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as the traditional peak season for liquor sales, the liquor sales during this year's mid-autumn festival did not meet market expectations. liquor merchants in many places reported that the order volume was lower than in previous years, forming a consensus that the "peak season is not prosperous."

judging from the sales of liquor during the mid-autumn festival in recent years, the effect of the mid-autumn festival peak season is becoming less and less obvious. some analysts pointed out that under this trend, it is difficult to exceed expectations in demand.

as the sales of liquor during the mid-autumn festival are expected to be lower than expected, many liquor stocks have continued to fluctuate and fall recently, and have continuously refreshed new lows. yu jiaqi, chief analyst of food and beverage at china merchants securities, said that the expectations for liquor are already sufficiently pessimistic. if the liquor can withstand the stress test during the mid-autumn festival and national day (the price system is smoothly implemented), the stock price is expected to reverse.

many liquor stocks hit new lows

as the market has continued to fluctuate and fall recently, the decline in liquor stocks has been more obvious.

on september 12, liquor stocks such as gujing gongjiu, kweichow moutai, and shanxi fenjiu fell by more than 3%, while luzhou laojiao, jinshiyuan, shuijingfang and many other stocks fell by more than 2%. it is worth noting that with the recent continuous decline in liquor stock prices, many liquor stocks such as gujing gongjiu, kweichow moutai, shanxi fenjiu, and luzhou laojiao have hit new lows.

kweichow moutai stock price chart

shanxi fenjiu stock price chart

gujing gongjiu stock price chart

yanghe shares stock price chart

the continued decline in the share prices of listed wine companies is partly due to the pessimistic sales during the two festivals, but mainly due to insufficient expectations. according to china merchants securities' survey and channel feedback, the industry and capital markets are generally pessimistic about the mid-autumn festival. this year, the supply side has already diverged, and high-end and mid-high-end launches are more cautious than last year.

in an interview with a securities times reporter, jin yufeng, director and executive partner of zhongyuan fund, pointed out that from the current situation, the destocking of the liquor industry has not yet ended, terminal sales are still sluggish, and liquor consumption in the ready-to-drink scene continues to decline. regarding the consumption of alcohol during the mid-autumn festival and national day this year, he predicts that it may still show the characteristics of "not prosperous during the peak season".

xiao zhuqing, an independent commentator of the chinese wine industry, also predicted that the high-end liquor will be de-bubbled during the mid-autumn festival, and mass-market liquors above 200 yuan will need the support of brand social face attributes and psychological price expectations based on social cognition. with the sinking and dimensionality reduction of first-tier famous liquor channels, the survival space of regional wine companies will be further compressed. in order to seize the consumption during the mid-autumn festival, major wineries have introduced channel promotion policies. the rising promotion policies of major wineries may offset the promotion effect, and the inverted price phenomenon in the liquor market after the mid-autumn festival may intensify.

specifically, the current structural differentiation of the liquor industry is quite obvious, that is, the overall performance of high-end liquor is in line with expectations, the demand for sub-high-end liquor is under obvious pressure, and the cost-effective consumption of regional liquor has increased. china merchants securities believes that among high-end liquors, moutai and wuliangye still reflect the rigid demand attributes in their respective price ranges. although the overall demand in the industry is weak, the brand status has brought about further concentration of market share. in the sub-high-end sector, due to the decline in banquets and the contraction of corporate budgets, the price of sub-high-end liquor has fallen and sales have slowed down, and the pressure on demand is more obvious.

pursuing high cost-performance ratio becomes a new consumption trend

in recent years, with the changes in market consumption patterns, the pursuit of high cost-performance has become a new consumption trend. in line with this change, consumers in the liquor market are increasingly pursuing cost-performance and quality-price ratio.

according to the "2024 china liquor market mid-term research report" released by the china alcoholic drinks association, in the first half of 2024, liquor market distributors and retailers reported that the top three price ranges with the best market sales were 300-500 yuan, 100-300 yuan, and 100 yuan and below; the top three price ranges with the highest degree of inversion were 800-1,500 yuan, 500-800 yuan, and 300-500 yuan.

some liquor companies have noticed the decline in liquor prices and are actively developing products of different levels, and the market has also responded positively. in april 2023, moutai launched its first 100-yuan priced sauce liquor "taiyuan", priced at 156 yuan per bottle, and its sales performance that year exceeded 1 billion yuan. in june 2023, guizhou xijiu launched a new product in the 100-yuan price range, yuanxijiu, which is positioned as a popular sauce liquor with a simple packaging design, exquisite and not virtual, and a suggested retail price of 188 yuan.

song shuyu, chairman of the china alcoholic drinks association, said that under the background of diversified changes, as one of the main driving forces of the consumer market, the industrial structure of alcohol has undergone profound changes. as alcohol consumption enters the era of "consumption rationality + price rationality", consumption concepts and behaviors are also changing, and consumers are increasingly inclined to rational consumption.

in his view, rational consumption is an inevitable phenomenon caused by changes in economic structure and population iteration effects. it is also a sign of consumers' growing maturity and the rational mentality of consumers who want to buy higher quality products at reasonable prices.

the main contradiction in the current liquor sector investment is the rebalancing of supply and demand and the reconstruction of industry growth expectations. guotai junan's research viewpoint said that the market is more concerned about the development of destocking and the new equilibrium of high-end liquor wholesale prices. the subsequent sales performance of core products will match the apparent growth rate. the wholesale prices of high-end liquors such as moutai will reach a new steady state after the peak season, which will support the valuation of the sector.

guotai junan said that it is urgent for companies to make choices about their business strategy directions. except for a few brands such as moutai, the companies that are less obsessed with price and product structure will have competitive advantages in the future. companies need to establish a share strategy that suits them according to local conditions and observe the strategic flexibility of the companies.