Text: Xiangshan Finance
In the past half a month, A-shares have gotten rid of the ridicule of shareholders and become the love of shareholders. As a high-quality asset of A-shares, liquor will naturally rise.
The A-share market is rising, the liquor stock price is rising, but the price change of the terminal is very interesting.
Due to the main contradiction between high inventory and price inversion of wine companies, most wine companies have been reducing prices and promoting them recently. Interestingly, Moutai and Shuijingfang showed differences, and the price of their liquor increased one after another before and after the National Day.
According to today's wine price on September 30, the price of the original box of Feitian in 2024 will be 2,390 yuan/bottle, an increase of 10 yuan/bottle, and the price of bulk bottles will be 2,295 yuan/bottle, an increase of 5 yuan/bottle. Recently, Shuijingfang also said that it will increase the price of Shuijingfang Zhenjiu series (52 degrees/500ml) by 10 yuan/bottle, and it will be implemented on National Day.
At this stage of the market, why do Moutai and Shuijingfang increase their prices? The logic behind it is worth pondering.
The difference in terminal price differentiation lies in the landing of high-end
Moutai's price increase is actually very easy to understand, as a "liquor brother", the strength does not allow its own price to be low-key, according to the practice of previous years, Moutai will be promoted at the price before the double festival, this year is quite special, and the price will be reduced one after another before the Mid-Autumn Festival.
The reason why Moutai was able to achieve both volume and price rise was essentially due to the fact that its own brand value was hard enough and the premium was high enough. Moutai dominates the high-end market, and there is no rival comparable to it, firmly grasping the dominance of the high-end liquor market, even if Wuliangye follows closely, but he is only a supplement to the high-end liquor market, and cannot replace Moutai.
In other words, Moutai is limited by its own cellar production capacity, and it is difficult to eat the whole piece of fat in the high-end liquor market, and Wuliangye can make up for the vacancy in this regard.
In a word: the core logic of price increases for wine companies lies either in their unique value or in the rise in volume and price brought about by the high-end brand.
The price increase of Shuijingfang is essentially the same, although it is not as unique as Moutai, but it also has a unique brand influence.
Let's talk about his brand effect first, any high-end liquor brand is inseparable from its long history, such as Luzhou Laojiao, whose history can be traced back to the Qin and Han dynasties, and its national treasure pool Laojiao group, which was founded in 1573 AD, is still applicable today, which also provides a historical echo for its super single product Guojiao 1573 fame.
Similarly, Shuijingfang also has a long history and cultural accumulation.
With a history dating back to the Yuan Dynasty, Shuijingfang is known as the "No. 1 Baijiu Workshop in China", and its traditional brewing techniques have been incorporated into the Intangible Cultural Heritage.
The unique historical and cultural inheritance value is the most valuable asset of Shuijingfang's high-end. Now the price increase of Zhenzhuo No. 8 series is, in a sense, also to release this part of the value, which is in line with Shuijingfang's long-term development strategy and further stabilizes the foundation of high-end.
The success of high-end can be reflected in the financial side.
According to the data, Shuijingfang will achieve operating income of 1.719 billion yuan in the first half of 2024, of which high-end liquor will achieve revenue of 1.517 billion yuan, accounting for almost 90% of the total revenue. In terms of profit, according to the financial report for the first half of the year, the attributable net profit was 242 million yuan, an increase of 19.55% year-on-year.
Among them, Zhenzhuo No. 8, as a representative brand of its high-end series, has played a key role in revenue and profit growth.
On the one hand, the price increase is in line with the company's overall high-end development strategy, and on the other hand, it is also a signal to continue to expand the high-end market through this high-quality single product. Shuijingfang also said that it will continue to fill the Zhenzhuo No. 8 series.
Zhenjiu No. 8 series is positioned at 300-400 yuan, and the competition for liquor at this price is more fierce. Outside the province, there are Fenjiu blue and white series, Yanghe Dream Blue series, and Gujing Gongjiu with 16 years of original puree...... At present, Zhenzhuo 8 is still very capable in this market.
One example is that the performance of Zhenzhuo No. 8 terminal has actually been good in terms of dynamic sales.
One of the reasons is that compared with the ultra-high-end Moutai, most of the high-end liquor sold by Shuijingfang's terminal is "drunk".
According to the "2024 China Liquor Interim Research Report", in the first half of this year, the sales of 300-500 yuan liquor, 100-300 yuan liquor and liquor below 100 yuan in the liquor market were better.
From the perspective of consumption, according to the actual situation of the Mid-Autumn Festival and National Day, liquor consumption is more rational, and 300-500 liquor can not only be used as social currency to send relatives and friends, but the price itself is acceptable for most middle classes, and it can be used as a banquet to entertain guests without losing face.
