For 2021, three years ago, the liquor industry should miss it a lot.
This year, Kweichow Moutai (600519SH) revenue exceeded 100 billion yuan for the first time, the soy sauce wine industry is "hot", the sub-high-end soy sauce liquor under Moutai has driven the consumption upgrade of the entire liquor industry, and foreign capital has also rushed into Moutai Town to build factories in an attempt to get a piece of the pie.
This year, other sub-high-end wine companies with flavors also grew rapidly. Shede Liquor (600702SH) and drunkard wine (000799SZ) have achieved more than eighty percent revenue growth, and the slightly slower Shuijingfang (600779SH) also grew by more than 50%.
At that time, the industry was thriving, and the highlight was Yanghe shares (002304SZ), Luzhou Laojiao (000568SZ) and Shanxi Fenjiu (600809SH) Which one can sit firmly in the "eye" position? Which one will be the "second share of soy sauce wine"? Who will be the next wine company with revenue exceeding 10 billion?
But in 2022, the situation has changed abruptly. Industry expert Wang Chaocheng's speech during the Spring Sugar period was a prophecy: "The current recovery of high-end and sub-high-end (liquor) is far less than expected."
In 2022, the revenue growth rate of Shede Liquor, Shuijingfang and Jiuguijiu Liquor will slow down significantly, of which Shuijingfang's revenue growth rate in 2022 will only be 088%；Guotai Liquor, which just announced that it had broken 10 billion yuan in 21 years, no longer disclosed sales data, and only said that it would "squat" to practice internal skills.
In the blink of an eye, the liquor industry is confirmed to have entered a downward cycle, and 2021 has become the "best" year for the liquor industry in the past three years.
The embarrassing thing is that the wine companies in 2023 look around and find that they are facing the embarrassing situation of having no "stones" to touch in this round of downward cycle. The current environment is somewhat similar to the last round of industry adjustment since 2012, but more importantly, it is different.
The consumer environment has changed, the industry environment has changed, and the experience of the past is difficult to reuse and no longer works. The liquor industry is groping for a way to break the situation in a difficult situation.
There is no doubt that clearing inventory has become the main line of the liquor industry in 2023, and after the channel inventory has become a "dammed lake", it has also been shown in the financial reports of liquor companies.
Tradewind (ID: tradewind01) is classified by high-end liquor companies, sub-high-end liquor companies and regional liquor companies, and selects three liquor companies for horizontal comparison.
In the first three quarters of 2023, Kweichow Moutai and Wuliangye (000858., which represent high-end liquorSZ) and Luzhou Laojiao, Kweichow Moutai's revenue in the first three quarters exceeded 100 billion yuan for the first time, but the revenue growth rate in the third quarter slowed down, even lower than the 15% growth target set at the beginning of the year;
Wuliangye, on the other hand, achieved the highest growth rate since the second quarter of 2021 after its revenue growth slowed to single digits in the second quarter of 2023 and achieved the highest growth rate in the third quarter**.
Luzhou Laojiao's performance is decent, in line with the outside world's expectations of its growth stocks, with revenue exceeding 20 billion yuan in the first three quarters, with a growth rate of 2521%。
From the perspective of inventory turnover days, which represent operational efficiency, the performance of high-end liquor in the first three quarters of 2023 has been differentiated.
The inventory turnover days of Moutai and Wuliangye, which are not worried, have decreased, while Luzhou Laojiao has increased by 164 days year-on-year.
In stark contrast to the high-end liquor, the sub-high-end liquor was the most injured in this round of adjustment.
In the first three quarters of 2023, among the three Shede Liquor, Shuijingfang and Jiugui Liquor, only Shede achieved positive growth, with a year-on-year increase of 1362% to 524.5 billion yuan, and the revenue of drunkard wine and Shuijingfang decreased by 38 year-on-year respectively54% and 484%。However, Shuijingfang began to resume growth in the second quarter of 2023, and the performance of Alcoholic Spirits in the third quarter has not stopped falling.
