Key investment points:
The channel change emerge in an endless stream of Baijiu liquor industry. The underlying logic of Baijiu enterprise’s channel mode choice is the channel control power and the channel benefit distribution. The channel power, channel profit, channel structure and channel relationship have different characteristics in different modes, which are closely related to the macro consumption environment, industrial policies, the endowment and development stages of liquor enterprises, the change of terminal consumption demand and technological innovation.
Comparing the three types of channel models, channel control and benefit distribution are the key. The core difference between different models lies in the level of channel control and the distribution mode of channel interests. Under different macro policy backgrounds, wine enterprises generally use their own talents to choose the appropriate marketing model according to different product positioning and development stages. According to the dominant position of manufacturers and dealers, the channel mode of wine enterprises can be divided into three categories:
1) “Manufacturer led mode”: the manufacturer has strong control over channels and terminals, but the channel cost is high, which is suitable for wine enterprises with strong brand strength or outstanding channel management ability. For example, in 2008, Maotai made use of the advantages of brand power and the strong control of small business system to compete for Wuliangye Yibin Co.Ltd(000858) pricing power; Yanghe has created a “1 + 1” model, efficient channel management and control, and helped Yanghe develop rapidly in the “golden decade”.
2) “Dealer led mode”: manufacturers have weak control, but can achieve rapid expansion with the help of dealers. For example, Wuliangye Yibin Co.Ltd(000858) 96-03 quickly seized the market with the help of the big business system; The Anhui Kouzi Distillery Co.Ltd(603589) general agent model significantly reduces the sales expenses and improves the net profit level. The 20-year gross profit margin / net profit margin reaches 75% / 32% respectively; Sichuan Swellfun Co.Ltd(600779) the new general generation model helps to develop small-scale markets.
3) “Win win cooperation mode”: the interests of manufacturers and dealers are bound to share development dividends. For example, Qiquan model and brand franchise model initiated by Luzhou Laojiao Co.Ltd(000568) helped Laojiao practice the strategy of large single product, efficiently launch costs and straighten out prices, and the net interest rate increased from 3% in 2005 to 42% in 10 years; Wuliangye Yibin Co.Ltd(000858) in the early stage, with the help of OEM OEM OEM mode, we realized diversified expansion of products and digested huge low-end production capacity.
The future development trend of Baijiu channel is digitalization, refinement and online. 1) Digitization. Intelligent, digital and efficient way is the upgrading direction of Baijiu channel, such as Wuliangye Yibin Co.Ltd(000858) 2018 and IBM cooperation. Through digital transformation, the important node data can be seen in real time, providing support for the “control of profits” in 2019. 2) Refinement. In recent years, high-end Baijiu has lifted wave of channel change. The core idea is to focus on fine operation: the core single product is directly run, and small single products are distributed through product mix. 3) Online. Online channels represent the general trend of Baijiu in recent years, including the shortening of channels, simplification of classification, and the direct facing of consumers. The Wuxi Online Offline Communication Information Technology Co.Ltd(300959) has been gradually distributing electricity providers in recent years.
Investment suggestion: Baijiu enterprise channel represent the general trend of flat, fine and online. Some wine enterprises combine their own development stages and characteristics, optimize the channel mode and accumulate deep competitive advantages. Recommend regional sub high-end liquor enterprises Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Anhui Gujing Distillery Company Limited(000596) that comply with the development of the times, actively change and have valuation advantages in recent years; It is suggested to pay attention to the national sub high-end liquor enterprises Jiugui Liquor Co.Ltd(000799) , Shede Spirits Co.Ltd(600702) with good results in channel reform.
Risk tips: Residents’ consumption level does not meet expectations, industry competition intensifies, and food safety risks.
（ Guolian Securities Co.Ltd(601456) ）
