Kweichow Moutai sees profits rise 16%

The world’s biggest alcohol group, Kweichow Moutai, saw its first-quarter net profit rise 16% on strong sales despite lacklustre consumer momentum in China.

The group made CNY24.065 billion (US$3.32 billion) on quarterly revenues of CNY45.78 billion, which were an 18% increase on the same quarter in 2023.

That means the group has started well on track in its goal to achieve 15% growth in 2024.

It made net profits of CNY74.73 billion ($10.33 billion) in 2023.

Baijiu, which already accounts for 95% of the country’s alcohol market, is enjoying the benefit of the Chinese consumer’s reluctance to spend on imported Western premium spirits while the economy remains in the doldrums.

After a buoyant early part of 2023, high youth unemployment and a deepening property price crisis have prompted consumer caution.

Lunar New Year

Both Pernod Ricard and LVMH commented on the softness of Chinese demand in their latest figures which encompassed the key sales period of the celebrations of the Lunar New Year in mid February.

But that pattern was not repeated at Remy Cointreau, whose figures for the January to March quarter showed “significant growth” in China which helped to drive performance at its Cognac division well above expectations.

Remy Cointreau leads the market for Cognac in China, where it is the largest category of imported spirits.

In the latest quarter Moutai’s sales to distributors surged by 26% compared to 2023 to CNY26.3 billion, outpacing direct sales growth of 8% for the first time in the past 18 quarters.

Expansion

The news follows reports earlier this year, where db reported that despite sales increasing, the drinks giant has still lost its top spot as China’s most valuable company.

Kweichow Moutai ha ido ampliando su gama de productos para atraer a grupos de edad más jóvenes en China y, según el grupo de analistas financieros Caixin Global, su última ampliación de gama es una asociación con el gigante privado del chocolate Mars para lanzar un chocolate con infusión de alcohol.

El chocolate, que ha recibido críticas muy favorables, es el último esfuerzo de Moutai por dotar a sus productos de un atractivo adicional mediante asociaciones con marcas de consumo conocidas.

El pasado otoño, la cadena china Luckin Coffee colaboró con Moutai en un nuevo producto llamado "latte con salsa de soja", que adereza el café de Luckin con baijiu.

La cadena de cafés afirma que el día de su lanzamiento vendió más de 5,42 millones de tazas de Moutai con infusión de alcohol, por valor de más de 100 millones de yuanes (13,69 millones de dólares).

En 2022, Kweichow Moutai abrió su primera heladería en la que vendía hasta 14 sabores infusionados con baijiu.

Historias relacionadas

Kweichow Moutai sube los precios un 20% con confianza

Las acciones de la china Kweichow Moutai se disparan

Las previsiones de Kweichow Moutai se elevan a 75.000 millones de CNY