By Heige Damo Institute / Heige Consulting R&D Department
The bottle-light wine arena is full of heroes, and the magnificent waves discuss the heroes.
In recent years, the bottle-light wine market has been thriving. According to the market survey report of the China Alcoholic Drinks Association, bottle-light wine entered the fast lane since 2013, with the market size growing from 35.2 billion yuan to 98.8 billion yuan in 2021, a compound growth rate of 13.8%. From 2022 to 2024, the market is expected to maintain an annual growth rate of 16%, and by 2024, the market capacity will exceed 150 billion yuan.
Six Major Camps, Three Major Characteristics
Analysis of the Driving Forces of Bottle-Light Wine
From the perspective of market competition, the bottle-light wine market is fierce, with numerous varieties and a fragmented landscape. Due to the simple production process, low consumption threshold, and large market space, various liquor enterprises have entered this segment, attempting to get a share. According to the current competitive landscape, the country can be divided into six major camps: national famous liquor bottle-light wine, provincial famous liquor bottle-light wine, regional bottle-light wine, fashionable small liquor, traditional bottle-light wine, and new forces of bottle-light wine.
Finding commonalities among differences, Heige Consulting summarizes the six major camps into three types:
A. Brand-driven bottle-light wine
Brand-driven bottle-light wine mainly consists of two camps. First, represented by national famous liquor brands, mainly including Fenjiu Bofen, Luzhou Laojiao Heigai, Langjiu Shunpinlang, and Gujing Laocigong, mainly driven by their own brand power. These brands share two characteristics: first, they all have sub-high-end products in the boxed liquor field and have a certain influence in national layout; second, they all have the attributes of old famous liquors, with certain brand awareness and quality recognition among consumers.
Second, represented by provincial famous liquor brands, mainly including Henan Caitaofang Xiaorou, Anhui Golden Seed's Seed Qingchun, Shanxi's Fenyangwang, Yingjia Dale, and Xiaole. These provincial liquor brands have a certain brand influence within their provinces and also drive the market through brand and quality.
B. Channel-driven bottle-light wine
Channel-driven bottle-light wine also consists of two camps. First, represented by traditional national bottle-light wine enterprises, mainly including Laocunzhang, Longjiang Jiayuan, Niulanshan, and Yidanliang, mainly relying on their own cost advantages, driving the market through channels, and ultimately forming brand power. These brands also have great characteristics: the marketing strategy and model of promoting around terminals has become a model case in the industry.
Second, represented by regional liquor enterprises, such as Bayannur Shetai Erguotou, Cangzhou Sanjing Xiaodao, Yibin Xufu Daqu, and Lianyungang Tanggou Liquor. These products use geographical advantages and channels to do the market, only having a certain brand power and consumer awareness locally.
C. Consumption-driven bottle-light wine
Consumption-driven bottle-light wine is mainly represented by new forces of bottle-light wine, mainly including the industry dark horses that have emerged in recent years, Guangliang and Fenxing. These brands focus on user thinking, do everything around consumers, comprehensively occupy consumers' minds, and achieve rapid market breakthroughs.
These new brands have three characteristics: First, they cater to industry development trends, lead consumer demand trends, and establish a brand value system; second, they attach importance to brand operation, plan brand communication plans, and drive both brand and channels; third, they reach consumers, promote cultivation, promote sales, and complete the value chain path.
Under the Three Major Phenomena and Current Situation
Four Directions for Bottle-Light Wine to Break Through
The sinking of famous liquors, the pattern of traditional enterprises, the development of regional liquor enterprises, and the intervention of new forces in bottle-light wine have led the bottle-light wine market into a stage of contention, with increasingly fierce competition and serious homogenization. Under this industry situation, Heige Consulting has summarized three major phenomena in the bottle-light wine industry:
First, traditional bottle-light wine finds it difficult to break through brand awareness, and structural upgrading is not ideal. From the late 1990s to around 2010, with the development of the market economy and the focus of famous liquor enterprises on boxed liquor, traditional bottle-light wine enterprises led by Laocunzhang seized the gap in the bottle-light wine market, laid out nationwide, and established the consumption foundation of the mass market. Due to low prices, high operating costs, and low profits, they determined a strategy of concentrating resources on terminal promotion, forming a development model driven by channels. Channel power promotes brand development, and consumers rely on products and word-of-mouth to form brand power, forming an inherent perception of low-end liquor.
