China Alcoholic Drinks Association: The Baijiu industry is entering a turning point; the era of making money while lying down is over.

Ask AI · How can liquor companies’ C-end strategy truly align with consumer needs?

At an industry forum held during Spring Sugar Festival (Chun Jiao) on March 23, Liu Zhen’guo, deputy secretary-general of the China Alcoholic Drinks Association, said in his remarks that 2026 will be a turning-point year for the baijiu industry. In 2025, the baijiu industry faced issues such as supply-demand imbalance, high inventory levels, unstable pricing, and weakening consumption scenarios. Behind this is the fact that after a period of rapid growth that began in 2015, the industry has started to return to rationality.

In recent days, the 2025 performance results released by multiple liquor companies show that their growth rates have further declined or slowed compared with the same period last year. For example, Liquor Jiu (000799.SZ) released a performance forecast indicating that in 2025 it will incur a loss of RMB 33 million to RMB 49 million, compared with a profit of RMB 12.493 million in the same period last year; Jinhui Liquor (603919.SH) reported operating revenue of RMB 2.92 billion, down 3.4% year over year, and a net profit attributable to shareholders of RMB 350 million, down 8.7% year over year, while the same period last year still saw double-digit growth; Shede Liquor (600702.SH) achieved revenue of RMB 4.42 billion in 2025, down 17.5% year over year, and a net profit attributable to shareholders of RMB 230 million, down 35.5% year over year.

Liu Zhen’guo said that against the backdrop of a return to rationality, the baijiu market is undergoing a series of new changes. On the one hand, although baijiu prices continue to trend downward, as prices return to rational levels, some survey-responding liquor traders and liquor companies report that baijiu sales are also increasing in step. On the other hand, while traditional baijiu consumption scenarios are shrinking, new scenarios such as casual sipping and light tipsiness are emerging. Categories such as fruit wines and distilled wines made by fermentation within fermented liquor products are seeing growth, and beverage consumption categories are becoming more diversified.

Since this year began, more and more liquor companies have announced they are “fully turning to the C end,” aiming to shorten the distance with consumers and thereby pursue additional incremental volume. But Liu Zhen’guo believes that, at present, many liquor companies’ C-end strategies are still based on the existing product systems of liquor manufacturers to reach segmented consumer groups—through channel flattening and consumer engagement. That is the C-end strategy the liquor companies want. The next step, he suggests, is for liquor companies to reverse-engineer from consumers’ actual needs and rebuild their product, channel, and pricing systems.

(This article comes from First Financial)