Time-honored Moutai thrives in decade of growth

Moutai spirit has become one of the most famous brands on the planet after a transformation in Guizhou province's transport network and local government guidance helped the distiller achieve a market value of more than 1 trillion yuan

Holding the honor of being an oriental hub of sorghum firewater, Kweichow Moutai Group, a distilling giant headquartered in Southwest China's Guizhou province, has made inroads in its overall development in the past decade.

In 2012, Guizhou province included the plan of building Moutai into a business valued at 100 billion yuan ($13.91 billion) in its government work report. To this end, the renowned alcoholic beverage company embarked on a new phase of development.

Between 2012-15, the liquor industry experienced an adjustment period partially due to the consumption sector.

Attaching great importance to the development of Moutai, the Guizhou provincial government rolled out a guideline to help the distiller achieve a transformation in their business development layout, market strategy and management. It also guided the company in changing its consumption scenarios, targeted clients, sales channels and markets.

Under this guidance, Moutai completed its transformation, shifting from high-level business consumption to mass consumption. This move established a solid market foundation for Moutai. In 2013, Moutai's revenue reached 34.62 billion yuan, ranking first among its peers.

Thanks to the shift in consumer markets and successful strategy adjustment, Moutai drove development out of its trough by the end of 2015.

With years of development, Moutai's market value reached $71.5 billion in 2017, making it one of the most valuable spirit giants in the world. In the same year, Moutai's production capacity achieved 40,000 metric tons, and its revenue reached 76.4 billion yuan, up 50.5 percent year-on-year.

In 2019, Moutai made three breakthroughs in its development, with operating revenue topping 100 billion yuan, its stock price reaching 1,000 yuan per share and its market value surpassing 1 trillion yuan. The company accomplished its goal one year ahead of schedule during the 13th Five-Year Plan period (2016-20). During the past 10 years, Moutai has moved with the times to complete its transformation, promoting its development from a scale-focused enterprise to a business centering on major industry.

Moutai's success not only comes from business transformation but also from the support of Guizhou, especially from the province's transport network development.

Guizhou, a landlocked and mountainous province, caused difficulties for Moutai to extend outward due to the slower development of its transport system in the last century.

Over the past few years, the local government has accelerated construction of its infrastructure. By the end of 2021, expressways in Guizhou spanned 8,000 kilometers, connecting roads in the province.

Leveraging the rapid development of Guizhou's transport and other infrastructure, Moutai has built the Zunyi Maotai Airport in Renhuai city, helping to promote trade, economy, consumption and cultural exchanges between Guizhou and the world. These efforts also helped Moutai achieve expanded international cooperation, especially in countries involved in the Belt and Road Initiative.

In the next step, Moutai has mapped out its plan to develop into a world-class business, according to Ding Xiongjun, chairman of the group. The group is embarking on a high-quality road in ecological protection and green development, technological innovation and overall reform, cultural development and security and eco-friendly production, according to Ding.

Ding noted that Moutai will also adhere to manufacturing high-quality products with craftsmanship through the implementation of an improved quality management system. Efforts should be made to target an improved, balanced and higher-level development in product quality, implement a concerted production process incorporating quality checks and supervision, ensure a shared development between product quality and ecological protection, and conduct modern management in quality, Ding said. On top of this, Ding called for more supportive work in terms of leadership, talent, financial assistance, performance evaluation and brand promotion.

Timeline

2012

Moutai ranked 69th on Brand's Top 100. Most Valuable Global Brands list and is valued at $11.84 billion. Moutai also launches its large-scale public welfare activity to support the Project Hope for assisting students from disadvantaged backgrounds. It donates 100 million yuan($13.89 million) per year in tuition assistance for 20,000 university freshmen from low-income rural areas.

2013

Kweichow Moutai is protected as a geographical indication by the State Administration for Market Regulation. The total area of products under the Gl protection covers 15.03 square kilometers.

2014

Moutai Group begins investing 50 million yuan per year in a plan to pour a total of 500 million yuan over 10 years into the ecological protection of the Chishui River in Guizhou.

2015

Kweichow Moutai Jiang-flavor Liquor Sales Co is established. Moutai Group offers targeted assistance for poverty alleviation. During the Centennial Anniversary Celebration of the Panama-Pacific International Exposition held in San Francisco, the city's mayor Ed Lee announced that Nov 12, 2015, is Moutai Day in San Francisco.

2016

Moutai's blending and storage workshop is established. The workshop integrates blending and storage with research of liquor testing and texture along with new product development. It is praised as "the heart of Moutai". Moutai holds its brand promotion in Hamburg, Germany, during the group's promotion tour along countries involved in the Belt and Road Initiative.

2017

Moutai becomes one of the world's most valuable spirit companies. Moutai Institute is established in Renhuai, Guizhou. Zunyi Maotai Airport hosts its maiden flight.

2018

Moutai's market cap surpasses 1 trillion yuan. The group launches a roundtable on the development of Guizhou's liquor businesses, proposing the philosophy of win-win cooperation and shared development.

2019

Moutai reaches three major milestones with the company's revenue topping 100 billion yuan, its share price exceeding 1,000 yuan and its market value surpassing 1 trillion yuan.

2020

Moutai ranked 20th among the world's top 100 best-performing companies during the COVID-19 outbreak, according to the Financial Times. It is the only food enterprise in the top 20 global rankings.

2021

Moutai Group is commended by central authorities as an outstanding example in China's poverty alleviation campaign. The share price of Kweichow Moutai tops 2,000 yuan per share for the first time. The group proposes its high-quality development plan in the 14th Five-Year Plan (2021-25), focusing on quality and promoting Chinese liquor culture.