Is it spiraling upwards or swooping downwards? By the middle of 2024, China's liquor industry will usher in a drastic change unseen in a decade.
On the market side, the stock price and terminal price of liquor both fluctuated downward, and the market entered a period of adjustment.
On the government side, from the concept of liquor producing areas ten years ago, to the seven major liquor producing areas in China, such as Yibin, Zunyi, Luzhou and Suqian, have all put forward the goal of 100 billion yuan, China's liquor producing areas have realized the transformation from scratch and from existing to strong, and the doubling of 100 billion or 100 billion yuan has become the strategic standard of production areas.
Planning of 100 billion liquor production areas.
The seemingly contradictory fall and rise reflect that the liquor industry is on the "eve" of deep adjustment. In 2023, the national liquor industry will achieve revenue of 756.3 billion yuan, an increase of less than 200 billion yuan from 582.6 billion yuan ten years ago.
01
From scratch:
In the past ten years, the production area has reshaped the pattern of China's liquor industry
"China's liquor producing areas, after ten years of incubation and construction, have been completely comparable to the world's top liquor producing areas such as Bordeaux in France and Scotland in the United Kingdom." On June 25, Ma Duwei, president of the Asia-Pacific region of the European Famous Chamber of Commerce, who was invited to Zunyi, Guizhou and Yibin, Sichuan, made no secret of his optimism about the situation of China's liquor market and his affirmation of the construction of China's liquor production areas.
The "appellation concept" originated in Maduwi's native Europe. In 2013, China's liquor entered a "period of deep adjustment", and the industry once fell to the freezing point, showing a situation of both volume and price falling, even Sichuan, as the largest province of liquor in China, has experienced sluggish growth and stagnation in operating income for three consecutive years. In 2015, after fully drawing on the experience of building the world's top wine producing areas such as Bordeaux wine producing areas in France, Sichuan took the lead in proposing the concept of liquor producing areas in the country, and regarded it as the first way for Sichuan liquor to break through the "deep adjustment period".
As a result, the four major Sichuan liquor producing areas represented by Yibin, Luzhou, Chengdu and Deyang "collectively debuted" at that time, and became the main engine driving the high-quality development of the Sichuan liquor industry.
In 2016, Sichuan Liquor's revenue took the lead in getting out of the downturn, breaking through the 200 billion yuan mark for the first time, accounting for 35% of the country's total. In 2017, Yibin, the largest production area of Sichuan liquor, surpassed 100 billion yuan in revenue for the first time, becoming the first liquor production area in mainland China to exceed 100 billion yuan, which is far ahead of the industry in terms of growth and increment.
Soon, the experience of building Sichuan wine production areas formed a trend of prairie fire in the country. At the end of 2017, the China Liquor Industry Association selected the "Top Ten Spirits Producing Areas in the World" based on multiple dimensions such as output, output value, quality, standards, culture, and brand. Among them, six Chinese liquor producing areas were selected, namely Yibin in Sichuan, Luzhou in Sichuan, Zunyi in Guizhou, Suqian in Jiangsu, Bozhou in Anhui and Luliang in Shanxi, building a clear outline of China's liquor production areas.
The brand effect of the production area is gradually highlighted. The reporter's investigation found that the main liquor producing areas in China, represented by Yibin, Luzhou and Zunyi, have achieved growth far exceeding the industry average in the past ten years. According to the data, the revenue of China's main liquor producing areas has increased from about 50% to 70% of the country's liquor, an increase of about 20 percentage points. In particular, Sichuan, which has the largest number of liquor producing areas, has achieved a jump in revenue from accounting for one-third of the country to promoting the national liquor.
"The production area is the most mainstream expression of Chinese liquor in the past decade, which has reshaped the development pattern of China's liquor industry." At the 2024 Sichuan International Wine Expo held recently, Song Shuyu, chairman of the China Liquor Industry Association, said that the trend of China's liquor from dispersion to concentration is obvious.
02
From small to large:
Within three years, the revenue of China's liquor producing areas will reach trillions of yuan
300 billion yuan - this is the latest "ceiling" of revenue in China's liquor producing areas. A month ago, at the Sichuan Provincial Liquor Industry High-quality Development Promotion Conference held in Chengdu, Xue Qing, member of the Standing Committee of the Yibin Municipal Party Committee and executive vice mayor, disclosed for the first time that the Yibin production area will focus on building a world-class high-quality liquor industry cluster and move towards the goal of achieving 300 billion yuan in revenue in the city's entire liquor industry chain in 2027. Zunyi City, which echoes it, has locked the development goal of "the city's liquor output value will exceed 300 billion yuan in 2027" at the beginning of this year. This also means that in the next three years, these two top liquor producing areas will have to achieve 100 billion growth to achieve the goal.
100 billion yuan - this is the minimum advanced threshold for China's liquor producing areas. At the just-concluded 2024 Sichuan International Wine Expo, Deyang production area put forward the goal of cultivating a world-renowned 100 billion liquor industry cluster. This is the seventh major liquor producing area in mainland China that aims at 100 billion yuan. Prior to this, the six major liquor producing areas of the world's top ten spirits producing areas have put forward a development goal of 100 billion yuan. The "leaders" Yibin and Zunyi have put forward a growth target of 100 billion yuan, and even Suqian in Jiangsu, Bozhou in Anhui Province and Luliang in Shanxi Province with relatively weak industrial bases have also competed to draw a blueprint for 100 billion yuan in revenue.
