pattern of industry competition is accelerating the reshaping. Among them, insufficient effective demand for alcohol, overcapacity, and high inventory are common problems in the industry. According to relevant data released by industry associations, the total output of the national liquor industry in 2023 will be 6.29 million kiloliters, a year-on-year decrease of 5.1%. At the same time, under the overall pressure of the industry, the Matthew effect of "the strong will always be strong" continues to intensify.
In this context, the liquor industry, which has entered a period of deep adjustment, has shown that the influence of the top famous liquor brands has become more prominent, while the number of liquor enterprises above designated size has continued to decrease and the industry concentration has continued to increase. At the same time, consumer demand shows a trend of consumption grading, tilting towards advantageous production areas, high-brand enterprises, and high-value products.
Actively conforming to the overall development trend of the liquor industry, Shuijingfang relies on large single products such as Zhenzhuo No. 8 to undertake the dividends of consumption stratification, and at the same time, integrates the first-mover advantage of being a famous liquor enterprise located in the famous liquor production area, meets the strong demand of consumers for famous liquor with high-quality products, and takes advantage of the trend to achieve growth.
For the leading product Shuijingfang Zhenzhuo No. 8, Shuijingfang has promoted the channel inventory of this product to become more and more healthy and benign through strategies such as grasping sales and clearing inventory. In the second half of 2023, Shuijingfang raised the price of Zhenzhuo No. 8 in a timely and moderate manner, which effectively promoted the good performance of Zhenzhuo No. 8's sales and maintained double-digit growth throughout the year. Continuously expanding the distribution network and strengthening the product penetration rate, about 9,000 new effective stores were added to Zhen Brew No. 8 throughout the year.
In this regard, Ouyang Qianli, an expert in the liquor industry and the founder of Qianli Think Tank, believes that consumers are paying more and more attention to quality and personalized experience in their choice of liquor. For consumers who pursue a high quality of life, famous wine is not only a drink, but also a manifestation of life attitude. Famous liquor companies like Shuijingfang are meeting the diverse needs of consumers through continuous product innovation and channel breakthroughs, and seizing new growth opportunities in the changing market.
Zhou Yuanxin, Chief Marketing and Digital Business Officer of Shuijingfang, pointed out that the driving force for Shuijingfang's strategic development comes from three aspects: first, the irreplaceable famous wine gene, secondly, the long history recognized by consumers, and finally the unremitting efforts in market expansion. In the future, Shuijingfang will continue to explore innovative marketing models, including strengthening and expanding the construction of various channels, providing continuous impetus for the steady development of the enterprise, and telling consumers the story and culture behind the liquor through more innovative ways.
Adhere to the long-term strategy, focus on key areas, and inject development momentum
In the face of the current Chinese liquor market in a new era of diversification and quality, as well as the increasingly fierce competition in the industry, Shuijingfang adheres to the long-term strategy and promotes the steady development of the enterprise, focusing on improving the strategic level of channel construction, continuously strengthening high-end attributes, actively meeting market demand and effectively maintaining the win-win situation of manufacturers, effectively focusing resources on the field of channel expansion, and constantly tapping the depth and breadth of channels, so as to create and promote the marketing level of enterprises to a new level.
In terms of depth, Shuijingfang has taken deep roots in core cities, stabilized its fundamentals, and expanded potential markets to find new market increments. Through multi-channel joint efforts, multi-dimensional grasp of business incremental opportunities.
Not only that, Shuijingfang firmly believes that a stable and healthy value chain is an important guarantee for safeguarding the common interests of manufacturers, and an important prerequisite for consumers to establish stable brand value. In the first quarter of 2023, the company took the initiative to reduce social inventory and stabilize the value chain, and since the second quarter, the inventory of dealers and stores has remained at a reasonable level.
Jiang Wei, general manager of Shuijingfang's core products division, emphasized the importance of adapting to the times and focusing on resources. He believes that through in-depth interaction with customers, listening to their voices, and going deep into the front line of the market, refining the market segmentation, and working side by side with dealer partners, manufacturers can face challenges together and develop a win-win situation.
