Liquor Market Notes in 2021 | The front wave is drifting away, and the back wave is out of reach
In the past 2021, the sales of liquor has been in a state of continuous popularity, and the good performance of the industry throughout the year has naturally attracted all kinds of capital to continue to increase, with the general environment of consumption upgrading and the rising market, all companies have invariably increased the terminal retail price of products, which also indicates that the liquor industry has begun to collectively enter the era of brand consumption with quality as the core.
Throughout the year, high-end brands take the initiative in the market
Last year's liquor price increase showed three characteristics: wider coverage, higher price increase frequency, and greater single increase, whether it is a first-line and head brand, or a midstream, downstream or regional brand, is the first word, especially when the Spring Festival consumption season is approaching, the price of core products of some first-line brands will be further increased.
For example, Wuliangye, Luzhou Laojiao, Gujing Gongjiu, Xijiu, etc. have recently increased prices, among which the supply price of the planned quota of 52 degrees national cellar 1573 classic (500ml*6) in Luzhou Laojiao was increased by 70 yuan per bottle, the supply price of unplanned quota was adjusted to 1080 yuan per bottle, the group purchase price of Gujing Gongjiu Chinese New Year's Eve 52 degrees and 42 degrees per bottle was adjusted to 1600 yuan and 1400 yuan respectively, and the cellar of Xijiu 1988, The prices of each bottle of Jun Pinxi Wine and Xi Jiu Beast Head were increased by 50 yuan, 100 yuan and 200 yuan respectively.
Saving the pre-price can not only further enhance the comprehensive efficiency of the enterprise, but also promote the distribution or distributors of the sales channel link to stock up in advance, which can also seize the capital and circulation channels first, and this price increase often produces a linkage effect between well-known brands, and major leading enterprises will follow up to maintain the brand image and sales channels of the enterprise.
It is worth mentioning that this year's festival price is not limited to high-end brands, many regional liquor brands have also joined the price war, such as Shunxin Agriculture's century-old Niulanshan Fu Niu, Xi Niu, Guoxiu three products each bottle price increased by 20 yuan, 30 yuan, 50 yuan respectively, Shede wine industry's taste willing (collection) and wisdom willing (collection) The factory price per bottle was increased by 30 yuan and 50 yuan respectively, and the Qinghua Zui, pure (alcohol) and storage series of Guyue Longshan were also increased by 5% to 20% respectively.
Regional liquor brands mainly adjust prices around their high-end or quasi-high-end series of products, and the purpose of price adjustment is to offset the impact of labor costs and rising raw material prices, such as the price adjustment announcement of Guyue Longshan, the average gross profit margin of the company's fruit wine, relief, champion red and other series is less than 30%.
Second, it is similar to the strategy adopted by first-line well-known brands, but the difference between the two is that the products of first-line well-known brands are relatively scarce, and price increases are more acceptable to the market, while regional or midstream brands are more substitutable in the market, and there are more unpredictable factors after price adjustment.
The head enterprises are stronger, and the high-end strategy continues to deepen
After experiencing the rapid development of the liquor industry at the end of the last century and the beginning of this century, the current production capacity is already relatively excessive, specifically manifested in the overall capacity oversupply, while high-quality production capacity is in short supply, under the premise of accelerating the dual circulation and new consumption upgrading in China, the annual output of high-end brands is still difficult to meet the expanding consumer demand of middle-income groups.
Under the background of the continuous improvement of market consumption power, the dominance of alcohol consumption in the future will inevitably continue to be concentrated in the head well-known brands, so such enterprises will have stronger channel pricing power and bargaining power in the future.
On the one hand, enterprises can further promote brand value and strengthen the high-end image of the brand by gradually increasing the price, on the other hand, enterprises can also optimize the structural composition of their different grades of products, and accelerate the seizure of the most important price range and segment in the sales node.
At present, first-line brands have built brand barriers with the help of high-end liquor, and are fully enjoying stable market dividends, Feitian Moutai, Puwu, Guojiao 1573, Yanghe Blue Classic and other brand series have firmly occupied the C position in the high-end market.
According to Moutai's recent announcement, the company is expected to achieve a total operating income of about 109 billion yuan last year, a year-on-year increase of about 11.2%, and is expected to achieve a net profit attributable to shareholders of listed companies of about 52 billion yuan, a year-on-year increase of about 11.3%.
Although Wuliangye has not yet announced last year's results, its revenue in the first three quarters has been close to 50 billion yuan, according to this estimate of the annual more than 60 billion yuan is undoubted, the net profit attributable to shareholders of listed companies in the first three quarters of last year was more than 17 billion yuan, a year-on-year increase of about 19.13%, the performance of these two enterprises is far ahead of other enterprises, whether in the entire liquor industry, or in the field of sauce aroma or strong aroma liquor, they are a well-deserved leading force.
High-end liquor user groups and supply and demand relationship is relatively stable, its price increase even if transmitted to the demand side, will soon be accepted and digested by the market, because the current market mainstream consumer groups more identify with the brand value, so the profitability and market competitiveness of well-known brands will inevitably further strengthen, while the price increase of high-end liquor also brings the price upgrade space to the middle and downstream brands, which means that the competition in the sub-high-end or low-end liquor market will inevitably become more and more intense.
