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In the article "Written on the Eve of Change: Review and Prospect of the Liquor Industry", we glimpsed that the liquor companies at the top of the pyramid are actually anxious. Global development and overseas market expansion seem to have become the only way for liquor companies to seek new growth. So what stage is the liquor going to sea now? What are the characteristics? Compared with first-class enterprises, how many paths and paradigms are there for liquor companies to go overseas? Under different overseas paradigms, what are the key success factors for beverage companies? What are the implications? 1. Why are liquor companies also in a hurry to "go to sea"?
As mentioned earlier,The liquor companies at the top of the pyramid are also anxiousIn the environment of intergenerational switching of consumption and change of consumption concept, China's total alcohol output continues to decline. According to the National Bureau of Statistics, the country's total liquor production has been declining since peaking in 2016, from more than 13 million kiloliters in 2016 to more than 6 million kiloliters in 2022.
Compared with the top international wine companies, global development and overseas market expansion seem to be the only way to seek new growth. Diageo, Hennessy, Pernod Ricard and other international first-tier wine companies account for more than 70% of their overseas business.
2. What is the stage of liquor going to sea now? What are the characteristics?
Although the export volume and value of China's liquor have maintained growth, they are still at a low level. According to the data released by the General Administration of Customs, in 2022, China's cumulative export volume of alcohol will be 81640,000 kiloliters, export value 150.6 billion US dollars (about RMB 108.)2.5 billion yuan). Among them, the export volume of liquor was 1640,000 kiloliters, an increase of 237%；Export value 71.6 billion US dollars (about 4.8 billion yuan), a year-on-year increase of 2673%。In terms of calculation, the export volume of liquor accounts for only 2% of the entire liquor export sector, and the export value accounts for more than 47%. Comparing production and sales, the output of liquor enterprises in the country in 2022 will be 67120,000 kiloliters, sales of 6,6264.5 billion yuan. Among them, the export volume accounted for less than 024%, and the export value accounted for only 07%。
From the perspective of export destinations, the East Asian cultural circle is also the main overseas market for baijiu, and baijiu has not yet been recognized by the mainstream markets in Europe and the United States. In 2022, China's liquor exports from Japan, South Korea, and Australia accounted for 37% of the total72%。Among them, South Korea is the largest foreign market for China's liquor exports, accounting for 31 percent of its annual exports92% and 3038%。
The leading liquor companies have actively carried out internationalization strategies, but the results are still small. According to the annual reports of listed companies, except for Kweichow Moutai, most of the overseas business revenues of major liquor companies account for about 1%. In 2022, Kweichow Moutai's overseas market revenue, which has the highest proportion of overseas business, will be 42400 million yuan, a year-on-year increase of 6191%；As of the first half of 2023, there are 106 foreign dealers of Kweichow Moutai.
3. What are the key success factors for beverage companies under different overseas paradigms? What are the implications?
Enterprises go overseas: Diageo.
Diageo's corporate development history is a history of mergers and acquisitions of well-known brands in the global wine industry, which is based on capital operation, combined with changing marketing methods and psychological hints of the luxury market, which has become the key to the company's overseas expansion and becoming a global leading brand in just over 20 years.
M&A to enter new markets. When choosing an investment target, Diageo focused on three main factors: its strategic significance, future growth opportunities and synergies with existing businesses.
Brand integration. For Diageo, building a premium brand is more important than simply buying a company. It acquires a large number of promising but underdeveloped spirits and wine brands, enhances its product portfolio, and relies on a range of brand operations to build on these brands that ultimately deliver strong returns.
Integration and reuse of channel resources. Liquor business is regional, and the distribution systems of the United States, Japan and China are different. Diageo has developed different RTC (route to consumer) strategies for distribution rules in different markets, such as in the United States, where Diageo is required by law to operate through a ** distribution system, Diageo cooperates with distributors to provide a professional sales team of more than 1,000 people, in addition, in many markets outside the United States, Diageo owns and controls distribution channels, and in places where it has not yet established its own subsidiaries, it will adopt joint ventures, associates and acquisitions of third-party distributors. Under the strategy of global operation, Diageo can achieve the scale effect of multi-brand operation by relying on the channels established by the existing business, forming a virtuous circle.
Product to sea: Otter sacrifice
Dasai has a long history, but around the turn of the millennium, the interest of the younger generation in traditional Japanese culture declined, and the entire sake industry was in a slump, and the traditional family business of Dasai was on the verge of closure. Hiroshi Sakurai, then 34 years old, took over the distillery from his father and began to employ modern production techniques, quality management methods, and marketing methods that not only saved the company, but also made Dasai one of the most recognizable sake brands in the world.
