---
title: "In-depth | How Will Wine Distributors Develop in 2017?"
description: "On December 1, 2016, Tian Zhuopeng, chairman of Zhuopeng Strategic Consulting and a practical marketing expert, delivered a practical training session on the overall trend of the wine industry at the New Food Lecture Hall. This will basically provide you with comprehensive and systematic thinking guidance and specific practical guidance in the fierce market competition."
author: "酒文化守望者"
publisher: "New Distribution"
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published: "2016-12-06"
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# In-depth | How Will Wine Distributors Develop in 2017?

> On December 1, 2016, Tian Zhuopeng, chairman of Zhuopeng Strategic Consulting and a practical marketing expert, delivered a practical training session on the overall trend of the wine industry at the New Food Lecture Hall. This will basically provide you with comprehensive and systematic thinking guidance and specific practical guidance in the fierce market competition.

On December 1, 2016, Tian Zhuopeng, chairman of Zhuopeng Strategic Consulting and a practical marketing expert, delivered a practical training session on the overall trend of the wine industry at the New Food Lecture Hall. This will basically provide you with comprehensive and systematic thinking guidance and specific practical guidance in the fierce market competition.
Text: Tian Zhuopeng | Compiled by: Mingyue Team
****Trends: Three Major Trends in China's Wine Industry in 2017****
**(1) Industry Concentration Trend**
In the industry development cycle, industry concentration has occurred before, but this time it is different from the previous concentration where all enterprises grew. This concentration involves both increases and decreases, meaning the concentration process is one of industry optimization and brand strengthening.
National brands are concentrating in three directions: toward first- and second-tier famous wines, regional brands toward the top three in the province, and toward the top one or two in the region. Tian Zhuopeng cited an example: when Laobaigan is determined to continue deepening its presence in the Hebei market and focus on the provincial market, it will have the opportunity to create a 5 billion yuan market in Hebei.
**(2) Return of Traditional Channels**
Yanghe is currently doing one thing: sinking its channels to the township level. Tian Zhuopeng said he has specifically conducted research in some township markets in Hebei, and indeed there is great potential. The value of traditional channels is returning: it is predicted that in 2017, the main energy of Chinese wine enterprises will return to intensive cultivation of traditional channels, and innovate in the process of returning. Catering is returning: A-class restaurants are redoing banquet cities; B-class restaurants focus on specialty stores; C-class restaurants are back in sight and become the main battlefield for high-end bottle wine cultivation. Tobacco and liquor stores are returning: intensive cultivation, expanding coverage, and sinking to key townships are the trends; chain supermarkets are returning: manufacturers will further value the role of supermarkets and hypermarkets, especially for first- and second-tier famous wines and regional local wines, while increasing cooperation with chain channels for exclusive sales.
**(3) Contraction and Expansion of Main Price Bands**
The 30-50 yuan price band is contracting, while the 50-80 yuan band is expanding; the 100-200 yuan band is in a state of normalized squeeze competition; the regional 200-300 yuan band is in an expansion stage; the above 300 yuan band is contracting and brands are concentrating toward famous wines.
It is predicted that in the next three years, 50% of the mainstream wedding consumption in counties, townships, and villages in Hebei, Henan, Shandong, and other provinces will upgrade to the 80 yuan price band, with the rest mostly around 50 yuan.
****Challenges: Ten Challenges Facing Distributors in the Face of the Trend****
Corresponding to the industry trends, the channel reform situation is presenting the most complex and subversive state. The reasons are: with the reform of China's income distribution system and economic structural adjustment, the rise of the middle class, and the increase in welfare for low- and middle-income earners, the driving factors of China's baijiu industry channel model will also change. The baijiu industry will return to the mass-driven stage, and correspondingly, the true market-oriented operation of channels will begin. New channel models such as specialty stores, chain channels, e-commerce, crowdfunding, and customized marketing will flourish. Channels will further flatten, and the brand-winning stage centered on consumers is coming.
**Challenge 1: Where is the road? Innovation has no bottom, but not innovating is even more bottomless**
Many distributors in this round of adjustment often encounter the question of whether to join an internet platform, but the problem is not that simple. This round of industry adjustment is a very large industry challenge, lasting a long time, and is still in the deep adjustment period; this round of adjustment is a systematic adjustment of the entire wine industry, involving multiple levels such as macroeconomics, channels, consumers, marketing, products, and industry chain integration.
**Challenge 2: How will the model change? Is the traditional model "failing" or "reducing efficiency"**
Distributors are familiar with old marketing models such as hotel plate and consumer plate, but the method of attacking hotels and public relations with core consumers through group buying to start a market no longer works. The adjustment of national policies has made old methods useless. So what is the new marketing model? Distributors are unclear.
