Source丨Yunjing Toutiao "To worry before the world worries, and to rejoice after the world rejoices." This famous quote from Fan Zhongyan's "Yueyang Tower Record" not only captures the spirit of Hunan culture but is also deeply engraved in the heart of Li Zhilong, chairman of Hunan Sunshine Wine Co., Ltd., executive vice president of the Hunan Provincial Wine Industry Association, and president of its Circulation Branch. On the wall of his office hangs a calligraphy piece of "Yueyang Tower Record," which not only interprets his personal sentiments but also serves as a mirror reflecting his sober thoughts on the industry's essence. "Baijiu is a carrier of emotions and our original aspiration. Now is the time to return to that original aspiration." Facing the dramatic shift in the baijiu industry from "capital carnival" to "overcapacity," Li Zhilong, who has been deeply involved in the industry for over 30 years, believes that the liquor industry urgently needs a thorough transformation of "returning to the original aspiration," adhering to quality foundations and cultural values, and working steadily and persistently to achieve long-term stability and success. Looking Back: Witnessing the "Capital Carnival" In the conversation with the author, Li Zhilong rarely talked about himself, but more about his concerns and deep thoughts on the industry's current situation. The dialogue began with the "sauce-flavor baijiu craze" of a few years ago. Li Zhilong recalled that during the peak of the "sauce-flavor craze," many friends blindly followed the trend in consumption; some even customized over a thousand cases of sauce-flavor baijiu at once, far exceeding their actual consumption capacity. At the same time, this created an illusion for distilleries that the market could absorb such scale of production. Besides sauce-flavor baijiu, other aroma types also began blind expansion, and risks followed. When the craze subsided, inventory piled up at all market levels, and sell-through fell short of expectations, making him more vigilant about industry bubbles. In Li Zhilong's view, the irrational prosperity driven by capital has accumulated a large number of bubbles, hiding three major crises.
- Irrational Prosperity Driven by Capital Li Zhilong remembers that during the "sauce-flavor craze," a baijiu stock once hit multiple limit-up boards merely on rumors of building a factory in Guizhou, which was not an isolated case in the stock market. Behind this irrational prosperity, capital is a major driver, often chasing short-term returns, which runs counter to the long-termism that the liquor industry has always upheld. For the traditional liquor industry, capital is more like a "double-edged sword": it can support industrial development, but it can also deviate the industry from its course, causing speculative bubbles at best and harming the industry's foundation at worst. "Capital should not be the engine of the industry, but a booster of value." Li Zhilong believes that a healthy development model should guide capital toward long-term value areas such as craft inheritance and quality innovation, becoming a "booster" for steady industry growth rather than an "engine" that distorts laws.
- Bubbles from Overcapacity Over the past decade, the output of baijiu enterprises above designated size in China peaked at 13.584 million kiloliters in 2016. Since then, baijiu output has continued to decline, with an average annual decrease of 10%. According to the latest data from the National Bureau of Statistics, in 2025, the output of baijiu enterprises above designated size was 3.549 million kiloliters, a decrease of over 70% compared to ten years ago. At the same time, leading enterprises continue to expand production, and market share further concentrates among the top players. The industry as a whole shows a reality of overall contraction but local overcapacity. On one hand, upstream enterprises are expanding production, especially sauce-flavor baijiu, which grew from 500,000-600,000 kiloliters in 2018 to 750,000 kiloliters in 2023, only receding in 2024 (sauce-flavor capacity in 2024 was about 650,000 kiloliters, a year-on-year decrease of 13.33%). On the other hand, downstream sell-through is sluggish, and inventory is high. According to the 2024 annual reports of 20 A-share baijiu listed companies, their total inventory amounted to 168.389 billion yuan, an increase of 19.29 billion yuan year-on-year, with 13 companies seeing collective inventory growth. Compared with data from 2022 and 2023, baijiu enterprise inventory shows a continuous upward trend. The China Alcoholic Drinks Association's "2025 Mid-year Research Report on China's Baijiu Market" shows that over 40% of distributors and retailers face cash flow pressure; some distributors have extended inventory cycles, and price inversion is widespread. In the first half of 2025, wholesale prices were generally weak, with the 800-1,500 yuan price band experiencing the most severe inversion, and products in the 500-800 yuan band facing the most difficulty. The main selling price band shifted from 300-500 yuan down to 100-300 yuan. Li Zhilong believes that the imbalance between baijiu production and sales has become very serious. A reasonable inventory cycle should be within 3 months, but in reality, many terminals have accumulated inventory exceeding 24 months, creating enormous pressure to reduce stock. To solve this problem, the key is for manufacturers to face the real market demand.
