---
title: "Health Wine Enters the Era of Three Kingdoms"
description: "In the post-pandemic era, consumer health needs are driving a new wave of health wine. The future of health wine lies in the strategic moves of leading brands like Hainan Yedao, Zhu Yeqing, and Maopu, which are exploring new directions in product positioning, market expansion, and capital restructuring."
author: "陈沛"
publisher: "New Distribution"
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published: "2022-12-13"
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# Health Wine Enters the Era of Three Kingdoms

> In the post-pandemic era, consumer health needs are driving a new wave of health wine. The future of health wine lies in the strategic moves of leading brands like Hainan Yedao, Zhu Yeqing, and Maopu, which are exploring new directions in product positioning, market expansion, and capital restructuring.

**Introduction:** In the post-pandemic era, consumer health needs are giving rise to a new wave of health wine. Where does the future of health wine lie?

Recently, Hainan Yedao, known as "China's first health wine stock," may be welcoming a new actual controller; Yang Bo, the head of Zhu Yeqing under Shanxi Fenjiu, has taken a new post at Shennong Technology Group, which industry insiders interpret as a possible integration of the two health wine brands Zhu Yeqing and Guilingji by Shanxi state-owned assets; and Maopu, under Jingpai, opened a new track for the "Herbal Era" in May.

The quiet warming of the health wine track not only meets consumer health needs but also aligns with the national strategy of "Healthy China," and has received policy support. It is understood that the consumption tax on health wine has been reduced from 20% to 10%.

However, the low market entry threshold for health wine has led to many players, making it difficult to form an industry structure similar to that of baijiu. In the fragmented health wine market, the moves of health wine giants also bear the industry task of "pathfinders."

Currently, Hainan Yedao, Zhu Yeqing, and Maopu reflect three exploration directions in the health wine industry. Understanding them may also reveal the future development trajectory of the health wine industry.

#### **Rearranging the Battle Formation**

With the outlook for the pandemic becoming clearer, leading health wine brands have begun a new round of layout.

Several supermarket owners in Henan told Jiu Zhouzhi that during the pandemic home quarantine, compared to baijiu at the same price, Jingjiu sold better. "It's mainly because people value the immune function regulation of health wine," said the head of a marketing company in Hainan to Jiu Zhouzhi. Many friends around him bought the local specialty Lujiu (deer turtle wine) for home consumption.

The surge in health wine has also attracted new players. In September this year, Nanjing Tongrentang Health Industry Co., Ltd. established a joint venture, Nanjing Tongrentang Wine Industry Co., Ltd., becoming a "new recruit" in the health wine industry.

Many companies are targeting the health wine track like Nanjing Tongrentang. Qichacha data shows that as of April 2022, the number of enterprises registered as "health wine" related in China has exceeded 330,000, with nearly 240,000 registered within the past five years.

"Currently, the health wine industry is still scattered, with leading enterprises almost countable on one hand," an industry insider told Jiu Zhouzhi. Health wine is a general term, including medicinal wine, liqueur wine represented by Zhu Yeqing, and even health-preserving wine. Although there are differences, they are all understood as health wine in the mass market.

**The three major health wine head brands familiar to domestic consumers are Jingpai (with Jingjiu and Maopu), Hainan Yedao (represented by Lujiu), and Zhu Yeqing under Shanxi Fenjiu. In the new wave of health wine, these three brands are also carrying out a new round of "rearrangement."**

Jingjiu's revenue exceeds 10 billion yuan, but the bottleneck of market growth is prominent. Maopu, which has reclassified its herbal category, is becoming a new growth point. In May this year, Maopu released a new herbal vintage wine and began to sprint towards the mid-to-high-end market.

Fenjiu's Zhu Yeqing has shown strong growth in the past two years. Before 2020, the sales scale of Zhu Yeqing hovered between 200 million and 300 million yuan. In 2020, the revenue of prepared wine mainly from Zhu Yeqing under Shanxi Fenjiu reached 653 million yuan. In 2021, the total revenue of prepared wine reached 1.25 billion yuan, a year-on-year increase of 91.39%, setting a new high.

**Among them, Yang Bo, the operator of Zhu Yeqing who made significant contributions, recently took a new post at Shennong Technology Group. A senior industry insider analyzed to Jiu Zhouzhi that both Fenjiu Zhu Yeqing and Shennong Technology Group, which owns Guilingji wine, are controlled by Shanxi state-owned assets. Yang Bo's sudden move may not rule out future resource integration and synergy between the two health wine brands.**

Hainan Yedao, holding the title of "China's first health wine stock," has upgraded its Lujiu industry into two major sectors: "health license" and "food license," and launched Lujiu sauce-flavored liqueur at this year's sugar and wine fair, continuously increasing its health wine sector. With the warming of health wine, Hainan Yedao, which has seen sluggish performance in recent years, may also welcome a new actual controller. The entry of a "new owner" may bring new dynamics at the market level.

## **Nationalization and Scenario Diversification**

Behind the "rearrangement" of the three major health wine head brands is the new dividend period that China's health wine industry is ushering in.

Data from the "China Health Wine Development White Paper" shows that internationally, the consumption of health wine, health-preserving wine, and nutritional wine accounts for about 12% of total alcohol consumption (including baijiu, wine, fruit wine, etc.).