Good sales means less pressure on inventory, and it also means that there is more room for high-end development.
For the current liquor companies, it is particularly important to actively cultivate the consumer mentality of 300-500 liquor brands. In the long run, this will not only help to improve the competitiveness of the brand, but also drive the volume and price to rise, thereby further consolidating the achievements of the high-end brand.
Liquor brands are moving towards high-end, and the price increase is just a car engine
For any brand to move towards high-end, it is important to raise the price, but the wine company should also consider the relationship between volume and price. This is critical. The key sign of the success of the high-end liquor is that "there is price and quantity".
In fact, this is not the first time that Shuijingfang has raised prices.
As early as 2017, 2019, 2020, and 2023, Shuijingfang has raised prices, except for 2020, when offline circulation was blocked by the epidemic, after almost every adjustment, the revenue and profit of the year have increased.
Tianyancha APP financial information shows that the company's gross profit margin and net profit margin were very stable during the period.
If the price increase is only the final result, then the brand appreciation is the key for liquor companies to move towards the high-end market.
What is the essence of the high-end liquor industry? In fact, it is the high-end of the brand. This requires wine companies to have both appropriate volume and price strategies, as well as strong marketing capabilities.
In the past, Yanghe's marketing ability was very strong, for example, Yanghe promoted its own marketing through the hotel intra-plate model in the early years, taking the core hotels as the fulcrum, monopolizing the liquor consumption of these core hotels by investing money, and using hotel consumption as a "small plate" to drive the consumption atmosphere of Yanghe products by surrounding groups, and then turn the "big market" of cultivating Yanghe consumers.
Not only that, in terms of channels, he also created a deep distribution model at the beginning, etc., and in recent years, his digital marketing has been very successful, and his marketing digital case has even been included as a teaching case by the School of Economics and Management of Tsinghua University in 2022.
Compared with Yanghe back then, the high-end marketing tendency of Shuijingfang is actually more obvious.
In March 2017, Shuijingfang company re-launched the high-end brand Shuijingfang · collection master, priced at 899 yuan, the company focused on the high-end strategy for the first time, and got a lot of positive feedback in the trial marketing stage, in November 2017, Shuijingfang launched the ultra-high-end · Jingcui, priced at 1699 yuan, and selected the eastern city with strong consumption capacity as the base point for layout.
On the sales side, through the launch of the Jingying private banquet project for tasting and group buying, Shuijingfang also sells to customers for special entertainment. This can strengthen the connection with target consumers, let more opinion leaders recognize Shuijingfang's high-end brand, and promote its high-end image.
With a profound cultural heritage and continuous brand investment, as long as the wine company can penetrate the high-end crowd circle, the high-end thing has actually been achieved.
What kind of activities do high-end people like? Brands are there to reach the inner circle. Therefore, Shuijingfang began to open a cultural and aesthetic museum, held aesthetic ceremonies, and expressed the spirit of its own aesthetics.
Baijiu is not only a consumer product, but also a culture and an aesthetic.
The purpose of holding these activities is actually to spread the high-end image of the wine company's brand in a subtle and silent way, and this move touches the C-end, so that consumers can contact more easily and intuitively spread the brand image.
On the one hand, marketing penetrates the key circles, and on the other hand, it is to reorganize the strategy of large single products.
For high-end liquor brands, large single products with both volume and price have always been a strong moat.
When it comes to Moutai, we think of Feitian Moutai; When it comes to Wuliangye, we think of the eight generations of Puwu; When it comes to Luzhou Laojiao, we will think of Guojiao 1573. Although there is a big gap between Luzhou Laojiao's revenue and Moutai and Wuliangye, only Guojiao 1573 wine also makes many people recognize that Luzhou Laojiao's brand is high-end.
Therefore, the road to high-end wine companies is essentially a breakthrough road with a single-brand strategy.
In the second quarter of this year, the sales of Shuijingfang Zhenjiu No. 8 increased by 12.57% year-on-year, contributing significantly to the growth of high-end wine revenue, and the growth momentum is unabated.
In the future, Zhenzhuo No. 8 may become an important moat for Shuijingfang.
Summary:
The high-end brand market of liquor is highly competitive, and the high-end will not be completed overnight. The liquor industry is a rigid demand industry, even if it is cyclical, but the future must be bright.
Therefore, the more we are in the adjustment period, the more we should uphold the concept of long-termism, make steady progress, fully explore the value of traditional culture, and do a good job in the quantity and price strategy. Get ready for the next era when volume and price will take off.