**Challenge 3: E-commerce impact! Can it truly subvert tradition? Is it a decisive battle of business models?**
Currently, many wine enterprises do not have the energy or ability to do e-commerce channels. The internet, as a new tool, new channel, and new medium, is subverting traditional models. This year, various e-commerce models have entered a critical year of staking territory, posing serious challenges to traditional distributors.
**Challenge 4: Chain impact! PK tradition, is it a protracted war of business laws**
Tian Zhuopeng cited an example: in Beijing, it is difficult to find a wine chain with more than 30 stores. When a distributor reaches such a scale, no enterprise can bypass the chain to achieve channel sinking. Many big distributors transform by investing in products or distilleries, but this is not the only way.
Currently, well-known domestic wine chains include Yinji, Huazhi, 1919, Jiu Bianli, Jieqiang, Hualong Wine, etc. Among them, Huazhi, Jiu Bianli, and 1919, through the combination of O2O online and offline, have the potential to subvert the traditional wine sales model. Compared with traditional distributors, Jiu Bianli and 1919 have deep control over terminals.
**Challenge 5: Product selection? Best-selling products have no opportunity, no profit, and cannot be changed; strategic new products are difficult to sell, difficult to increase volume, and have a long cycle!**
At present, famous wines are scarce resources and no longer easy to obtain. In the era of mass wine, various manufacturers have launched new mass wine products to cater to the market, but the products are homogeneous and lack any characteristics. How can distributors select products that meet market demand and can grow into big single products? From the market perspective, the current best-selling wine big single products have been operating in the market for many years, and few new big single products have succeeded in the short term.
**Challenge 6: Team building? Why are there still only a few guns after many years?**
The team is unstable. Newly recruited sales personnel, mostly post-90s only children, cannot endure hardship, are difficult to manage, and new people are hard to train. They have high expectations for salary and benefits, all of which cause instability in the old business team, slow cultivation of the new business team, and thus affect the company's performance improvement.
**Challenge 7: Profit decline! Growth is mediocre, expenses are rising! The essence is that zombie products are hard to remove, best-selling old products are hard to cut, and profit products are hard to make!**
Prices are transparent, and profits are reduced. Now selling wine, rent, advertising fees, marketing expenses, packaging fees, transportation fees, channel fees, personnel wages, etc., are all rising, which invisibly compresses distributors' profits. In the overall economic development environment, rising costs and declining profits should be the personal feelings of most distributors.
At the same time, Tian Zhuopeng gave a positive evaluation of the current price increases by some distilleries.
**Challenge 8: Inventory is hard to eliminate! It is a problem of balancing manufacturers and merchants, inventory and shortcomings!**
Now many enterprises no longer press inventory, and distributors no longer press inventory on terminals. In fact, this is a misunderstanding. There should be a reasonable inventory.
**Challenge 9: Channel mutation, where is the channel driving force in the post-three-public-consumption era?**
In the golden decade of baijiu, distributors generally operated mid-to-high-end products and generally operated group purchase channels, with high profits and relatively simple operation. During this period, many group purchase distributors specializing in group purchase channels appeared.
Tian Zhuopeng pointed out the path: customization.
**Challenge 10: Manufacturer-dealer game, how to deal with the manufacturer's step-by-step pressure**
The manufacturer's flattening operation will be a major trend. Under this situation, distributors cannot sit still and wait for death, but must further strengthen their own advantages to strive for more say. For big distributors, it is to sink channels and deepen the market.
****Transformation: How Should Distributors Transform and Cultivate Internal Strength in the Face of Challenges****
Facing the ten challenges, distributors can only cultivate internal strength, achieve market sinking, systematic improvement, and consolidate the basic market to have a way out.
**(1) Four Core Indicators of Internal Strength Cultivation**
**(2) Refined Operation Model**
**1. Achieve Four Unifications**
****2. Adhere to Six Policies**
****3. Fight Four Major Battles**
**Elimination Battle:** Quantify indicators, spread the network, and quickly eliminate blind spots. Set different indicators by channel, cycle, and city segment. For example, in the first round, within one month, occupy 50% of urban catering, 50% of circulation, and set indicators for urban-rural fringes and villages.
**Display Battle:** First-level display must occupy the first visual position, with no less than 2 display surfaces, no less than 2 rows, and full product display. Second, third, and fourth-level displays also need clear corresponding standards.
**Atmosphere Battle:** Create atmosphere for core terminals: must achieve first in display, first in materials (many beverages and milk do this, but wine has not yet formed this atmosphere).
**Distribution Battle:** First aspect: determine the "1573 Terminal Core Store Project"; that is, 1-2 core stores in a village; 5-10 core stores in a township; 70-100 core stores in a county town; second aspect: create 3 image streets in the county market: 1 brand image street, 1 highlight catering street, and 1 highlight circulation street. Must achieve: first in display, first in materials, unique storefront, and first in main promotion.
**Source: Mingyue**
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