How can the “North-South Dialogue” of the world’s top liquor brands learn from each other from “delivering things” to “reaching people”?

With the birth of human civilization, wine appeared in history. The long river of time and waves wash away the sand. In today’s human culture, there are a total of eight famous wines. They are: French brandy, British whisky, Russian and Finnish vodka, Cuban rum, Dutch gin, China baijiu, Mexican tequila, and Japanese sake. Except for sake, which is brewed wine, everything else is distilled wine.

In terms of scale, the global spirits market will reach US$492.08 billion in 2024 and is expected to reach US$640.78 billion in 2031. The good news is that China, with its huge population size, accounts for about US$100 billion. But unfortunately, China liquor has basically not entered the international market.

In 2024, the annual export volume of China’s liquor will be US$970 million, a year-on-year increase of 20.4%; the export volume will be 16.42 million liters, a year-on-year increase of 6.3%. It is worth noting that the average price also rose to US$59 per liter, a year-on-year increase of 13.3%. This means that the added value of China’s liquor exports is getting higher and higher. Moutai accounts for a large proportion of exported liquor. In 2024, Moutai exceeded its annual internationalization goal, sold its products to 66 countries and regions around the world, and its export revenue exceeded RMB 5 billion for the first time, a record high.

However, this scale is still too small compared with Moutai’s revenue of RMB 173.8 billion in 2024, with a proportion of less than 5%. Objectively speaking, this is inconsistent with the influence of Moutai and the influence of China products in the world.

Taking brandy as an example, in 2022, the global market size of brandy will be approximately RMB 231.3 billion, of which, the market size of China brandy will reach RMB 75.8 billion, accounting for 32.7% of the global market. Among them, the total amount of imported brandy was 43.32 million liters, with a total import value of 12.5 billion yuan. In other words, the import volume of brandy alone greatly exceeds the total export volume of China’s liquor products.

This gap is normal. Although “Nezha 2”, which has recently become a hit in the China film market, has broken many international records for China films, the vast majority of its box office is still produced domestically. However, at the same time, this gap also means huge opportunities that need to be explored by China Liquor.

1. Coming from south to north: A global mobile narrative of top liquor brands

Judging from the global trade history of human spirits, its global mobility narrative mainly relies on cultural communication in the early and middle periods. After industrialization, Western culture spread around the world, driving the spread of Western alcohol. Now foreign spirits have entered the later stage of dissemination, entering the stage of category brand narrative and localization operation.

Fuyi Wine Group is a typical example. Treasury Wine Estates (TWE) is the largest wine group in Australia. It has a long history and owns more than 80 well-known brands including Beringer Vineyards and Penfolds. At present, Fuyi Group is deeply cultivating the China market. This is why Fuyi took the initiative to visit Moutai recently.

This is a high-profile visit. Fuyi sent core members such as Tang Mujin, General Manager of Penfolds Global, Wu Mingfeng, General Manager of China; Moutai was led by Zhang Deqin, Secretary of the Party Committee and Chairman of the Board. Tu Huabin, Deputy General Manager in charge of production, and the heads of Moutai Import and Export Company and Moutai Wine Company all attended the discussion. The two sides held discussions and exchanges on the internationalization of alcohol brands. Moutai’s attention to this discussion reflects its determination to internationalize.

Fuyi is located in Australia, in the southern hemisphere, and Moutai is located in the northern hemisphere. What can both sides gain in this North-South dialogue between the world’s top liquor brands? There is a substitution and complementary relationship between wine and liquor, between low-alcohol and high-alcohol. But more importantly, Moutai and Fuyi have complementary relationships in terms of channels and market structure.

2. Integration and symbiosis: Top alcohol brands must work together to strengthen their ability to shape consumption channels

For consumer goods, channels are crucial, especially when entering a brand’s emerging markets. This is equally important for the internationalization of Moutai and Fuyi.