In actively complying with the diversified needs of consumers, Shuijingfang has increased its investment in large single products such as Jingtai and No. 8, and at the same time, expanded its product layout in both directions. In order to meet the consumption of the circle and further broaden the coverage of the well platform series, Shuijingfang continued to promote the classic product new well platform and launched the "Shuijingfang Jingtai Yipin". At the same time, it launched the ultra-high-end product "Shuijingfang First Fang" to enrich the company's brand matrix and bring consumers more high-quality and unique liquor experience. In addition, it has launched a variety of e-commerce exclusive products such as "Small Water Well", "Water Well Banquet" and "Treasure Series (Kirin Pixiu) Gift Box" in the e-commerce channel, aiming to allow more consumers to taste more high-end and high-quality liquor in the price range of 200 to 300 yuan, and strengthen the focus on the middle and low price band.
It is worth mentioning that Shuijingfang continues to strengthen high-end attributes and make joint efforts on the channel and brand side to meet the market demand for high-quality products. The company's adherence to the high-end strategy, as well as the continuous cultivation and investment in brands and high-end flagship products, have become an important help for the company to steadily promote the implementation of long-term strategies and achieve cycle crossing.
Starting from the optimization of the sales strategy of the high-end products division, Shuijingfang focuses on core cities for business expansion and enhances the brand's awareness and reputation among the target consumer groups. At the same time, through a wealth of brand and circle activities such as aesthetic festivals and liquor workshops, as well as the construction of offline networks such as aesthetic halls and experience halls, we will promote consumer reach more extensively.
What's more worth mentioning is that Shuijingfang is committed to telling the brand story of "more than 600 years of uninterrupted brewing and inheritance" and deepening the rare quality label of "Double National Treasure". Last year, Shuijingfang cooperated with Professor Bai Fengyan and his team from the Institute of Microbiology of the Chinese Academy of Sciences to jointly carry out the second phase of scientific research on Shuijingfang's unique "No. 1 microflora", and released the latest phased research results at the Shuijingfang 25th Anniversary Conference of Scientific Archaeology in September 2023, further strengthening the quality and brand value of Shuijingfang's "living inheritance".
Make long-term investment in the future and create and promote the sustainable development of the enterprise
Great oaks from little acorns grow.. As the "first workshop of Chinese liquor", Shuijingfang not only grasps the current development, but also makes long-term investment in the future based on the long-term. Based in the Chengdu production area, the company works closely with the government, industry organizations and upstream and downstream enterprises in the industrial chain, and joins hands with all parties to deeply explore and make full use of the unique geographical, ecological, historical and cultural advantages of the Chengdu (Qionglai) production area, and actively advocates and practices the innovative and diversified development model of the whole industrial chain.
The high-level planning and construction of Shuijingfang Qionglai whole industry chain base enables Shuijingfang to realize the integration and effective operation of the whole industrial chain from raw material procurement to brewing and packaging, which provides important support for Shuijingfang to reduce costs, optimize efficiency and ensure quality. This not only ensures the quality and stability of the product supply, but also provides a solid material foundation for the company's long-term development.
At the same time, Shuijingfang continues to promote the implementation of the "Shuijingfang 2035 Sustainable Development Goals", and integrates the ESG strategy of "Shuijingfang, Respect for the Future" into the overall development strategy of the enterprise, which fully demonstrates the company's commitment to social responsibility and far-reaching consideration for future development.
It is worth mentioning that in the 2022 ESG report, Shuijingfang announced the "Shuijingfang 2035 Sustainable Development Goals", as a guide for future medium and long-term sustainable development, Shuijingfang took the lead in announcing the "ESG work KPI" in the liquor industry. Through these forward-looking strategic initiatives, Shuijingfang is gradually advancing to build a sustainable and highly praised business model, focusing on creating greater value for shareholders and society.
In the past year, Shuijingfang has not only made remarkable achievements in product innovation and brand inheritance by sticking to its long-term strategy, but also demonstrated its keen market insight and extraordinary execution in marketing strategy and market expansion. Looking forward to the future, Shuijingfang will continue to adhere to its long-term strategy, continuously optimize the product structure, strengthen brand building, expand market influence and reputation, and continue to promote the sustainable development of the enterprise and bring consumers a more excellent product experience.
Jiang Leifeng, acting general manager of Shuijingfang, said that the steady growth is the product of sticking to the long-term strategy and focusing on key areas. Growth doesn't happen in isolation, it's about the environment, partners, consumers, and stakeholders. In the future, on the basis of sticking to the long-term strategy, Shuijingfang will actively comply with market dynamics, constantly review development strategies and tactics, and sincerely look forward to creating more value with our partners and achieving win-win development!