From the perspective of inventory performance, in addition to Shede Liquor's inventory turnover days in the first three quarters decreased by 1 day, Shuijingfang and Drunkard Liquor both increased to varying degrees, of which Shuijingfang increased by 62 days year-on-year, and Drunkard Liquor increased by 80% year-on-year to 856 days. The turnaround days are even close to or far beyond the whole year of 2022, as if it can't press the channel.
The different coolness and heat in 2023 is also reflected in the performance of regional liquor companies, which is also better than that of sub-high-end liquor.
Shanxi Fenjiu, Yanghe and Gujing Gongjiu (000596SZ) achieved revenue growth in the first three quarters of 2023. 35% and 25%.
Trade Winds (ID: tradewind01) once pointed out in "How to Reshuffle Sub-high-end Liquor" that regional liquor companies such as Shanxi Fenjiu and Gujing Gongjiu have been able to maintain a higher growth rate in this round of downward cycle due to their richer product belts and larger niche markets in the province. A case that can explain the richer the product structure and the higher the fault tolerance rate is that although the performance of Yanghe M6+ in the sub-high-end ** belt in 2023 is not ideal, according to Xinfeng (ID: tradewind01) from people close to Yanghe shares, the blue of the sea located in the public ** belt has unexpectedly become a hit outside the province, and Yanghe has upgraded the product line.
From the perspective of inventory, in addition to the turnover days of Gujing Gongjiu increased by 56 days, Shanxi Fenjiu and Yanghe shares decreased by 19 days and 31 days respectively.
The number of days of inventory turnover represents the operational efficiency of the wine company to a certain extent, and the contract liability represents more of the distributor's confidence in future sales.
In today's consumption environment, confidence is indeed more precious than gold.
The contractual liabilities include the payment made by the distributor to the wine company. In the first three quarters of 2023, among the three high-end liquor "Maowulu", only Kweichow Moutai's contract liabilities have decreased, which may be related to the change in its payment policy, and dealers pay on a monthly basis instead of quarterly.
Wuliangye and Luzhou Laojiao increased by 33% and 58% year-on-year, respectively.
At the end of 2023, due to the partial overlap of the dealers of Wuliangye and Luzhou Laojiao, the two are full of games in order to seize channel funds.
On the eve of the 2023 Wuliangye 1218 Dealer Conference, Wuliangye released the news that the general five will be reduced by 20% next year and the price will be raised, intending to stimulate dealers to make payments.
But almost synchronously, Luzhou Laojiao will take a "limited-time special" for its high-end single product Guojiao 1573, and the dealer will make a payment before December 18, and the ** of Guojiao 1573 will drop by 30-50 yuan. December 18 is the day of the Wuliangye Distributors Conference.
On January 30, 2024, Wuliangye's boots that raised the price of Puwu finally landed, and the ex-factory price of Puwu was increased by 50 yuan after February 5.
According to Tradewind (ID: tradewind01), it was learned from people close to Wuliangye that this move was due to Wuliangye's Spring Festival payment target being less than expected, and its payment collection progress in January had not reached 60% of the year, while Wuliangye's plan was to reach 80% to further seize the dealer's funds.
As for whether Luzhou Laojiao will continue to follow the strategy and increase prices, it is still in suspense.
The entanglement of high-end liquor lies in raising prices, while the entanglement of sub-high-end liquor is even more.
The latter has to take into account both volume and channel profits, which is obviously not easy in the downward cycle of the industry.
Although Shede Liquor and Shuijingfang recorded revenue growth in the second quarter of 2023, it is not easy to destock channel inventory. In the first three quarters of 2023, the contract liabilities of the two were almost the same as the same period last year, while the alcoholic liquor fell by 25% year-on-year.
It is worth mentioning that at the end of 2023, in order to promote the collection of payments, Shede Liquor will also raise the price, and its ex-factory price of the core product "Taste Shede" will be increased by 20 yuan bottles. Earlier, Shuijingfang also raised the price of products such as "Collection".
Trade Winds (ID: tradewind01) learned from people close to the wine industry that after the price increase of Taste Shede, the dealer's payment price has reached 438 yuan, and the batch price has been inverted with the ex-factory price of more than 100 yuan.