Between 300 billion yuan and 100 billion yuan, there is an industrial gradient of 200 billion yuan, which is the goal pursued by Luzhou, a liquor producing area. Luzhou, which has been among the 100 billion club in 2020, proposed at the Sichuan Provincial Liquor Industry High-quality Development Promotion Conference held in May this year that it will strive to exceed 200 billion yuan in revenue by 2027. He Hongbo, deputy secretary of the Luzhou Municipal Party Committee, said in an interview with a reporter from Chuanguan News that he would make efforts to sprint from the four directions of "building a high-quality raw grain production base for Chinese liquor, a world-class liquor production area with strong sauce and excellent liquor, a world-class liquor industrial park and a world-famous liquor cultural resort".
The resulting domino effect is taking place. Above the production area, the target of the main liquor-producing provinces is constantly moving upward. For example, Sichuan Province proposed that by 2027, the total operating income of the liquor industry will exceed 500 billion yuan and the total profit will exceed 120 billion yuan. Guizhou Province plans to build a 300 billion-level sauce-flavored liquor industry cluster by 2027. Following the revenue of 2019 to exceed 100 billion yuan, the revenue of Wuliangye Group and Moutai Group is expected to cross the 200 billion yuan mark next year, and Luzhou Laojiao, Yanghe, Fenjiu, etc. have put forward the strategic goal of exceeding 100 billion yuan in revenue.
"'100 billion' has become a high-frequency word in China's liquor, and the frequent appearance of hot words such as 100 billion growth, 100 billion production areas, 100 billion industries, and 100 billion liquor enterprises means that the development of Chinese liquor is overheated?" On June 25, in an interview with reporters, Li Houqiang, deputy director of the Sichuan Provincial Party Committee and Provincial Government Decision-making Advisory Committee and chairman of the Chengdu Federation of Social Sciences, raised such a question.
03
Can and can't:
How can the 800 billion yuan liquor market support the trillion ambition?
The ideal is that if the development goals of the seven major producing areas of Chinese liquor are simply added together, then by 2027, China's liquor will easily enter the trillion industry club and make greater contributions to stabilizing the macroeconomic market.
The reality is that the revenue of the national liquor industry was only 756.3 billion yuan last year, and the average annual growth rate of liquor revenue in the past ten years was less than 4%, and even if this increase is calculated in the next three years, the total market volume of China's liquor will only be more than 800 billion yuan by 2027.
The question is, how many 100-billion-level production areas can be accommodated with a market capacity of more than 800 billion yuan? How to support the "trillion ambitions" of Chinese liquor? Where to make up for the market gap of hundreds of billions of yuan between planning and reality?
Looking at history, liquor has long entered the era of stock competition. It is not difficult to see from the data that in the past decade, the rapid development of China's main liquor producing areas is not based on broadening industrial boundaries and increasing the market cake, but mainly the result of the stock game. In other words, the revenue growth of the main liquor producing areas is based on the shrinking revenue of other non-main producing areas, and the expansion of market increment is relatively limited. For example, the scale of Shandong's liquor industry has shrunk by more than half in the past few years. Liu Feng, a liquor marketing expert, believes that in the case of the decreasing consumer population base and liquor production, the expansion of the liquor market cake mainly relies on "the increase in unit prices".
"Product prices are closely related to industrial capacity, especially in the case of a decrease in the total number of people drinking alcohol, only by increasing the per capita product price can we maintain and enhance industrial capacity, and the decline in Moutai's terminal price will not only not expand the market cake, but also make the market cake smaller, and may even lead the industry into a deflationary cycle." Qiao Yang, a researcher at Sun Yat-sen University, believes that the current development of the liquor industry is facing the superposition of pressure from many factors such as the macro economy to the consumer market and then to industrial adjustment, and the uncertainty and instability of the development environment and the significant changes in the industry competition pattern are unprecedented. ”
Looking at the future, internationalization can support the "trillion ambition" of Chinese liquor. Under the stock competition in the domestic liquor market, internationalization is the key to expanding aggregate demand and tapping new increments. "In 2023, China's liquor exports will account for only 0.9% of the total revenue from liquor sales. According to data released by a number of market research companies, the global distilled spirits market size exceeds 3 trillion yuan. This means that there is still more than 2.3 trillion yuan in the international market is still in a 'blank area'. Ma Duwei, president of the Asia-Pacific region of the European Famous Chamber of Commerce, spread out a super-large version of the world map and said to reporters, "Sichuan has innovated and launched low-alcohol wine, sparkling wine, panda wine, fruit wine, etc. in recent years, and the response in these places is good, but unfortunately the promotion efforts are far from enough, and I am willing to be a promoter of Chinese liquor to the European market." ”
In addition, promoting the casting chain, poly chain, extended chain and strong chain in liquor producing areas is also an important path for high-level breakthroughs in 100 billion production areas. Yang Jirui, Secretary of the Party Committee of Chengdu University of Foreign Chinese and Vice Chairman of the Sichuan China Liquor Golden Triangle Association, believes that the market mechanism of survival of the fittest and the Matthew effect of production differentiation will definitely present an unbalanced development pattern of "a few happy and a few worried" in the 100 billion liquor producing areas. ”
Above 100 billion, hundreds of boats compete for the stream. Who is the trillion-dollar "tide maker" in China's liquor producing areas? We'll see.
(Source: Chuanguan Zhou Wei)