Bottom line: Wuliangye’s new tie-up with Brown-Forman continues its drive to diversify and create new products for younger consumers, which could help it emerge as a leader when liquor makers emerge from their current downturn.
Brown-Forman links with Wuliangye
It’s not often that I get to write about foreign company involvement in China’s traditional liquor industry, which is largely closed to overseas investment and is also quite fragmented and filled with pitfalls due to dominance by local interests. So I was quite excited to read a new report saying Brown-Forman (NYSE: BF-B), a major US liquor maker whose brands include Jack Daniels whiskey, has teamed up with leading Chinese spirits maker Wuliangye (Shenzhen: 000858) to develop new products for emerging markets. Read Full Post…
I like to write occasionally about the market for traditional Chinese liquor known as baijiu, often more out of personal interest than because I see any big potential in the sector. While many of China’s other food and beverage sectors have consolidated around a few key players over the last 15 years, baijiu has been strangely resistant to such a movement. As a result, the industry remains highly fragmented and not very interesting for investors. But recent signs are pointing to a potential consolidation finally on the way, including the latest word that food and beverage giant Wahaha is entering the field in a bid to develop a new national brand based in southwest China’s Maotai county, an area famous for the traditional liquor. Read Full Post…
It’s been nearly a year since makers of the traditional Chinese liquor called baijiu were hit by a double-whammy created by a food safety scandal and a Beijing crackdown on lavish government spending, sending the sector into a prolonged winter. Media are focusing on this one-year anniversary to chart the recent woes of top names like Moutai (Shanghai: 600519) and Wuliangye (Shenzhen: 000858) and talk about what they can do to turn things around. My view is that these companies are in dire need of an image makeover, which should include development of newer, lower alcohol products and major marketing campaigns targeting a generation of younger professionals in major cities. Read Full Post…
Western alcoholic beverage giant SABMiller (London: SAB) is making headlines for its newly announced deal to buy a major Chinese beer maker, raising the interesting possibility that other foreign firms could soon make bids for makers of traditional baijiu liquor. For those who don’t follow the China liquor market too closely, baijiu makers have been under pressure since the beginning of the year, when media first began reporting that their products contained unsafe levels of plasticizers. The ongoing crisis could provide some interesting buying opportunities for foreign alcoholic beverage makers like SABMiller and Diageo (London: DGE), which are eying a bigger share of China’s massive market for alcoholic beverages.
Western alcoholic beverage giant SABMiller (London: SAB) is making headlines for its newly announced deal to buy a major Chinese beer maker, raising the interesting possibility that other foreign firms could soon make bids for makers of traditional baijiu liquor. For those who don’t follow the China liquor market too closely, baijiu makers have been under pressure since the beginning of the year, when media first began reporting that their products contained unsafe levels of plasticizers. The ongoing crisis could provide some interesting buying opportunities for foreign alcoholic beverage makers like SABMiller and Diageo (London: DGE), which are eying a bigger share of China’s massive market for alcoholic beverages.
