(Report Producer/Analyst: Guosheng Securities Fu Rong Yang Chuanxin)
1. Huijiu Market: The second high-end scenery in the province is unique
1.1 Liquor production and sales province, strong consumption atmosphere
Anhui Province has always been an important liquor market, not only a large production province, but also a large consumption province. There are about 550 liquor enterprises in the province, including 112 enterprises above designated size, ranking the forefront in the country in terms of quantity.
We estimate that the current factory volume of the liquor market in Anhui Province is around 35 billion yuan. There are good liquor consumption habits in the province, with high consumption frequency and many scenes.
Sub-high end below price band fierce competition.
The Anhui market has relatively stable competition in the price range above RMB 300. We estimate that Moutai and Wuliangye each account for about RMB 1.5 billion, dividing up the high-end and ultra-high-end markets. Although Guojiao has maintained rapid growth in recent years, However, there are still some differences in size.
300-600 yuan sub-high-end price band continues to expand, it is still in the blue ocean market, and the provincial brand Zhonggu has rapidly increased volume after the 20th epidemic. Currently, it has a dominant price at this price, and the foreign brand Zhongyang Hemeng series And Jiannanchun have a share.
Anhui wine competition focuses on the price band below 300 yuan, including the old Gujing tribute wine , Kouzijiao, Yingjia tribute wine , as well as Blast Furnace, Golden Seed series, etc.In addition, there are some brands with greater influence in the local market, such as Wanjiu series, Xuanjiu series, etc.
1.2 Anhui liquor market is undergoing a new round of consumption upgrade
The volume is decreasing and the price is increasing.
Since 2018, the Anhui market has seen an obvious trend of upgrading sales, with the overall trend of decreasing volume and increasing prices. From the perspective of output, the output of liquor in Anhui Province has begun to decline since 2018, but according to our estimates, the liquor market in Anhui Province still maintains stable growth , the average price increased steadily.
At the same time, the current mainstream consumer price band in the Hefei market is already around 300-400 yuan, and national famous wines are sprinting to the core opinion leaders around the price of 500 yuan. , Guotai, Qinghualang and other sauce wines have a clear upward momentum, and they have launched an impact on the high-end market above 600 yuan.
Under this trend, Anhui real estate wines have launched major single products with a positioning of 500 yuan or higher, and the core price band above 500 yuan.
The ancient 20 is the first to get rid of the competition in the Red Sea.
In 2018, on the occasion of the tenth anniversary of the listing of the original pulp of Gujing Gongjiu in Hefei, the company launched a strategic new product, Gu 20, targeting the price band of around 500 yuan. Gu 20 focuses on the operation of the group buying market, the expense budget is accounted for separately, the quota system is adopted for dealers, and the low-priced swindling behavior is strictly controlled. Once launched, Gu 20 sold well and maintained rapid growth.
For Huijiu brands, about 200 yuan is the survival line, about 300 yuan is the competition line, and more than 500 yuan is the development line, so with the ancient 20 standing firmly in the 500 yuan price band, Gujing_ span3span took the lead in getting rid of the price band of less than 300 yuan in the Red Sea competition, and its dominant position in the province continued to be stable.
Kouzijiao launched "Jianxiang 518" with a price band of 500 yuan.
On May 18th, the new Kouzijiao strategic new product "Kouzijiao Jianxiang 518" was launched in Huaibei, the product specification is 518ml/bottle, the alcohol content is 51.8%, the VIP group purchase price is 518 yuan, and the card ranks second in the high-end core price band.
At present, the new products of Kouzijiao are only introduced in the Anhui market. In the early stage, the existing dealer system of Kouzijiao was mainly used. We believe that the new products of Kouzijiao are expected to fill the price gap between Kouzijiao and 20 years, and further improve the products of Kouzijiao. The stepped layout will help the company to restore its market share in the province.
2. The reform of Kouzi cellar is accelerating, and the results are expected to emerge one after another.
2.1 Brand side: The production capacity has been released to lay a solid foundation, and the investment in brand promotion has been increased
Kouzi wine has a long history, profound heritage and strong brand power.
The history of mouth wine can be traced back to more than 2700 years ago. In modern times, in 1931 and 1934, Kouzijiu participated in the exhibition of local products along the railway line held in Qingdao and Beijing twice, and both won the "Class A Famous Wine" certificate.
In 1959, "Suixikouzi wine" entered the state banquet wine sequence.
1972-1975: In the evaluation of high-quality wines of brewing enterprises in the province for four consecutive years, the Kouzi wine produced by Huaibei City Winery was rated as the first high-quality wine, and the Kouzi wine produced by Suixi County Winery was rated as the No. three. As a representative of domestic flavor-oriented liquor, Kouzijiao has a high degree of recognition among consumers in the province and a stable market position.