Currently, China's health wine accounts for less than 5% of the total industry sales scale. Industry data shows that as of 2021, China's health wine market size reached 46.7 billion yuan, and it is expected to reach 58 billion yuan by 2024.

**China, as a major baijiu consumer and the birthplace of traditional Chinese medicine, has health wine industry data below the international level, mainly due to several reasons.**

First, different customs across regions make it difficult for health wine brands to expand nationally.

"Due to regional habits, currently, except for Jingjiu, which has achieved nationalization through the FMCG model, other brands have specific consumption areas," food industry research expert Jia Honghai told Jiu Zhouzhi. For example, health wine in Northeast China mostly uses local ginseng as the main raw material, while in Tibet, herbs like safflower are used in wine, each with specific consumer groups.

Second, health wine is mostly for self-drinking scenarios, which makes it difficult for brands to achieve scale and high premium.

In the view of many industry insiders, health wine is rarely seen in group meals or business banquets because, first, it cannot be consumed in large quantities to achieve business purposes; second, the main male consumer group is mostly taboo about drinking health wine in public.

Third, unclear functions make it difficult for consumers to choose effectively.

The health wine industry is not allowed to promote therapeutic functions by regulations, so it basically revolves around concepts like immune regulation and health preservation. Different Chinese herbs are used in wine, but the health concepts are similar, which deters many consumers.

**In response to the above industry bottlenecks, the three major health wine brands have also provided "solutions"—**

How to develop more drinking scenarios? Maopu, through the health connotation of "herbal pulp," extracts the active ingredients of traditional Chinese medicine and integrates them with the wine body, proposing the concept of healthy baijiu.

Compared with traditional health wine, Maopu is closer to the sensory and experience of ordinary baijiu. Coupled with its vintage wine concept, it adapts to more scenarios and has begun to attack the mid-to-high-end market.

In achieving the goal of nationalization, Zhu Yeqing has performed prominently. Especially in 2021, the total revenue of prepared wine mainly from Zhu Yeqing reached 1.25 billion yuan, a year-on-year increase of 91.39%.

"Zhu Yeqing pays more attention to R&D. Based on traditional old craftsmanship, the Qingxiang version of Zhu Yeqing reduces sugar content, making the taste more in line with current consumer needs," Mr. Meng, who is familiar with Zhu Yeqing, told Jiu Zhouzhi. To nationalize health wine and health-preserving wine, it is still necessary to align with market demand in taste through R&D.

**In addition, Zhu Yeqing basically does not have the "blue hat" (health food label); prepared wine is a more explicit label for Zhu Yeqing, which to some extent accelerates its nationalization process.**

For the unclear functions of health wine, Hainan Yedao has more clearly divided its Lujiu into "health license" and "food license" categories, allowing ordinary consumers who do not know how to choose to opt for the more universal "food license."

**The "Double-Edged Sword" of Capital**

For the health wine industry, positioning the product and market is important, and capital support is equally indispensable. The capital market is also a "double-edged sword," which is particularly evident in the health wine industry.

Zhu Yeqing, backed by Shanxi Fenjiu, made a major move in 2020 by increasing capital by 600 million yuan to strengthen investment in product quality and channel construction.

**After the capital increase, the registered capital of Zhu Yeqing Company is 660 million yuan. The injected funds are mainly used for brand building, market channel investment, new product R&D, and special traditional Chinese medicine innovation, as well as digital upgrading of the entire industry chain for production, supply, marketing, and research integration.**

Despite holding the title of "China's first health wine stock," Hainan Yedao has had a tough time in recent years. Moreover, with changes in the market environment, the performance of the Lujiu series products has not been ideal.

From 2016 to 2021, the sales revenue of Hainan Yedao's Lujiu series products was 111 million yuan, 95.1535 million yuan, 72.8169 million yuan, 30.4093 million yuan, 94.2388 million yuan, and 69.2831 million yuan, respectively.

In 2014, the well-known "retail investor" Feng Biao entered Hainan Yedao, and through equity holding and secondary market purchases, eventually became the actual controller with a 20.84% stake. In September 2017, Feng Biao transferred all his shares in Hainan Yedao to Dongfang Junsheng, which he controlled.

However, since 2018, Feng Biao and Dongfang Junsheng have been mired in capital chain difficulties, facing dozens of lawsuits, and have been repeatedly listed as dishonest judgment debtors, even affecting the listed company.

Since this year, Dongfeng Junsheng's shares in Hainan Yedao have been passively reduced three times, with the equity ratio dropping from 19.84% to 16.84%. Ten days ago, Hainan Yedao announced a plan to change the actual controller from Feng Biao to Wang Xiaoqing through a private placement.

However, on December 6, the Shanghai Stock Exchange sent an inquiry letter regarding the plan, adding a degree of uncertainty to Hainan Yedao's plan to change its actual controller.

For Hainan Yedao, the turmoil at the capital level and actual controller level inevitably transmits to the market level.

**For Hainan Yedao, which has been loss-making in four of the past six years, replacing the discredited actual controller may not be a bad thing. In the new round of market competition, Hainan Yedao urgently needs new capital blood to complete innovation in product, marketing, and other aspects.**

With the formation of the "Three Kingdoms" pattern among health wine head brands, the three companies need to compete in multiple dimensions such as revenue scale, product innovation, and channel iteration. After a new round of competition, the mid-to-long-term industry ranking may be determined.


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