- Price System on the Verge of Collapse Another consequence of capital speculation is inflated prices. After capital retreats, vicious price cuts can backfire on brand value, and companies may fall into a dual crisis of liquidity and confidence, potentially endangering the entire baijiu value system. The significant price decline and weak consumption in 2025 are the inevitable results of earlier speculation. "When prices rise, it's crazy; when they fall, it's irrational. Competing on price is the lowest level of competition, violating the laws of industrial development. It not only damages consumer and distributor expectations but will also lead to losses across the industry." Li Zhilong has long been concerned about the disorder in the baijiu market price system. He believes the industry's top priority is to stabilize the price system, which is key to restoring market confidence. Enterprises should focus on creating real user value and providing product experiences that delight consumers and give them a sense of pride. Return: What Is True Long-Termism? In Li Zhilong's view, the key to breaking the deadlock lies in returning.
- Return to Quality Foundations Quality is the only "moat" for baijiu. Li Zhilong emphasizes that enterprises should abandon low-price competition, strengthen the inheritance of traditional craftsmanship, maintain quality stability, focus on creating real user value, replace marketing rhetoric with product strength, and rebuild consumer trust.
- Rebuild Emotional Connections and Consumption Experience In recent years, baijiu manufacturers have increasingly favored online over offline, with online even trending to surpass offline. Li Zhilong mentioned that during major promotions like "6.18" and "11.11," manufacturers tilt resources toward online, making offline physical stores mere foils, weakening the bond between physical stores and liquor merchant platforms. But in fact, online marketing ultimately lands offline, and the vast majority of online data is offline sales. If it's just about price competition, it does little good for the industry's development because the pie is not growing but shrinking. Li Zhilong does not deny the advantages of online platforms in facilitating transactions and improving performance. However, he believes the value and status of physical stores are irreplaceable. Baijiu is not an ordinary FMCG product; it is an important carrier of Chinese culture, emotional communication, and social etiquette, a "catalyst" for emotional relationships. Its core competitiveness lies in cultural identity, emotional resonance, and status symbolism, not merely functional drinking. Physical stores, as the link and bridge between brands and consumers, can provide the best emotional value and are irreplaceable in creating atmosphere and conveying emotional value. In this regard, Li Zhilong offers two suggestions: first, deeply explore cultural value, strengthen brand stories around intangible heritage techniques, traditional festivals, and art collaborations to create deep emotional connections; second, reshape physical value by upgrading stores from "transaction places" to "cultural experience spaces," offering tasting, social, and other services to enhance soft value.
- Manufacturers, Distributors, and Consumers Jointly Build a "Community of Shared Future" For a long time, the relationship between manufacturers and distributors in the liquor industry has been strong manufacturers and weak distributors, which is detrimental to the industry's healthy and sustainable development. Li Zhilong believes the correct approach is to establish a long-term community of shared future between manufacturers and distributors. Manufacturers should respect the historical contributions of distributors, jointly maintain market order, and share the dividends of market development; manufacturers and distributors should work together to establish fair market rules, coordinate pricing systems, advocate transparent pricing mechanisms, eliminate false promotions and short-term behaviors, crack down on malicious cross-regional dumping, strengthen brand promotion and consumer cultivation, form a stable and healthy channel ecosystem, enhance long-term brand value, and achieve win-win and sustainable development for manufacturers, distributors, and consumers. Currently, leading enterprises such as Wuliangye have proposed strategies like "one merchant, one policy" and "one region, one policy," providing customized resource support to distributors, reflecting the importance attached to channel relationships. "True long-termism should be sustained and steadfast, not short-term and speculative." Li Zhilong believes that the entire industry should establish a long-termist mindset, reject quick success and instant benefits, and build a stable and healthy ecosystem across the industry to achieve steady and long-term progress. Giving Back Hunan Sunshine Wine is a local Hunan liquor distribution enterprise established in 2003, registered in Tianxin District, Changsha, mainly engaged in baijiu brand operation and distribution. As an executive vice president unit of the Hunan Provincial Wine Industry Association, the company has long represented well-known baijiu brands such as Wuliangye and Wuling Liquor. It has received industry honors like the "Pioneer Plan," and in 2025, it was selected into the core camp of the China Alcoholic Drinks Circulation Association for standardized brand building. But in the exchange, Li Zhilong always emphasized that what he does is build brands, not sell products; he rarely talks about the company's business model, but more about public welfare education, Hunan spirit, and cultural heritage. "Look, this student got into a key high school this year..." "This head teacher has worked hard to improve the grades of the whole class..." Over the past five years, Sunshine Wine has maintained a paired assistance relationship with Zhaiya School in Jingzhou County, Huaihua, and initiated the "New Hongji Chunlei Public Welfare Fund" to support education, with a total investment of nearly one million yuan. Besides providing teaching equipment such as air conditioners and computers, the company also distributes cotton clothes, grain, oil, and other necessities to extremely poor families, and insists on field visits to ensure precise matching of needs. The fund also established academic incentive mechanisms and teacher honor incentive mechanisms. According to him, the former focuses on rewarding students admitted to key middle schools, giving both material and spiritual rewards to motivate all students to strive upward; the latter focuses on rewarding head teachers with outstanding teaching results, affirming the core role of teachers in improving education quality and student development, and enhancing their professional honor. "At that time, I saw that the students in the mountains were very poor, so I bought cotton clothes, cotton pants, and some oil and rice, and sent them to the students' homes." This is the original intention of Li Zhilong's public welfare education. As recently as January this year, Li Zhilong and his team visited the primary school again to carry out assistance, exchanging with teachers and students, and the fellowship activities lasted until late at night. The author noticed that Li Zhilong persists in the path of public welfare education. His personal benevolent sentiment is the original intention, but it is also to help those in need, and even more for industry development and to cultivate reserve forces for society. The total amount of public welfare donations he has insisted on over the years has reached over 12 million yuan. The liquor merchant's public welfare and love, and his practice, have transcended simple product marketing, shifting toward long-term brand building through social responsibility and cultural value. Five years of public welfare education, Li Zhilong regards public welfare as an important component of brand building, not a short-term PR activity. This sustained investment not only shapes the brand's responsible and long-term social image, but also better serves manufacturers by enhancing brand reputation and social influence. It aligns with the current call for the baijiu industry to "return to the original aspiration," reflecting a strategic path of using social value to feed back into brand value. By exploring cultural value and conveying social care, public welfare education becomes an emotional bond connecting the brand with consumers. This is consistent with his advocacy of "strengthening brand stories and creating deep emotional connections," demonstrating that public welfare helps the brand leap from a commercial symbol to a cultural carrier. "Talent is the most important." When asked about his biggest feeling after decades in the industry, Li Zhilong said frankly that he deeply feels the shortage of professional talent, so he is very willing to invest time, money, and energy in talent cultivation. He hopes to help mountain children change their destiny through education while cultivating a group of excellent future builders and social contributors, forming a sustainable and healthy ecosystem of "receiving help - growing - giving back." Daring to be first, caring for the world, keeping promises and honoring commitments - in the author's view, Li Zhilong is undoubtedly a typical "Hunan merchant," but his business experience is not without "atypical thinking": he does not pursue selling goods to make money, but values brand building; he does not seek short-term profits, but values long-term cultivation; compared to commercial returns, he values how enterprises give back to society... While the industry collectively worries about "how to survive," he focuses more on how to live long and live better. He defines himself not as a product salesman, but as a brand builder. For liquor merchants, this definitional distinction implies different responsibilities: "Making products" means providing functional commodity entities, while "building brands" means constructing a long-term value system based on quality, with culture and emotion at its core, supported by win-win cooperation between manufacturers and distributors, and extended by social responsibility. Only by adhering to quality foundations and cultural values, upgrading from "making products" to "building brands," and promoting a transformation of "returning to the original aspiration," can the liquor industry achieve long-term success and reach its great path. 【Moving Toward the C-End】The 11th China FMCG Conference Time: March 16-18, 2026 Location: Chengdu, China