Soy wine is still a good business

Recently, China Resources Beer (Holdings) Co.
, Ltd.
announced that its indirect wholly-owned subsidiary, China Resources Liquor Industry Holdings, will acquire 55.
19% of the equity of Guizhou Jinshajiao Wine Industry Co.
, Ltd.
for a total price of
12.
3 billion yuan.
This "booze drink" has attracted much attention because of the huge amount, and its two-way empowerment model of "beer and white" is also widely optimistic
about the industry.

On the same day, Shede Wine Co.
, Ltd.
and Renhuai Maotai Town Yelang Ancient Wine Industry Co.
, Ltd.
established a joint venture company, Guizhou Yelang Ancient Winery Co.
, Ltd.
, the legal representative is Wu Yifei
, Fosun Global Partner, Chairman and CEO of Fuyu Wine Group, and Chairman of Sichuan Tuopai Shede Group.
This investment also marks Fosun's official entry into the sauce wine track
.

"The purpose of China Resources Beer and Fosun is very clear - to target the front-line enterprises of soy wine, make full use of high-quality soy wine resources, and strengthen the soy wine and even liquor sector
.
" Industry insiders said that the era of making quick money has passed, speculative capital is ebbing, but long-term capital is optimistic about soy wine for a long time, and soy wine is still a good business
overall.

China Resources Beer "Beer Dyeing Sauce"

The acquisition of Jinsha Liquor for 12.
3 billion yuan is not the first time that China Resources Beer has "dyed white"
.
As a leading domestic beer company, CR Beer has been striving to seek potential business development opportunities to diversify
its alcoholic beverage portfolio and revenue sources.
The acquisition of more than 55% of Jinsha Liquor's stake is also based on this starting point
.

Data show that in 2021, the market size of China's liquor industry is about 630 billion yuan, of which the sauce wine industry accounts for 31.
5%, and the market size is about 190 billion yuan
.
From 2015 to 2021, the soy wine industry achieved a compound annual growth rate
of 17.
3%.
In terms of growth rate, the growth rate of the sauce wine industry is about twice the growth rate of the
liquor industry.
In addition, soy wine also has high profitability, data shows that in 2021, the weighted average gross profit margin and net profit margin of soy wine companies reached 82% and 41%,
respectively.
Based on such data facts, China Resources Beer believes that soy wine has the ability to
cross the consumption cycle and generate long-term profit returns.

Why did China Resources Beer choose Jinsha Wine this time?

Industry insiders said that the reason why China Resources Beer acquired Jinsha Wine should be based on its unique brand story, high production capacity, strong brewing capacity and relatively complete marketing system, which constitute the ecological value
of Jinsha Wine in the field of sauce wine.
Xiao Zhuqing, a liquor marketing expert, also believes that China Resources Beer chose Jinsha Wine Industry because it not only has a leading soy wine production capacity, but also has begun to take shape in the national sales network layout, especially the high-end brand summary of Jinsha Wine Industry has formed a good consumer experience perception in the minds of consumers.

"CR Beer currently needs to expand new growth tracks and paths
.
" Cai Xuefei, an analyst in the liquor industry, said that sauce wine is a high-premium category in the wine industry, and Jinsha wine industry is an old famous wine, located in the core production area of soy wine, which has achieved a nationwide layout, and the two sides can achieve complementary
advantages and resources.

It can be said that Jinsha Wine Industry meets all the imagination of China Resources Beer on the current layout of the
liquor track.
As Hou Xiaohai, CEO of China Resources Beer (Holdings) Co.
, Ltd.
, said, "Jinsha Liquor is a backbone enterprise in baijiu, a soy wine enterprise on the banks of the Chishui River, and one of the six golden flowers of Guizhou's soy wine.

Fosun "drinks" again

The long-rumored cooperation between Fosun and Yelanggu has entered a substantive stage, which is another representative event
of "capital adhering to the long-term determination to firmly deploy soy wine" in addition to China Resources Beer's announcement of its control in Jinsha Liquor.

According to the industrial and commercial registration information from the national enterprise credit information system, in Guizhou Yelanggu Winery Co.
, Ltd.
, Shede Liquor holds 78.
95% of the shares, making it the largest shareholder, while Yelang Ancient Liquor accounts for 21.
05%.

This time, "holding hands" with Yelang Ancient Wine Industry through Shede Wine Industry is the first time that Fosun has directly deployed a wine company
with soy wine as its main business.