The production capacity will be released one after another, consolidating the foundation for growth.
In 2019, the company started the construction of the first phase of Dongshan. It plans to produce 18,000 tons of original wine, 100,000 tons of wine storage, and 60,000 tons of finished wine packaging capacity. In 2020, it will build the second phase of the industrial park with self-raised funds of 1.36 billion yuan , the project includes three major processes: koji making, winemaking and storage, and will continue to add 20,000 tons of original wine production capacity.
According to Jiushihui, the first phase of the company's Dongshan project has been basically completed, and it is expected to be put into operation to contribute to production capacity. It is expected to reach full production this year. The second phase is under construction.
The fragrance of wine is also afraid of deep alleys, so increase the cost of brand promotion.
Before 2019, the company relied on the scale effect and large-scale commercial system brought by excellent product quality, and the cost of manufacturers was relatively weak. After 2019, the company faced competition from competing products in the province and its own new products. To meet the needs of promotion, we began to strengthen public relations work and marketing efforts, and intensified brand promotion and advertising. The company participated in the "brand power project" of China Central Radio and Television Station, strengthened the image of "real possessions, real cellars, great powers and incense", and carried out a full range of products. "Upgrading quality again" highlights the ultimate pursuit of quality.
Rationally look at the impact of sales expense ratio on profitability.
The increased spending on brand promotion of Kouzijiao may have an impact on profitability. However, we believe that Kouzijiao has a profound brand heritage in the province and a good consumer base. It is far less difficult to regain brand recognition than to build a brand new brand. At the same time, Kouzijiao has a complete business system, which is also under the background of the company's refined management channels. It is expected to bear part of the ground promotion costs,Therefore, we expect that the extent and duration of the impact of the expense side on the company's overall profitability will be controllable.
2.2 Product side: Launched "Jianxiang 518", focusing on the sub-high-end price band The speed is weaker than that of Gujing.
The company originally built a product system with the main line of the year. 5 years, 6 years, 10 years, and 20 years were compared to the original pulp series of Gujing. According to channel research, it is estimated that the company's 5-year and 6-year products in 2020. The revenue scale accounts for about 50%, and the 10-year revenue scale accounts for about 15%. Compared with the rapid growth of Gujing Gu 16 and Gu 20 products in recent years, the overall volume is weak.
10 years/20 years of Kouzi began to speed up, driving the improvement of product structure.
The company's main products in the sub-high-end price band have a 10-year/20-year product. Due to the problem of resource focus in the past, the product has not been well positioned in the price band of consumption upgrades in the province. The relative performance of sub-high-end competing products such as Gujing and better than the company.
In recent years, the company has strengthened the 10-year/20-year assessment of the mouth, and the mouth has recovered to a relatively fast growth rate in the 10-year/20 year. At the same time, for the proportion of Gujinggu 8 and above products, we believe that there is still room for improvement in the 10-year/20-year proportion.
The company began to carry out changes in the product system in 2019.
In August 2019, the company launched two tactical products, Early Summer Treasure and Mid-Autumn Treasure, priced at 268 yuan/350 yuan for competing products; Start testing the high-end price band; May 18, 2021,The company launched a strategic single product "Jianxiang 518". The name of "Jianxiang 518" originated from the establishment of Kouzi Liquor Industry on May 18, 1949, digital homonym "I want to send", capacity 518ml, The alcohol content is 51.8 degrees. It is specially brewed by a century-old cellar pool when the factory was built. The group purchase price is 518 yuan, which is dislocated from Gu 20 and Dong 20, and officially participates in the competition of the sub-high-end consumption upgrade price band.
The operation idea of Jianxiang 518: focus on cultivating resources, and rapidly increase the volume of group buying channels.
"Jianxiang 518" is a strategic item of the company. The company focuses on resources and actively cultivates it. In terms of high-altitude advertising, the current Hefei Airport, outdoor advertising, etc. are replaced by Jianxiang 518. The company sponsored "Shining Anhui" and golf team competitions, etc. In all activities, Jianxiang 518 is the focus of publicity. In terms of ground channels, Jianxiang 518 is mainly introduced into the group purchase channel, and only selected boutique hotels are selected for introduction, and the profit of the dealer is more than 60 yuan.
At the same time, the company also uses group buying dealers to carry out circle-level marketing , and actively holds tasting meetings and Kouzijiao Cup golf tournaments to cultivate core consumers, and cultivate a consumption atmosphere with points and surfaces.
"Jianxiang 518" space: It is expected to become a large single product with a value of more than 100 million yuan.
