Image source @ Visual China
Wen 丨 entrepreneurship is at the forefront, author 丨 Rickzhang, editor 丨 egg total
Recently, a "sauce wine price increase chart" circulated in the circle of friends of wine merchants has caused heated discussion, which shows that the price increase of some sauce wine is as high as 85%, of which Moutai's sauce wine series products have risen the most, especially Moutai Welcome Wine, Zunyi 1935 and so on.
In addition to the price increase of liquor, the stock price of liquor companies has also risen. It is worth mentioning that recently listed wine companies have released three quarterly reports, and some media have made a ranking according to the data performance of these wine companies. The ranking shows that in addition to the two leaders of Moutai Wuliangye, who are far ahead, the ranking of the wine companies behind it is unusually sticky.
But unexpectedly, in the list of the top 4 liquor companies, there appeared a name that no one expected - Shunxin Agriculture.
This Shunxin agriculture is actually the parent company of Niulan Mountain Erguotou. Because it also includes pig breeding and slaughtering and other businesses, according to the financial report, this part of the income of about 2 billion yuan, in fact, shunxin agricultural liquor income can still rank in the top six.
That is to say, the income of Shunxin Agriculture's Niulan Shan Erguotou is likely to exceed that of Shanxi Fenjiu. And the revenue growth rate in the first three quarters is also very gratifying, exceeding the iron law of 10% per year in Moutai.
Although NiulanShan Erguotou is also sparing no effort to make high-end efforts, the one that accounts for 90% of the income of the entire Niulanshan Erguotou is still a light bottle of low-grade liquor with a price of no more than 20 yuan.
However, in the continuous pursuit of high-end products by liquor companies, as well as the continuous increase in prices of Maotai, Wuliangye, Langjiu, etc., a liquor company with low-end liquor as the core product can actually rank in the top six positions of the market value of listed liquor companies in the country.
That's really interesting.
<h2>1, the price of Maotai and sell crazy Niulan Mountain</h2>
For the liquor market, the price of Moutai has increased year after year, and even every quarter is a norm.
From the factory price of about 1,000 yuan to the current retail price of nearly 3,000 yuan, this is already the result of many price adjustments in Moutai, and the price increase of Moutai has also spawned an alternative market for liquor companies, that is, the auction market for hidden wine and old wine.
In addition, because Moutai is now in this way of marketing, it has also led to a wave of liquor companies constantly pursuing high-end products.
Not only is Wuliangye, which is closely following Moutai, constantly raising prices, but even the langjiu in the second-tier brands has also continued to benchmark Moutai, and its highest-end Qinghualang has risen from the retail price of 600 to 800 yuan to the price range of 1000 to 1200 yuan.
Since the beginning of 2019, all listed wine companies do not seem to show the strategy of high-end products in their financial reports, as if they cannot keep up with the entire development situation.
However, compared with Moutai, which is still in short supply with rising prices, Shunxin Agriculture's NiulanShan Erguotou sold less than 5 billion yuan in 2016, and its sales exceeded 10 billion yuan in three years alone.
"The Maotai that is constantly rising in price and the hard-to-find wine and the low-end but fast-growing Niulan Mountain are actually the best metaphors and representatives of the market pattern of China's liquor industry and the differentiation of social wealth." In response to the impact of Niulan Shan Erguotou on China's liquor industry, Zhang Xin, a senior reporter of a liquor media, told "the forefront of entrepreneurship".
In his view, under the general trend of consumption continuing to upgrade, the market occupied by Niu Er, the "king of mass liquor" of 800 million bottles a year, has become a golden price segment of liquor.
"Erguotou has been a veritable 'king of folk wine' in recent years", Zhang Xin believes that this is an area that many media do not want to pay attention to, they are watching the market expansion of high-end wine, but in fact, low-cost light bottle wine is the category that occupies the absolute market traffic.
And since its listing, the net profit margin of a number of merchants in the Niulanshan series can still be maintained at about 10%, which is higher than that of competitors at the same price.
"You don't look at the highest price of 20 to 30 yuan, but the winery can leave 25 to 30% of the profit margin for distributors for 12 bottles of Niulan Mountain per box." Zhang Xin said that he believes that the distribution of channel profits is reasonable, a number of merchants and terminals can obtain reasonable profit margins, and the price plate can remain stable for a long time, which is the reason why NiulanShan is still sitting on the top of the liquor market sales no matter how other liquor companies operate.
According to the 2019 financial report, the operating income of Shunxin Agriculture's NiulanShan liquor industry was 10.289 billion yuan, an increase of 10.91% over last year. This means that in the third quarter of 2020, the sales of Niulan Mountain have been equal to the whole of last year. From the perspective of sales, it is very likely that This year, Niulan Shan ErGuotou will achieve sales growth of more than 20%.
