While Northeast has fertile land, rich brewing raw materials, and sufficient consumer population, why is Northeast Liquor facing huge challenges? The picture is from Oriental IC, this article is from WeChat public account: Economic Observation Network (ID: eeojjgcw) , reporters: Zheng Xinxin and Liu Lan, the original title was “What happened to liquor production in Northeast China that fell 6,000 times in ten years in Liaoning Province? 》
Northeast wine production is declining.
According to media reports, in the first eight months of this year, liquor production in Heilongjiang Province was 76,600 liters, Jilin Province was 23,300 liters, and Liaoning Province was 9,200 liters. The output of wine in the same period was 4.3%, and the total wine production in the three northeastern provinces in 2010 was 1.27 million kiloliters. Some other data also show this trend. According to China Statistics Information Network, Liaoning liquor production in 2007 was 124 million liters, and ten years later, in 2017, the liquor production in Liaoning Province fell to 27,000 tons.
The Northeast Liquor Industry has experienced the highlight moment of leading the industry. As early as 1987, the production of liquor in Heilongjiang Province was 176,000 kiloliters, the output of liquor in Liaoning Province was 160,000 kiloliters, and Jilin Province was somewhere in between.
What happened to Northeast Wine over the years?
A liquor analyst told reporters that the predicament of Northeast liquor is mainly affected by two factors, one is the economic and consumption power of the Northeast region, and the other is the branding and product strategy of Northeast liquor. The upgrading of structural consumption has become the mainstream trend of the industry, coupled with factors such as rising costs, sinking of famous wines, and squeezing competition, the low-end image of Northeast Liquor has become a bottleneck restricting its development and has also limited its pace of nationalization.
Why Northeast Wine Declined
The decline of Northeast Liquor first manifested in the change of liquor production.
Take Liaoning Province as an example. The “Northeast Liquor Report” shows that from 2008, the production of liquor in Liaoning Province exceeded 400,000 kiloliters and reached a peak of 630,000 kiloliters in 2012. Although it was in a decline in 2013 and 2014, it remained basically at 400,000. Around a thousand liters. This scale is almost the same as the current liquor production in Anhui and Guizhou provinces, which are the major liquor production and marketing provinces. In the first eight months of this year, the liquor production in Liaoning Province was only 0.92 million liters. Liaoning’s liquor production has experienced a cliff-like decline, and the situation in Heilongjiang and Jilin provinces is similar.
The reporter asked the old village chief about the changes in liquor production this year, which he did not disclose.
Not only has output declined, sales revenue has also been declining. At the 22nd Northeast Three Provinces Liquor Enterprises Joint Conference, information released by the three provinces of Hei, Ji and Liao revealed that in 2017, there were 68 enterprises above designated size in Heilongjiang Province, 5 fewer than the previous year, accounting for 4.27% of the country; The main business income was 3.964 billion yuan, a year-on-year decrease of 37.88%; the total profit was 256 million yuan, a year-on-year decrease of 17.68%, accounting for 0.70% and 0.25% of the country’s total; the output was 577,900 thousand liters, a year-on-year increase of 7.01%, accounting for the national liquor Yield of 4.82%.
In the 1990s, as the price of famous wines was liberalized and market consumption was rapidly escalating, many wine companies gradually reduced to low-end products when they were first to deploy high-end products. Northeast Liquor aimed at the market of light bottle wine at this time, and vigorously produced and promoted light bottle wine. During this period, many famous Northeast wine brands appeared.
For example, Laolongkou used to be the fourth place in China ’s top ten famous wines, and the second place in the country ’s liquor production in 1992. After 2000, the old village chief and Longjiang Homestead accelerated their nationalization. The main products are low-end prices. Bottle of wine is a glorious moment for Northeast wine.
Around 2000, famous wine companies in Sichuan, Jiangsu and other provinces started high-end strategies, and new generation products such as Yanghe Blue Classic, Guojiao 1573, Shuijingfang, and Shide were launched. However, Northeast wine still chooses to focus on light bottle wine, focusing on consumer segments below 10 yuan.