In fact, for Maotai, Fuyi is not large. In the second half of 2024, Fuyi’s global net sales will be approximately A$1.544 billion (approximately RMB 7.078 billion). In contrast, Moutai’s annual revenue is hundreds of billions of yuan. However, Fuyi’s products are sold to more than 70 countries and regions around the world and have accumulated valuable globalization experience in the international market. This is exactly what Moutai needs now.

First of all, Fuyi’s mature global channel layout. Fuyi has a strong influence in the global wine industry, with annual wine sales reaching 32 million boxes and products sold to more than 70 countries and regions around the world. It is still growing rapidly. In 2024, Fuyi’s global net sales will increase by 20.2% year-on-year.

Among Fuyi’s brands, the Penfolds series, which is relatively familiar to China consumers, achieved net sales of A $557 million in the first half of fiscal year 2025. Its net sales in Asia were approximately A$386 million (approximately RMB 1.766 billion), accounting for nearly 70% of the total, a year-on-year increase of 50.4%. Penfolds is so popular in Asia not only because of its brand, but also because of its excellent channel capabilities and precision marketing capabilities. To a certain extent, Fuyi took the initiative to visit, join hands with Maotai, borrow Maotai’s channels and influence, and deeply explore the China market, which reflects its ability.

Moutai is doing the same. At the end of 2024, Moutai sent several inspection teams to exchange abroad. At present, Moutai is vigorously building overseas market coverage. By setting up overseas local distributors, it sells its products to many countries and regions around the world. It already has a considerable market scale in Japan, the United States and other regions.

3. From material to people: Top alcohol brands must strengthen their ability to participate in shaping local lifestyles

Happiness and sorrow, happiness and sadness in life are often accompanied by good wine. Wine is found in lifestyles in different regions and cultures, and wine shapes people’s lives.

The Penfolds brand first came to China, dating back to Shanghai in 1893. This year, Huguang Governor Zhang Zhidong founded the Self-improvement School to cultivate diplomats who are proficient in foreign literature. This was the predecessor of Wuhan University and the first new type of higher specialized school in modern China. At that time, Fuyi became part of a new way of life in China through the trend of spreading Western learning to the east. This is why Zhang Deqin especially mentioned Fuyi’s capabilities in humanistic care and brand building during the discussion.

Today, it is an era when the world is building a community with a shared future. Of course, China liquor cannot enter other countries with such a strong attitude, but today’s China liquor also has its own advantages of the times.

In the final analysis, a country’s products can be recognized in popularity and culture and gain high added value because a country can export strong technical products. There will be CPU, iPhone, and Space Shuttle first, and there will be NBA, professional baseball, Hollywood, Nike, and COACH. China now has products that reflect high-tech capabilities, such as high-speed rail, J-20 fighter jets, and space stations, as well as televisions, mobile phones, and new energy vehicles that are deep into life. Therefore, today’s China liquor can completely become a part of the lives of consumers around the world by relying on the life shaped by China products.

Haofeng relied on its strength to send me to Qingyun, but the efforts of China Liquor itself are also indispensable. Therefore, in 2025, Moutai will continue to explore the international highland of brand culture. It will cooperate with high-energy sports events, market art activities, and high-energy summits, and enter high-end shopping malls, hotels, Michelin restaurants, duty-free shops in large international airports and other terminals., and build a Moutai high-end cultural experience center. Moutai is or will soon become a staple for consumers in many countries.

Wine is bitter and spicy, and drinkers love wine because there is life in wine and culture in wine. The essence of liquor going out to sea lies in culture. As Zhang Deqin, Secretary of the Party Committee and Chairman of Moutai, said: Use culture as a medium to promote cultural exchanges and mutual learning among different countries and nations to effectively meet the needs of more consumers around the world.

Starting from 2024, Moutai Group has significantly accelerated its pace of internationalization. It has visited Switzerland, Italy, Indonesia, Thailand, Laos, China Hong Kong, Malaysia, Vietnam, Japan, Singapore, Australia, New Zealand and other countries and regions to carry out a series of cultural promotion activities to deeply expand the international market.