In Zhang Xin's view, such a growth rate means that a liquor company has become a state of "selling crazy".
<h2>2, the cheapest grain wine</h2>
In fact, Niulan Mountain is accepted by the majority of consumers, which is related to the process it uses.
Before 1980, the two-pot head technology and brand were only used by Hongxing distillery, which was a traditional craft handed down from the Ming and Qing dynasties in Beijing. In the late 1980s, in order to encourage the development of the local wine industry in Beijing, Red Star Distillery deliberately disclosed the erguotou technology and allowed its branches to develop on their own. It was at that time that Niulan Mountain began to focus on its own two-pot head products.
Niulanshan Distillery was established in 1952 on the basis of a distillery, located in Niulanshan Town, Shunyi District, Beijing, and is the only distillery in China with a standard for the implementation of fragrant geographical indications.
This means that at the marketing level, Niulan Mountain has more confidence to tell the story of the brand than Red Star. After all, Red Star is a winery that was established after the founding of the People's Republic of China, and Niulan Mountain actually has a very long history of winemaking.
Moreover, on the basis of the two-pot head technology announced by Red Star, Niulan Mountain has made many adjustments to its own historical evolution. On the one hand, it has created a precedent of secondary ticking before the brewed second pot head leaves the factory, which makes the taste of the second pot head more soft; on the other hand, it also starts the conversion attempt of the brewing base grain selected by the second pot head.
Therefore, although they are brothers who are extended from the two-pot head technology of the same family, now compare the product ingredient list, and you will find that the two brands have obvious differences in the choice of grain.
Compared with the Red Star, which has always held on to the historical tradition, Niulan Mountain has invested a lot of resources in the technology of brewing the second pot head, and has made a lot of innovations, which also makes the second pot head of the cow pen mountain and the red star two pot head present different flavors.
But it is undeniable that in the same price point, The best taste of Niulan Mountain is the most cost-effective, which is also the reason why it is best-selling nationwide.
It is also because the two manufacturers of Niulan Mountain and Red Star use the traditional two-pot head brewing technology, so that the two-pot head, which does not exceed 20 yuan of light bottle liquor, has become the cheapest grain brewing wine that the people can afford.
Moreover, Niulan Mountain mainly focuses on the low-end light bottle wine market, which is different from the consumption logic of high-end wine based on banquets, and has a strong FMCG attribute.
The consumer population is mainly low-income people, with high-frequency self-drinking as the main drinking scene, and the pricing is between 10-20 yuan. Generally speaking, if the consumer's budget is not enough, then the price can allow this part of the people to consider the liquor for the first time when choosing liquor.
"This may also be the basis for Niulanshan's continuous best-selling and rapid development", Zhang Xin believes that although in order to pursue efficiency, Niulanshan has also launched some low-end blended liquors made by solid liquid method and with edible alcohol, "but according to Niulanshan's financial report data, it can be seen that even if the liquor blended by solid liquid method, the proportion of base liquor brewed by Niulanshan itself will exceed 50%. ”
<h2>3, wine is used to drink, not to invest</h2>
"The fact that Niulan Mountain silently sells 800 million bottles a year actually tells us another truth", Jiang Yi (pseudonym), who was once a public relations service provider of a liquor company, told the "forefront of entrepreneurship" his views on the entire liquor market.
"I think that with the high-end trend of liquor proposed by Moutai, the liquor market is now more and more pursuing unit price than product." He said that nowadays, many wine companies have launched aging, and even 50 years and 100 years of wine have been put on the market, or entered the field of auction circulation.
"The distillery I used to serve is a second-tier brand, but in fact, there are old wines in the house that have been stored for decades and cannot be sold, which has been quite popular in the liquor auction market in recent years." He believes that this is actually the embodiment of the pathological development of the wine market, "whether these wines are good or not, whether there is value that can be stored, and now the entire market does not care at all, as long as there is old wine out, and the brand belongs to the first and second lines, it will definitely be sought after." ”
Turning over the news of the liquor market, people will be surprised to find that liquor auctions are an important part of it.
According to the latest news, in August, there was an auction in which 9 bottles of 53-degree Maotai were auctioned for 90,000 yuan, while the products of several second-tier liquor companies in several other auctions held in the same period, a box of 12 bottles of high-end liquor less than 10 years old, were also auctioned at a price of 30,000-50,000 yuan per box.
"Basically I've been to regular liquor auctions, and there are very few streams, and it's normal that the price is 3-5 times higher than the price of a product that is retailed separately." Jiang Yi said.
He thinks this has become a big problem in the liquor market. "Even you often see some news, some rich people proudly show you, hoarding a room of Maotai or Wuliangye."