In addition, an analyst from the East China AMC brokerage company said to Tradewind (ID: tradewind01) that the price increase of Shede Liquor is aimed at promoting the collection of payments during the Spring Festival, which has little impact on channel profits, and the follow-up Shede Liquor will maintain the stability of channel profits through rebates and other forms.
Among the top three regional liquor companies, in the first three quarters of 2023, the contract liabilities of Shanxi Fenjiu and Gujing Gongjiu, which have a slightly faster growth rate, have diverged, with the former increasing by 11% year-on-year, while the latter decreasing by 13% year-on-year; Yanghe's contract liabilities decreased the most, sharply reducing by 33% year-on-year to 5.5 billion yuan.
In this downward cycle, wine companies in 2024 are facing the situation of how to re-touch the stones.
The current environment is somewhat similar to the last round of industry adjustment since 2012, but it is more different.
In 2012, the ban on the consumption of liquor and three public liquors hit the liquor industry hard, but in this process, liquor consumption gradually shifted from B-end government and enterprise customers to C-end business banquets.
In 2019, the liquor industry came out of the last round of downward cycle and took advantage of the consumption upgrade to achieve a new round of growth.
Fan Jinsong, an analyst at Zhongtai **, pointed out that in 2019, the liquor industry will come out of the downward cycle, but the era of rising liquor volume and price driven by the rapid growth of the total economy has passed.
But in 2023, consumer demand will also weaken, but the industry environment will be very different. The real estate industry, which drives liquor consumption, has long entered a downward cycle, consumption upgrading has also come to an abrupt end, and the improvement of demand has not yet seen an inflection point.
In the final analysis, the relationship between supply and demand is the key to determining the recovery of the liquor industry. When demand is gone, even industry leaders are under pressure.
In October 2023, Kweichow Moutai raised the price of Feitian Moutai again after five years, and the ex-factory price of the core product 53 degrees Feitian Moutai increased from 969 yuan to 1169 yuan, with a range of about 200 yuan.
However, as of the end of January 2024, the effect of Feitian Moutai's price increase on the batch price is not obvious, and its current batch price is less than 2,700 yuan, which is still lower than the same period in 2022. This means that after the price increase, Moutai is robbing the profit margin of dealers.
Although in the downward cycle in 2012, the market price of Feitian Moutai "dived" from 2,000 yuan to 800 yuan. However, under the policy stimulus, from 2016 to 2021, the batch price of Moutai rose all the way from 850 yuan to 3,500 yuan.
Xue Yuhu, an analyst at Guohai, attributed the rapid approval price of Moutai to the joint catalysis of events such as the industry's inventory increase, the increase in demand due to economic development, the stimulation of Moutai's non-consumer demand and the appreciation effect of hoarding Moutai.
The above-mentioned East China AMC brokerage analyst said on the analysis of trade winds (ID: tradewind01) that the industry entered a downward cycle in 2012 and was different from the current one, when consumer demand fell off a cliff; The experience of the liquor industry in getting out of the downward cycle since 2017 cannot be used for reference now, because the last round was more affected by short-term macro policy stimulus.
Therefore, in 2023, the outside world will be able to see more liquor companies actively seeking change. For example, Kweichow Moutai has made frequent moves, and "Xia Fan" has joined hands with Luckin Coffee to launch a sauce-flavored latte product, trying to cultivate young consumers while also increasing the opening rate of Feitian Moutai.
At the same time, more and more wine companies such as Kweichow Moutai, Wuliangye, Luzhou Laojiao, and Yanghe Co., Ltd. are setting their sights on overseas markets, hoping to find increments by going overseas. In 2024, there will be news that Kweichow Moutai will open its overseas rights to some domestic dealers.
However, for Chinese baijiu, under the huge cultural differences, it is still unknown whether the flowers blooming inside the wall can be fragrant outside the wall. It is difficult to ensure that the final products are exported to domestic sales, and it has become a means to subsidize dealers to get goods at low prices.
The liquor industry, which is seeking change in the midst of difficulties, still has a long way to go.
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