Heige Consulting believes that the "lowering" of bottle-light wine prices does not mean the low-end of its value. With changes in the market and economic environment, bottle-light wine prices have continuously moved up from 15 yuan to 35 yuan to 50 yuan. In the past two years, high-line bottle-light wine at 40-60 yuan will see explosive growth, but the brand awareness upgrade of traditional bottle-light wine enterprises cannot keep up with changes in consumer demand, leading to unsatisfactory structural upgrading, forming a situation of difficulty in breakthrough or decline.
Second, famous liquor bottle-light wine uses strong brand endorsement to lead the market and occupy the future. In the autumn of 2017, the "National Bottle-Light Wine Leaders Conference" was held at the sugar and wine fair, which attracted high attention to bottle-light wine. In every year since then, media such as Tangjiu Kuaixun, New Food, and Jiuye Jia have taken the development of the category as their mission, together with industry experts and association leaders, to explore the development path of bottle-light wine, shifting from emphasizing "cost performance" to emphasizing "quality."
It was also during this period that famous liquors made strong efforts to lay out high-line bottle-light wine, and bottle-light wine entered the 50/80 price band. The fundamental reason is that these famous liquor bottle-light wines have strong brand endorsement and quality genes, in line with the trend of consumer upgrading, which is why Bofen, Heigai, and Laocigong have achieved initial success. Under the trend of favoring bottle-light wine, famous liquors use high-line bottle-light wine to lead the upgrade of the bottle-light wine industry, but the layout of famous liquors is basically too high-priced, far higher than the mainstream mass consumption price, which means that the sales of famous liquor bottle-light wine will not increase rapidly (except Bofen).
Third, new forces of bottle-light wine carry out deep brand operations, seize minds, and develop rapidly. The industry generally believes that bottle-light wine does not need brand power and brand operation at all, but bottle-light wine must have channel promotion. Channel promotion is a means to maintain the enthusiasm of channel operations and improve product vitality, but persistent promotion will only make products die from promotion. Laocunzhang, Longjiang Jiayuan, Xiaocunwai, etc. also need to undergo brand transformation, and traditional channel promotion is already decreasing.
The representative new force brands Guangliang and Fenxing have quickly become dark horses in the bottle-light wine industry since their launch, changing the traditional marketing model of promoting around terminals and selling through products and services, reconstructing new value brand concepts, combining consumer needs, corporate demands, and industry development trends to achieve communication resonance, deep brand operation, promotion and communication reaching consumers, and promoting brand positioning in consumer minds.
Due to changes in the economic environment, market environment, consumer groups, and consumption concepts, the mission, pattern, competitive environment, and marketing model of bottle-light wine will all change, and it will inevitably evolve with the development of the times. The ability to "arrange and combine" the supply chain under brand, production area, category, quality, and price bands has become the evolutionary advantage of bottle-light wine enterprises.
From the above three phenomena, it is not difficult to find that brand value driving the growth of the bottle-light wine market is comprehensively surpassing channel promotion driving the bottle-light wine market. To implement the new value brand concept of bottle-light wine, enterprises need to do the following four points:
First, strategic execution must be firm. Brand concept reform is a strategic issue that requires coordination within the enterprise, resource front-loading, and the introduction of brand operation planning from the early stage of product operation, forming strong brand power through effective communication methods;
Second, brand positioning must be precise. Leverage industry momentum, cater to consumer value needs, reconstruct a new value system for bottle-light wine, "not low-end, good wine without packaging, etc.", endow cultural value, and show the new connotation of bottle-light wine;
Third, communication content must resonate. Reach consumers, meet their actual needs, and complete the occupation of consumer minds through cultural content output and product innovation expression;
Fourth, in terms of communication methods, online + offline dual-wheel drive. Online, use the Internet, new media, and film and television media to strengthen brand building and communication; offline, use consumer theme activities to increase interaction with consumers.
In the past 20 years of development of strong-flavor liquor, the future development of bottle-light wine can basically be seen clearly. The logic of bottle-light wine from category competition to brand competition remains unchanged. To occupy consumer minds with quality, brand, and culture, bottle-light wine enterprises should also adhere to medium and long-term strategic determination, front-load resource investment, and deepen brand operations to stand out in consumer competition.
In general, the future of bottle-light wine is a huge and long-term cake. As people consume more and more rationally, China's bottle-light wine market has reached a time of cultural confidence where it can take off packaging and achieve high-end. If there is external capital support and continuous brand efforts, a batch of new forces in bottle-light wine will continue to emerge. Consumption-driven bottle-light wine will become a new trend, and in the next 2-3 years, 1-3 new national high-line bottle-light wine brands will appear.