As the leader of China’s liquor, the deep logic of Moutai’s internationalization has transcended simple market expansion, but stands at the height of cultural going to sea, shifting from product exports to cultural going to sea strategy. From simply selling wine, just at the level of transitivity, to a selling lifestyle based on cultural identity, reaching a level that touches and touches people. By building an international brand IP and participating in international high-end conferences, Moutai allows the world to know and understand China’s liquor culture. The two major activities it has created, Moutai Night and Moutai Culture Festival, have become distinctive international brand cultural business cards.

Cultural going abroad focuses on integration. Moutai has launched different activities based on the different cultural characteristics of different countries. In Singapore, Moutai continues to deepen the IP influence of Moutai Night; in Tokyo, Moutai tastings are held to drink the aroma of grass in the spring; in Paris, Moutai is on the counter at the Haussmanian store of Lafayette Department Store; in Milan, the fragrance is revealed at food exhibitions. 110 years ago, Moutai became famous at the 1915 Panama Expo. Today, Moutai is beginning to tell a new story of China liquor around the world.

4. System construction: Top alcohol brands must shape the overall system capabilities that adapt to internationalization

Internationalization is not simply about selling products, or even entering life. It is not only a concept of consumption, but also a concept of production. This means that internationalization is a concept of the entire industrial chain and an overall system capability.

Fuyi Group’s successful globalization is also inseparable from its ability to integrate locally. The group owns more than 11,000 hectares of vineyards in Australia, New Zealand, the United States, France, Italy and other places. At present, Fuyi is deeply deploying the China wine market. Just over two months ago, in December 2024, Fuyi Wine Group acquired a 75% stake in Ningxia Wangyueshi Winery for RMB 130 million.

Yueshi Winery is located in a famous wine-producing area in China, bordering the towering Helan Mountains in the west and the upper reaches of the Yellow River in the east. It has 43 hectares of high-end grape plantations, an expandable modern winery and a wine cellar. For Fuyi, the acquisition of Wangyue Stone Winery not only provides high-quality grapes, but more importantly, it is an important step in Fuyi’s localization in China. Now, some of the grapes produced by Mochizuki Stone Winery have been used for the Penfolds brand.

It is worth mentioning that although Penfolds Global General Manager Tang Mujin is a China name, he is actually a foreigner and his English name is Tom King. Choosing a homophonic China name is also a localization effort.

At this point, China liquor still needs a standardization construction process. The good news is that at the end of February, the China Liquor Standardization Technical Committee issued the “General Rules for Liquor Quality”. By dynamically adjusting physical and chemical indicators according to production time and introducing a flavor wheel system, a standardized language for expressing liquor quality for consumers was established for the first time., establish a unified image of Chinese liquor. This will help promote and accelerate the internationalization of liquor. At the same time, it also means that technological innovation is a key basic strategy for China liquor to go global.

In the past ten years, Moutai has been the leader in China’s liquor going overseas. Since 2017, Moutai’s share of total liquor exports has been increasing, from 60% to more than 75% in 2023. Behind this rapid growth trend are the six systems proposed by Moutai in strategic planning to ensure its internationalization strategy. From expression, products, channels, prices, compliance to policies, it implements the internationalization path comprehensively and systematically.

Fuyi, who has many years of international experience, can naturally see Moutai’s international potential. From this perspective, they are optimistic about the internationalization of Moutai, which may be more important than their optimistic view of China’s wine market. To Fuyi, the important thing in cooperating with Moutai is not necessarily the profits in the China market, but what it can do to help Moutai internationalize and what it can gain in the process.

For China’s leading wine companies, this also means that there are many opportunities in the current wave of China products and China companies going abroad. China liquor can completely break regional restrictions and achieve the global market expansion of China liquor through cultural export and brand narrative.