At the shareholders' meeting of Kweichow Moutai eight months ago, Zhang Deqin, attending as chairman for the first time, stated that if certain innovations in the market were not suitable for Moutai, the company would stop doing them. At that time, there were no reports of the sauce-flavored latte being taken off shelves, nor were there widespread rumors of Moutai ice cream stores closing. Sauce-flavored latte, Moutai ice cream, liquor-filled chocolate, and i-Moutai were all key tools in the youth-oriented strategy during Ding Xiongjun's era. Moutai liquor no longer appeared solely in liquid form, gaining far more attention from young people than expected. However, with the change in corporate leadership, Moutai's youth strategy seems to be adjusting.
At the market work conference in mid-last year, the company pointed out the need to transition to new business consumption, focusing on practitioners in emerging fields such as biotechnology. One reason for this "turning of the ship" is that revenue from Moutai liquor derivatives is negligible compared to the scale of over 100 billion yuan in revenue. On the other hand, in the era of stock competition in the baijiu industry, the entire sector has shifted from extensive expansion to refined operations, and the "king of liquor" prefers to focus on its main business to seek growth.
Abandoning youth orientation?
Moutai ice cream recently trended again on social media, not for opening new stores but for closing stores. In fact, there had been earlier rumors of Moutai ice cream stores closing or stopping sales. Even earlier, the sauce-flavored latte from Moutai and Luckin Coffee had gradually disappeared from Luckin's menus in some cities. Kweichow Moutai has not publicly responded to these rumors, and its partners have remained tight-lipped. It seems that everything is quietly fading from public view in a tacit understanding. Moutai's silence contrasts sharply with the grand momentum of its youth strategy launched over two years ago.
The cross-industry trend in the baijiu industry began in 2022, with Moutai ice cream, i-Moutai, liquor-filled chocolate, and sauce-flavored latte emerging one after another, attracting far more attention from inside and outside the industry than expected. Among these Moutai liquor derivatives, Moutai ice cream played an important role in communicating with young consumers. Then-chairman Ding Xiongjun once described it as a strategic product and an important lever for the youth strategy.
Moutai ice cream, launched in May 2022, was called "the first sip of Moutai for young people" and was once resold at high prices of over 100 yuan. By June of the following year, total sales had approached 10 million cups, with sales revenue exceeding 600 million yuan. However, after 2024, Moutai ice cream's presence gradually weakened. A check via the Moutai ice cream mini-program revealed that many stores had suspended operations, including those in first-tier cities like Beijing. Some reports suggest that Moutai's ice cream business may exit this year.
After ice cream, the sauce-flavored latte in collaboration with Luckin Coffee was the second hit product. In September 2023, the sauce-flavored latte coffee sold over 5.42 million cups on its first day, with sales exceeding 100 million yuan, a commercial myth. The company followed up by launching liquor-filled chocolate with Dove, which was also hard to get. Cross-industry collaborations indeed brought Moutai tremendous traffic, but these derivatives did not directly drive the company's scale growth.
In the company's financial reports, these businesses are not even listed separately; they are all included in other income. From 2022 to the first half of 2024, other income was approximately 328 million yuan, 475 million yuan, and 217 million yuan, respectively, which is almost negligible in the context of over 100 billion yuan in revenue each period. But the partners have profited handsomely. Luckin Coffee publicly announced that as of March 21, 2024, its sauce-flavored latte users had exceeded 25 million. Previously, Luckin had stated that the sauce-flavored latte would be sold long-term, but now the product has begun to exit the market; the liquor-filled chocolate products containing Moutai liquor have also quietly disappeared from the market.
Proactive contraction
In April last year, Zhang Deqin, who had led Xijiu for two years, returned to officially take the helm of Kweichow Moutai. As an old Moutai person who grew up from the Moutai workshop, he has set the company's development direction to focus on the main baijiu business. At the same time, Zhang Deqin also emphasized that the company will try innovations that can empower Moutai liquor, but innovation must be based on adhering to the bottom line of Moutai quality. This may be one of the important reasons why the grand youth strategy of Moutai cooled down almost overnight.
As a high-end sauce-flavored baijiu brand, Kweichow Moutai is positioned as a high-quality baijiu. Clarifying its target audience and continuing to consolidate its market advantage is a strong card to weather cycles. Over the past year, the baijiu industry has seen prominent price inversion, with the overall baijiu consumption market weak. The terminal market price of Moutai liquor has fluctuated, affecting the interests of distribution channels and even the stock price. In late June last year, the wholesale reference price of the core product Feitian Moutai once fell below 2,100 yuan per bottle, approaching the psychological bottom line of channels. The company quickly stabilized prices by canceling the release of 12-bottle cases and suspending shipments of products like 15-year aged Moutai. After these policies, the price of Feitian gradually recovered from the low point. According to today's liquor prices (as of the 14th), the wholesale reference prices for 24-year loose bottles and 24-year original cases of ordinary Moutai rose to 2,220 yuan and 2,240 yuan, respectively. In the third quarter of 2024, the company continued to adjust its shipment structure, increasing the quota proportion of Dragon Year zodiac Moutai and premium Moutai, thereby reducing the quota proportion of ordinary Moutai, improving and optimizing the overall product structure of Moutai liquor. It is estimated that for the full year last year, the company achieved operating revenue of approximately 173.8 billion yuan and net profit attributable to the parent of approximately 85.7 billion yuan, up 15.4% and 14.67% year-on-year, respectively. This year, the company may continue to stabilize prices by adjusting the product structure. According to a research report by BOC International, the domestic market supply of Moutai liquor will increase in 2025. However, the supply of premium Moutai will decrease, while kilogram Moutai will moderately increase, to ensure the stability of ordinary Moutai wholesale prices. In addition, in terms of series liquors, the company will continue to build three 10-billion-yuan business units: Moutai 1935, Moutai Prince Yingbin, and Han Sauce.
With the change in the main consumer group of baijiu, Kweichow Moutai has chosen to refocus on business consumption scenarios. In the first half of last year, the company had already proposed the idea of transitioning to "new business" in a complex market environment, targeting practitioners from small giants, specialized and innovative enterprises, and unicorns as new consumer groups. As an old Moutai person, current chairman Zhang Deqin clearly understands that refocusing on the main baijiu business and continuing to explore business gathering scenarios is the fundamental way to drive Moutai's growth.
【New Order · Symbiosis】 The 10th China FMCG Innovation Conference Time: March 17-19, 2025 Location: Chengdu, China