"The combination of Shede Wine, Fosun and Yelang Ancient Wine Industry is a match made in heaven", Quan Tu, a senior soy wine expert, commented on the "marriage"
between Shede Wine Industry and Yelang Ancient Wine Industry.
In Quan Tu's view, Fosun is a very standard industrial giant, but also an excellent industrial capital, in the wine industry has a grand strategic layout, in the face of the "diamond track" of soy wine, will definitely choose to enter, and Yelang ancient wine industry is obviously a good breakthrough
.
Fosun will promote the strategy of laying out soy wine through Yelang Ancient Winery, and Yelang Ancient Wine Industry will also use
Fosun and Shede Wine to rush to the head track of soy wine.

When talking about why he chose Yelang Ancient Liquor, Quan Tu believes that Fosun obviously has its own considerations
.
"Under the leadership of Chairman Yu Fangqiang, Yelang Ancient Wine Industry has stood out from many wine companies in Renhuai through decades of hard work and has become one of the top ten Renhuai sauce wine enterprises.

At the same time, Yelang Ancient Wine Industry has also completed the transformation from a base wine enterprise to a brand operation enterprise, which has a certain foundation in terms of scale, quality, production capacity, team building, etc.
, and is a potential stock
in the sauce wine industry.
”

"Another important reason is that Yelang Ancient Wine Industry is located in the core production area of soy wine in Moutai Town and has a strong historical heritage
.
" So says industry
insiders.

The entry of Fosun and Shede Wine will bring management and talent, marketing, business nationalization and other empowerment to Yelang Ancient Wine Industry
.
"Shede Liquor and Fosun can help Yelanggu lay a solid foundation, realize the transformation from Renhuai famous wine to national famous wine, and accelerate the promotion to the head track
of soy wine.
" From the perspective of the Fosun wine sector, this joint venture company can quickly expand its layout
in the sauce wine industry.
Industry insiders said that this move is an important move of Fosun to deepen the layout of the wine industry, and the operation of sauce wine is operated by the model of a joint venture company established by Shede Liquor and Yelang Ancient Liquor, which is in line with the established strategic layout
of the three parties.

Capital looks to high-quality enterprises

Whether it is China Resources Beer entering Jinsha Wine Industry with 12.
3 billion yuan, or Shede Wine Industry and Fosun joining hands with Yelang Ancient Liquor to establish a joint venture, it shows that China Resources Beer, Fosun and other giants are unanimously optimistic about the future development of
the sauce wine industry.

Last year, the soy wine industry began to cool down
.
The early "sauce wine fever" has led to the emergence of a large number of soy wine brands in the market, which has not only caused an increase in channel inventory, but also caused problems
for consumers' choices.
The current reduction of heat and return to rationality is a good time to start healthy development, marking that the era of lying down can make money
.
"The market share of soy wine is still very small, the future market space is still very large, and the industry still has good development opportunities
.
" Industry insiders said that the second half of soy wine must be an all-round competition of quality, brand and channel, and only enterprises with good quality, good brand, good channel and good model can be competitive
.

"Since the second half of last year, emerging soy wine companies have begun to focus on the quality
behind the growth.
At present, investment demand is shifting to real consumer demand, which is a good thing, and the overall volatility of the industry will decrease
.
In addition, the current lack of consumption scenarios caused by the epidemic is determined by the general environment rather than the problem of the company's operating model, so the sauce industry is currently in the stage
of risk release.
"Industry insiders said that in recent years, a lot of capital has tried to promote revenue expansion through short-term large capital investment, which is no problem if it is placed when the industry prosperity continues to rise, but now it may seem more and more difficult, because the advantages of head enterprises are gradually expanding, and the current consumer circle is slowly solidifying
.
" This transformation is actually conducive to the high-quality development of the industry, and 'good things' will always have capital attention
.
" Sauce wine is a good business as a whole, as long as this business model is still there, the capital layout will only arrive late and will not be
absent.
”

It can be seen that capital and soy wine are forming a more reasonable cooperative relationship, and the sauce wine craze may have another explanation besides "Moutai fever" - after the big wave of sand, high-quality soy wine may set off another wave of
heat.
Industry insiders said that both the liquor industry and the sauce wine industry, driven by this round of adjustment, have accelerated into the era
of head competition.
The so-called "head" is to be leading in all aspects, which has an important premise, that is, it requires a lot of capital blessing
.
In recent years, cases of high-quality large capital entering the sauce are common, and at present, the addition of these high-quality capitals has brought important impetus
to the development of the sauce wine brand without exception.
"It is an inevitable trend for the soy wine industry to return to rational development, and high-quality soy wine may achieve blowout and high-quality development
through capital.
" So says industry
insiders.

(Gu Yufei comprehensive arrangement)

China Food News (October 31, 2022, Version 04)

(Editor: Gu Yufei).