What makes him feel very helpless is that it is precisely because the secondary market for liquor circulation has been established, so these first- and second-line liquors are so enthusiastic about high-end branding. "In fact, there are relevant ways to solve the problem of realization after investors buy wine, which makes liquor, especially high-end liquor, now become an investment target." As a winery, it controls the production process and occupies a huge interest in it. ”
Xiao Li believes that this is actually contrary to the original intention of the development of the liquor market.
"After all, wine is for drinking, not for auction. And alcohol is volatile, hiding wine at home, must not be as good as the storage environment of the distillery, coupled with a variety of other factors, the matter of storing wine will actually be less and less, is a totally uneconomical investment. Jiang Yi added.
When all brands are pursuing high-end, it also makes the liquor market gradually become impetuous. "Everyone is telling stories, they all want to tap the connotation of their own brand, put forward their own high-end theory, and thus support their own high price." However, how to enhance the value of alcohol products and how to make consumers feel better, it seems that it is not yet within the scope of consideration of these wine companies. ”
In his eyes, the current liquor market seems to be collectively caught in the fire.
<h2>4. The crisis of Bullpen Hill</h2>
When the entire market is pursuing high-end, it still adheres to the low-priced and high-quality products of Niulan Mountain, even if it sold 800 million bottles last year, this year is estimated to exceed one billion bottle sales, still encountered its biggest crisis.
Because it has always been selling light bottle liquor at a low price and high quality, the profit margin of NiulanShan Distillery has not been able to rise, and because it needs to deal with various market emergencies, it has declined in the past two years.
From the perspective of gross profit margin alone, the gross profit margin of the parent company Shunxin Agriculture is far lower than the average level of the liquor industry, and if compared with the leading Guizhou Moutai, its gross profit margin is only a quarter of that of Guizhou Moutai.
According to the financial report data, from 2017 to 2019, the sales volume of Niulanshan liquor of Shunxin Agriculture was 429,000 kiloliters, 621,000 kiloliters, and 718,000 kiloliters, an increase of 28.75%, 44.66% and 15.56% respectively. The corresponding liquor business revenue was 6.451 billion yuan, 9.278 billion yuan and 10.289 billion yuan respectively, with a growth rate of 24.0%, 43.8% and 10.9% respectively.
The growth rate is remarkable, and the problem lies in the gross profit margin of the liquor business. From 2017 to the first half of 2020, the data was 54.86%, 49.63%, 48.08% and 38.89% respectively, and since 2020, the decline in gross profit margin has intensified significantly.
And what is more fatal is that because the second pot of Niulan Mountain is a low-priced liquor, it is very difficult to increase the price, which means that the gross profit margin of Shunxin Agriculture will be difficult to significantly improve.
In addition, the challenges faced by Shunxin agriculture are becoming increasingly severe. Under the background of high-end liquor companies have laid out low-priced liquor, the market of Niulan Mountain Erguotou has been further compressed.
Therefore, it is an indisputable fact that the capital chain of Shunxin Agriculture has been quite tight in recent years.
According to the financial report, in the first half of 2020, the net cash flow generated by Shunxin agricultural operating activities was about -729 million yuan, down 344.40% year-on-year; the net increase in cash and cash equivalents was -882 million yuan, down 273.63% year-on-year.
At the end of the first half of 2020, the asset-liability ratio of Shunxin Agriculture was 60.3%, unchanged from the past three years, but compared with the industry average of about 30%, it was too high.
At the beginning of July, Shunxin Agriculture had just announced its intention to issue 1 billion yuan of medium-term notes. The issuance period shall not exceed 3 years, and the funds raised shall be used to repay or replace bank loans and supplement working capital.
Shortly after the announcement, Shunxin Agriculture returned an undeveloped piece of land to the Wenchang Municipal People's Government, and according to the agreement signed by the two sides, Shunxin Agriculture received 42.9 million yuan in compensation.
Clear-eyed people can see that Shunxin Agriculture sells land, issues bonds, and thinks of various ways to realize it, because it is indeed very "short of money." However, due to the backing of the Shunyi District State-owned Assets Supervision and Administration Commission, so the financing channels and means are relatively rich, Shunxin Agriculture does not have to worry about the problem of broken capital chain for the time being.
On the one hand, Niulanshan Erguotou maintains the status of "sales crown" in the liquor market, leaving a lot of imagination space for the entire market, on the other hand, the parent company's operation has a tight capital and a downward trend in sales profits, which casts a shadow on the next development prospects of Niulanshan Erguotou.
But in any case, as long as the balance between product prices, profits and capital is solved, there is still great hope for long-term and stable development, which has been accepted by the majority of consumers.
After all, this is the "rations and wine" of the people, and the "Niu Er" with this label means that the Niulan Shan Er Pot Head has long become a part of the lives of many consumers.