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 a élargi sa gamme de produits pour attirer des groupes d'âge plus jeunes en Chine et, selon le groupe d'analystes financiers Caixin Global, sa dernière extension de gamme est un partenariat avec le géant privé du chocolat Mars pour lancer un chocolat infusé à l'alcool.

Le chocolat, qui a reçu des critiques positives, est le dernier effort de Moutai pour donner à ses produits un attrait supplémentaire grâce à des partenariats avec des marques de consommation connues.

L'automne dernier, la chaîne chinoise Luckin Coffee a collaboré avec Moutai pour créer un nouveau produit appelé "soy sauce latte", qui ajoute du baijiu au café de Luckin.

La chaîne de cafés a déclaré avoir vendu, le jour du lancement, plus de 5,42 millions de tasses de lattes infusées d'alcool Moutai, pour une valeur de plus de 100 millions de yuans (13,69 millions de dollars américains).

En 2022, Kweichow Moutai a ouvert son premier magasin de crèmes glacées proposant jusqu'à 14 parfums infusés au baijiu.

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