Comparing the operation ideas of Jianxiang 518 and Gu 20, "Jianxiang 518" and Gu 20 have strong similarities, focusing on the sub-high-end price band, adopting the national first-line famous wine control master plan, and maintaining a balanced volume and price. In this way, it is expected to rapidly increase the volume in the provincial market.
Currently, according to channel feedback, "Jianxiang 518" is selling well in Anqing, Wuhu, Huaibei, Chuzhou and other markets.Strong sales.
According to the survey and calculation of the Jiushihui official account, the market capacity of sub-high-end products of 400-800 yuan in the Anhui market exceeds 3 billion, which is in the stage of rapid expansion, and the competition is still in the blue ocean. Only Gujinggong, Kouzijiao and some brands outside the province have Layout, referring to the growth path of Su wine market Yanghe, Jinshiyuan sub-high-end products Dream 6+ and Guoyuan series, it is expected that Jianxiang 518 is expected to continue the development trend of ancient 20 and become a billionaire Large items over $100.
2.3 Channel side: actively reform the channel system and mobilize the enthusiasm of distributors
The company has adopted the "big business system" model in history, and implemented the "one place, one policy" market operation idea.
The company deploys the market in a regional exclusive general distribution model, implements sub-regional and sub-category management, and usually selects a general distributor in a city that meets the local market characteristics to represent a category.
dealers have regional exclusive rights to avoid competition between dealers in the same region and behaviors that disrupt the price system, such as selling goods.
The distributor is responsible for the extension and expansion of the channel. The Kouzijiao Company only pays the expenses of the promotion staff and assistance, and at the same time requires the distributor to "specialize the brand", unless it is a product that is different from the Kouzijiao market positioning.
has established long-term and stable cooperative relations with large distributors.
In recent years, there have also been certain problems in the large-scale business model, and the game and internal friction between manufacturers have intensified.
Specifically:
1) Dealers are less motivated to push new products.
Due to the company's mature and large single product 5 years/6 years giving strong profitability,The dynamic sales are stable, and the ROE of Kouzijiao dealers is higher than that of Gujing dealers every year. Therefore, under the model, the company's dealers are more lazy to push new products and push high-end products, resulting in the company's product structure improvement rate is weaker than the competition in the province product;
2) The strength of the dealer's expenses is weakened.
As the company adopts a large-scale business system, leading the channel strategy, and is also responsible for terminal management and most of the costs, after the products are relatively mature, the willingness and intensity of large-scale brand and market maintenance expenses have weakened, and there may even be large-scale business reasons. Short-sighted and withholding market costs, and even maliciously extracting the costs invested by manufacturers.
After 2019, the company has carried out reforms on channels. The channel side has more refined management of dealers, strengthened dealer assessment, recruited a large number of new dealers for group purchases, and comprehensively promoted the construction of effective outlets, aiming to stimulate the enthusiasm of dealers at multiple levels and in all aspects. .
Specifically,
1) Distributor channels: The company adjusts and optimizes the original distributor system to adapt to the current marketing model, recruits a large number of new group-buying and special distributors, and is independent of new products Operation and separate assessment to make up for the shortcomings of the original dealers. At the same time, the survival of the fittest will be implemented for the existing dealers, the operation will be divided into products and channels, and the non-standard and inaction dealers will be cleaned up.
2) In terms of market layout: The company has built a 3-level market system in the province, which develops gradually. In the Huaibei market, the base camp, the company proposes omni-channel coverage and assesses the sales of dealers in 20 years and 20 years. For prefecture-level cities with relatively good consumption levels such as Anqing, Maanshan, the company mainly focuses on 518, 10, and 20 years of products. , focusing on investment in publicity and publicity, targeting the core consumer groups, and targeting the remaining prefecture-level cities, the company adopts the strategy of steady reform of large businesses.
At the same time, companies outside the province focus on the provincial capital market, focusing on group purchase channels in 2-3 tier cities.
3) Organizational structure: The company recruits talents locally in key markets,And match the local salary level, so as to better attract excellent marketing talents.
The company introduced an information system to accurately track the terminal service situation of the salesman. At the same time, for high-priced products such as 20-year-old, 30-year-old, and Kenxiang 518, special promotion incentives were given to sales personnel, and the enthusiasm of sales personnel was greatly improved.
In addition, the company will issue an announcement in 2020 to repurchase shares for core backbone incentives. At present, the company has repurchased 3.13 million shares. In the future, with the completion of the company's personnel adjustment, the equity incentive is expected to be successfully implemented.
3. Risk warning
The promotion of new products is lower than expected; the progress of channel reform is lower than expected; the survey data may have errors.
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