While the price is rising, the overall production capacity of the liquor industry is still shrinking, which shows that the market concentration of the liquor industry is still further improving, and the total revenue of the 19 liquor companies listed in the first half of last year exceeded 150 billion yuan, of which the top five enterprises (Kweichow Moutai, Yibin Wuliangye, Yanghe Shares, Shanxi Fenjiu and Luzhou Laojiao) had a total revenue of more than 120 billion yuan, accounting for about 80% of the revenue.
At the same time, the differentiation within the liquor industry is still further intensifying, which also reflects that the profit growth of enterprises mainly comes from the rise in prices and the adjustment of product structure, rather than simply generating revenue by volume as in the past.
Industry fragmentation will intensify, with the focus of competition on the sub-high-end market
Last year's performance of various enterprises is generally good, most of the head enterprises overall performance compared with previous years increased significantly, from the first half of the half-year report, 18 of the 19 listed liquor companies achieved revenue growth, 16 achieved net profit growth.
Last year, the impact of the epidemic on the liquor industry was relatively limited, and after the epidemic eased or lifted in some areas, the overall sales of liquor soon began to gradually pick up, such as the performance of willing and alcoholic liquor are far beyond the pre-epidemic level, driven by multiple factors such as good performance and price pull, the index of the liquor sector last year was also generally rising all the way and repeatedly hitting new highs.
From the revenue ranking, other companies are far from Mao Wu compared with each other, especially in the 30-50 billion sales range is a complete blank, until the 20 billion revenue range, there are Yanghe shares, Shanxi Fenjiu and Luzhou Laojiao three second square enterprises, these three companies last year's revenue of 24.5 billion, 21 billion and 20 billion respectively, the difference between each other's strength is not large.
In the first three quarters of last year, the revenue of Yanghe shares, Shanxi Fenjiu and Luzhou Laojiao increased by 16.01%, 166.24% and 21.65% year-on-year, respectively, and the net profit growth rate was 0.37%, 95.13% and 30.32%, respectively, which shows that the position of Yanghe shares is not firmly seated, and the competition for the third place in the industry is also one of the highlights in the following years, because it not only reflects the comprehensive competitiveness of the enterprise, but also determines the scale and space for the upward development of subsequent enterprises.
Yu Jian column" believes that for this year's liquor market, there are several highlights for investors to focus on:
First, the position of the head enterprise is relatively stable, and the tens of billions of revenue range will be the most competitive area in the industry, and many powerful enterprises want to go further and achieve the goal of squeezing into the second square of the liquor industry.
Therefore, the adjustment and change of the competition pattern in this range in the next few years will be the main focus of the liquor industry, but the enterprises in this range will continue to face the huge pressure brought by the sinking strategy of the head enterprise brand, such as Kweichow Moutai's sauce series in different price segments, which has intensified the fierce competition between brands in this range.
Second, on the basis of continuing to dynamically clear zero, the country will definitely introduce more epidemic prevention measures and protective measures this year, so the domestic epidemic prevention and control effect this year will definitely be more stable than in previous years, which will inevitably be a sustainable benefit to the overall consumption of society, including the liquor industry, especially the first-line and head brands will benefit more.
Therefore, the Matthew effect of the liquor industry this year will be more obvious, the differentiation between first-line brands and other brands will intensify, the strong are stronger and the weak are weaker, and the first-line and head brands will further widen the gap with the middle and downstream brands in terms of volume, revenue and profit growth.
Third, in addition to traditional distribution or e-commerce channels, all companies are now striving to build their own offline communities or group buying channels, such as the coverage of Wuliangye Group's group buying channels reached about 20% in the first half of last year, and the overall plan for the whole year is to reach 30%, and the repurchase rate of the 6,000 group buying units established in 2020 has reached 90%, and many group buying teams last year have completed the target tasks of the year ahead of schedule.
It can be seen that in the case of the gradual saturation of the distribution market, the emerging group buying channel on the sales performance of the enterprise is still more obvious, the group buying channel has also become one of the main tracks of the current competition, the transformation of the old brand in this regard is generally not as strong as the emerging brand, the latter by constantly adjusting the business model and marketing ideas, in the region to the former brought certain competitive pressure.
Fourth, the capital's attention to the liquor industry has always been relatively high, but after last year's swarming, ups and downs, this year's capital investment will inevitably return to calm, usually capital prefers powerful first-line head brands or emerging brands with great development prospects, such as Baoyu Famous Wine, which has obtained 1 billion yuan of financing, has been working hard to promote the construction of 100 sauce pubs distributed throughout the country last year, and plans to expand to the scale of thousands of stores next year.
With the help of COFCO Group, Drunkard Liquor accelerated the layout of domestic sales resources and channel networks, cultivated a number of 100 million yuan market, and laid a solid foundation for the rapid growth of enterprise performance, in the first half of last year, the revenue of Drunkard Liquor increased by 137.31% year-on-year, and the net profit increased by 176.55% year-on-year.
Even if it integrates various online and offline marketing models and means, the liquor industry is still a traditional industry on the whole, and the larger the scale and volume of the enterprise, the more it can seize the lead with brand appeal in competition.
In addition, the current industry is in the adjustment stage of shrinking production capacity, increasing prices, and strong quality, and the revenue range of tens of billions can also be regarded as a watershed of enterprise strength and weakness, entering this camp means that enterprises have the possibility of further upward development in the second echelon, so the first-line and head brands will continue to strengthen brand potential, and strive to form a stronger scale advantage in high-end and sub-high-end fields, and the strength differentiation between enterprises will further intensify in the next few years.