At that time, sake sales in Japan were common**, and most sake breweries tried to maintain market share by keeping costs down and low prices**. Sakurai Hiroshi, on the other hand, has focused on making the extremely high-quality two-cut-and-three-point Junmai Daiginjo, and has chosen to use a 45-kimai ryukai instead of the 50-mill standard as other breweries. This practice has made the sake a symbol of the quality of Japanese sake.
Subsequently, he set his sights on overseas markets, working with a number of Michelin-starred chefs in France and the United StatesBringing sake to the high-end market in Europe and the United States as part of Japanese food culture. In this process, the characteristics of the Japanese sake industry also play an important role in themIt is produced using unified product standards and production process standards, and is evaluated in a way that is easy for Westerners to understand and quantitatively measure qualityBy allowing customers to understand the various details of the product, Japanese sake can quickly enter the European and American markets.
Culture Goes Global: Whisky.
There are many opinions on the reasons why it is so difficult for liquor to go overseas, and the taste preferences and consumption habits of overseas consumers are one of them. For example, Chinese baijiu needs to be paired with Chinese food, not with Western food, so foreigners can't drink baijiu with meals; For example, whiskey and other spirits can be drunk alone in the bar, or mixed with various drinks to make cocktails, but no one, including the Chinese themselves, runs to the bar to pour a glass of white wine and drink it slowly, let alone mix it with white wine to drink it into a cocktail.
Spirits go to sea by relying on national strength. Whisky, for example, was essentially dependent on the rise of the United Kingdom. The concept of whisky can be traced back to Scotland in the 15th century, with the rise of Britain in the Age of Discovery and the establishment of its global ** system, whisky technology spread to other European regions and North American colonies in the 16th and 18th centuries, and was introduced to Japan and other parts of Asia in the 19th century.
The export of liquor is extremely mismatched with China's economic status, and liquor has to rely on culture to go to sea in the end. Referring to the United Kingdom, there is a big gap between the status of Chinese liquor in the global commodity market and China's position in the world. The UK's GDP and total exports account for the world's proportions. 81%, while China's GDP and total exports accounted for the same period respectively. 46%。Scotch whisky accounts for almost 1 percent of the UK's total exports81%, while Chinese liquor accounted for only 0 percent of China's total exports that year02%。The "misalignment" between the export of liquor and China's economic status reflects that the effectiveness of China's cultural output and the acceptance of the value system still need to be improved.
Fourth, summary
Different industries have their own particularities, infrastructure and manufacturing to the sea more emphasis on the domestic accumulation of technology and experience to copy and export to foreign countries, showing the "Chinese speed", fighting is the manufacturing capacity, financial strength and the "hard power" of the integration of the first chain, andAlcoholic beverage companies go overseas, whether it is an enterprise going to sea, a product going to sea or a culture going to seaFight more for the "soft power" and "smart power" of the enterprise
Finally, this paper summarizes the overseas paradigm, key success factors and enlightenment of different liquor and beverage companies
Enterprises go overseasIt often takes capital operation as the fulcrum, and obtains foreign brands, technologies and markets through mergers and acquisitions, and further leverages overseas markets. For liquor companies, you can consider:Choose the opportunity to implement overseas mergers and acquisitions, give priority to the joint ventures and cooperation of overseas spirits distributors, and lay the foundation for the construction of overseas channels
Products go to seaEmphasis is placed on understanding the needs and habits of overseas consumers, by strengthening standards, or "reinventing oneself" to integrate into new markets. For liquor companies, based on overseas market research, we will innovate the product adaptability of sauce-flavored liquor, alcohol content, quality and other aspects, and create a variety of overseas star products; Focusing on the Chinese food scene, we will develop table wine products, and graft the international mainstream catering value system to promote the rapid development of liquor products; We will develop duty-free channels for international routes, and form strategic cooperation with large local spirits distributors in major spirits consumption countries to open up the sales situation of liquor.
Culture goes to seaThere is no need to "reinvent yourself", but toThrough the input of culture, consumers voluntarily and actively adapt to or even chase products, and naturally cultivate consumers to accept such consumption habits and tastes。For liquor companies, it is not only necessary to "go out" and create a "value system" that can be perceived and recognized globally, but also to "invite in". To build a world-class brewing wine production area, it is an important direction to use the production area as the carrier of the high quality and value of world-class famous wine. However, there is still a long way to go overseas for culture, and traditional Chinese culture may need to be exported to foreign consumers in a simpler and more understandable way, and more powerful and effective ways still need to be explored ......
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