Jinshiyuan: The Baijiu market is approaching the bottom, and in the future, drinking frequency may increase, but the amount consumed per occasion will decrease.

Recently, Hansel & Gretel posted an investor visit and reception record. It reveals that the specific dividend distribution plan will be formally discussed with the controlling shareholders before the annual report. Management may recommend that the dividend payout ratio be further increased. The company will continue to optimize its dividend policy and actively repay the broad investors’ trust.

The capital expenditure plans for the coming years are already fairly clear. After the completion of the capacity expansion and technological upgrade project in the southern plant area, there will not be major construction investments again within the next few years. The originally planned follow-up completion work for the southern plant area technological upgrade project, as well as supporting facilities such as liquor storage warehouses and storage facilities, are important measures to ensure production capacity and quality, and will be completed as scheduled.

The company’s business development logic has shifted from passive coordination to proactive development: by conducting in-depth analysis of market information such as geographic location and consumption capability, it precisely identifies key target regions and potential merchants for proactive negotiations, rather than seeking chance partnership opportunities at trade shows. Inbound efforts driven by short-term promotional incentives at trade shows often lack sustainability.

When asked whether the current downturn pressure in the baijiu market has already bottomed out, and what structural changes will occur in consumers’ drinking habits and frequency in the future, the announcement response said: judging from sales, it may not have fully bottomed out in the short term, but given the huge population base, it is already fairly close to the bottom.

Future consumption trends will be reflected as follows: drinking frequency may increase, but the amount consumed per occasion will decline; consumption motivation will shift from “social drinking accompaniment” to “self-pleasure drinking.” With changes in social activities, scenarios in which people drink independently or try to please themselves within a small circle will increase; this in fact reflects the natural return of baijiu as a lifestyle consumable. For groups with consumption capability, baijiu is gradually evolving into a normalized consumption that keeps pace with life rhythms and pairs well with meals for self-pleasure. The resilience of this demand will support the industry’s long-term survival.

Regarding the trend of baijiu exports, the announcement states that the internationalization of Chinese baijiu is an inevitable direction, and overseas market potential is enormous. However, currently the overall absolute scale of exports remains relatively small. Market education and the formation of consumption habits require a gradual process and cannot be achieved overnight (we have already entered 20 countries and regions). Baijiu’s acceptance in international markets mainly depends on strong national comprehensive strength and the output of cultural soft power. Only when Chinese culture (including food and beverage culture) gains broader international recognition and follow-through, can the huge potential of international markets be transformed into real demand.

The company has always been monitoring market changes and young people’s preferences. Directions such as low-alcohol baijiu and women-oriented baijiu have indeed been discussed internally, but there are currently no actual products launched. If there is a meeting, it will tell everyone through public information.

At this stage, the company’s main efforts and resources are still focused on building its existing core products and deepening its market presence. Therefore, even if there are new products in the future, in the short term they will not have a major impact on the company’s overall performance.

(Company announcement)

(Editor: Lin Chen)

Keywords:

                                                            Hansel & Gretel
                                                            Baijiu