Moutai

"After the 20th century, Chinese baijiu was divided into two major schools, namely the Fen-type baijiu from Xinghua Village in Shanxi and the Luzhou-type baijiu from Luzhou in Sichuan. Moutai stands out as the baijiu that uses the most grain and has the longest brewing time, annually commanding the highest price, gaining fame during the Republic of China for winning awards at the Panama Pacific International Exposition. After the founding of the People’s Republic of China, Moutai was listed as one of the four “national famous wines” at the first national wine competition held in 1952, establishing its exceptional status. In terms of baijiu schools, Moutai should belong to the Sichuan-Guizhou branch."

"The brewing process of baijiu involves raw materials, fermentation pits, water use, blending, and storage, among other steps. The brewing of a bottle of Moutai goes through 30 processes and 165 technical treatments, with the entire brewing process taking at least 5 years. Each of these steps presents opportunities for improvement, whether it’s optimizing processes, replacing materials, or improving efficiency and quality through technological means."

"Even the market price of Moutai is determined by consumers. In the early 1980s, its retail price tag was 8 yuan per bottle, but due to tight domestic sales, the black market price was as high as 140 yuan. Even today, there remains a surprising gap between the manufacturer’s suggested retail price of Moutai and the actual market sales price, a rare phenomenon in China’s consumer goods sector."

"Moutai wine uses only three ingredients: sorghum, wheat, and water. So why has wine brewed from these ingredients become a legend in contemporary product history? This question has three keywords. Complex and rich: Without Moutai, the world would lack a flavor known as “sauce aroma.” From the birth of the first bottle to its finalized form, it took 147 years, a result of continuous relay by several generations. This was not an inevitable process but one filled with all the twists and drama of product creation. Super single product: Moutai is in the first tier of Chinese baijiu, and its single product’s annual revenue exceeds 100 billion yuan. Globally, there are three similar “super single products”: Coca-Cola, Pepsi, and iPhones, but Moutai is very different in product characteristics. Highest market value: This is a company with a product gross margin of 93%, whose market value surpasses all factories, banks, and energy companies in China, making it a maverick in the capital market. Even today, some see it as a “disgrace,” while others consider it a glory."

"Additionally, during the distillery era, Moutai emphasized using clear spring water in packaging. In general knowledge, spring water is certainly better than river water. In Ouyang Xiu’s “The Pavilion of the Inebriated Old Man,” there is the famous line, “Where the stream is deep, the fish is fat. Wine brewed from springs, springs fragrant and wine clear.” However, later Moutai masters found that spring water is “heavy water,” while the water from the Chishui River is “light water,” so light water is better for brewing Moutai. Therefore, the current Moutai is brewed with river water."

"In the history of contemporary baijiu, Moutai’s most astonishing innovation was changing the evaluation criteria of baijiu quality that had been set for hundreds of years—from tasting to scent assessment. In the “Moutai pilot project” of 1964, Moutai people discovered three typical characteristics of Moutai and then defined “sauce aroma” as the fundamental feature of Moutai. At the third national wine competition in 1979, the Chinese baijiu industry first distinguished major famous wines by aroma, initially proposing the four main aromas of sauce, clean, strong, and rice, which later evolved into twelve aroma categories. Henceforth, the baijiu industry entered an era of “one aroma ruling the world.” As the initiator of the “aroma revolution,” Moutai undoubtedly became the biggest beneficiary of this industry upheaval. It not only participated in establishing new industry evaluation standards but also became an independent school."

"The super single-item strategy strengthened consumers’ high brand awareness of Moutai liquor while creating ample and leisurely marketing and profit space for channel merchants. Globally, only Apple’s iPhone in the United States achieved similar success."

"During the planned economy era, the quality control system of Moutai was very strict. For the distillery, “quality is the greatest politics,” the enterprise could be non-profit, could have no scale—in many years, it was indeed in such a painful state—but the quality of the wine had to be guaranteed supremely. Over time, the “quality faith” integrated into the blood of the enterprise, becoming as unchangeable as a gene. When the market economy arrived, this “obsessive” insistence earned Moutai a huge number of loyal users."

"Moutai is a slow company. It takes five years to produce a bottle of liquor: one year from raw materials entering the factory to brewing, three years of storage, during which the base liquor doesn’t just sit; it requires blending adjustments after a year of storage, and then it must be stored for another two years before it can be used for blending. The blended liquor is then aged for another half year before factory inspection and packaging. Therefore, it takes at least five years from raw material entry to packaging for a bottle of Moutai."

"In the past 40-plus years, the Chinese liquor industry has gone through three “king eras”: From the 1980s to the mid-1990s was the “Fen Leader” period, where Shanxi Xinghuacun Fenjiu was the first liquor company with an annual production of over 10,000 tons, winning by scale. From 1994 to 2009, Wuliangye began to dominate the field. It successively incubated more than a thousand sub-brands, winning through channels and brand matrices. Then, it entered the “Moutai era.” During this period, China’s per capita GDP crossed the $10,000 mark, the new middle class led consumption upgrades, and value-for-money replaced cost performance as the new core competitive factor."

"From aroma theory to national standards, and then to original location protection, Moutai Distillery has constructed an unbreakable moat and wall for the sustainable development of the company. For any enterprise, moving from excellent to outstanding, from a crowded field to “only me,” the possible paths are no more than two: ownership of patented technology and formation of industry rules. Moutai’s success on the second path can serve as the most real reference for all enterprises."

"This strategy is also a manifestation of the “fool’s” philosophy—not extending, not covering, not penetrating, but focusing solely on the consumer’s mind, calling for market enthusiasm with the uniqueness of the product. I did a study, and since 1982, the second-hand market price of 53-degree Feitian Moutai liquor has been steadily rising, with an annual compound growth rate of about 8%. This is an awe-inspiring figure, implying that Moutai has acquired the attributes of a hard currency, unaffected by economic cycles."

"The reconciliation of grievances between Moutai and other famous liquors is both a result of common interests and mutual recognition achieved through years of market competition. In this process, Moutai took the initiative to make concessions, opening up spaces, and eventually forming a relatively harmonious industry atmosphere."

"From the perspective of national consumption power and aesthetic iteration, Chinese products with strong cultural symbols will achieve cognitive surplus, an indisputable law. From a competitive perspective, Moutai’s rise is related to its adherence to high pricing and super single-item strategy."

"Starting in 2014, Moutai began releasing limited edition zodiac liquors. Initially, they were not well-received by the market. However, as time passed, the brand’s value continued to expand, and zodiac liquors began to have collectible attributes, with prices rising in the secondary market. By 2023, the recycling price of the Ox zodiac liquor was around 3,400 yuan, while the price of the Sheep zodiac liquor, the one with the least production, reached as high as 28,000 yuan."