This strategy has increased the sales of light bottle wine in the Northeast, but it is also considered to have negatively affected its brand, such as missed opportunities for high-end products, and the brand has become a low-end line.
After three years of industry adjustment, the liquor market has rapidly recovered since 2016, especially the high-end market has continued to expand. Famous wine brands such as Maotai, Wuliangye, Yanghe, and Fenjiu have set historic performance peaks. liqueurBut stopped still.
The grain used for winemaking has fertile land, abundant brewing raw materials, and sufficient consumers in the Northeast. Why is Northeast Liquor facing huge challenges?
Northeast China is an important region for grain production in China. A large amount of high-quality red sorghum, wheat, corn, rice and other brewing raw materials are produced every year. However, the high-quality brewing raw materials in the three northeastern provinces are mostly paid by well-known manufacturers such as Maotai and Wuliangye. The purchase is gone, and because the local liquor company in Northeast China is small in scale and pays a low purchase price for raw materials, it can only buy second- and third-grade grain. Liu Jianhua, chief engineer of Beicang Winery in Heilongjiang, once pointed out that the decline in the quality of raw materials for liquor production will directly lead to the decline in liquor quality, which will affect the consumption of liquor. In addition, in the process of liquor production, due to the adherence of process technology to Northeast liquor companies, the waste of raw materials is widespread, which leads to an increase in processing costs and a decrease in profits.
An industry source said that the Northeast is mostly small wineries, and there are relatively few large-scale liquor companies, which makes it difficult for Northeast liquor to invest more in the market than large factories. Northeast liquor has no well-known brands in the liquor industry and lacks market competitiveness. In addition, Northeast Liquor has no representative flavors, such as Luzhou flavor in Sichuan, sauce in Guizhou, fragrance in Shanxi, and Fengxiang in Shaanxi. The lack of flavor in Northeast liquor also leads to its lack of competitiveness.
What to save the Northeast wine
A person in the liquor industry told reporters that as the consumption upgrade trend continues to develop, medium-to-high-end brand liquor will squeeze the living space of low-end liquor to a greater extent. With the expansion, the liquor industry structure and resource concentration will increasingly lean towards high-end liquor products.
The current pattern of the liquor industry presents two or eight laws. From the perspective of brand manufacturers, mid-to-high-end brands occupy the mainstream of the liquor industry and lead the development of the liquor industry. Mid-to-high-end brand liquors represented by Maotai Wuliangye account for 20% of all liquors. The output has contributed 80% of the industry’s profits, so many wineries have sought high-end layout in recent years.
Therefore, he believes that Northeast Liquor needs to undergo industrial upgrading, brand cultivation and product strategy adjustment.
From the perspective of industrial upgrading, he believes that Northeast liquor should be developed in the sub-high-end direction. High-end brand liquors have higher profits but fierce competition. Existing brands in the mid-end liquor market lack consumer loyalty and have relatively Large market technical operation space, new brands are likely to succeed in the mid-range market.
Current northeastThe brand image of wine is stale and lacks cultural power. Liquor and culture are inseparable. Analysts said that Northeast wineries should think about how to use the power of culture to give brands new vitality.
From the aspect of products, the advantage of Northeast wine is light bottle wine, and light bottle wine has ushered in new development opportunities in recent years. The 2017 China White Bottle Wine Marketing White Paper predicts that the current light bottle wine market size is 650. 100 billion yuan, this data is expected to exceed 120 billion yuan in the next 3-5 years. In terms of price, light bottle wine also shows an upgrading trend. For example, the price of Lidu’s terminal in 1955 has exceeded 800 yuan. Light bottle wine is no longer synonymous with low-end and inferior quality, but gradually returns to the level of high-quality consumption.
This article is from WeChat public account: Economic Observation Network (ID: eeojjgcw) , Reporter: Zheng Xinxin and Liu Lan. This content is the exclusive original of the Economic Observer and the copyright of the Economic Observer. Reproduction is prohibited without authorization.