Summary of Key Points
In the past, the liquor industry thrived on the "three highs" – high prices, high alcohol content, and large bottle sizes – targeting banquets and gift-giving occasions. However, with younger consumers becoming the main market force, more fragmented consumption scenarios, and increased industry pressure, liquor companies are now shifting to a "three lows" strategy: lower alcohol content, smaller bottle sizes, and lower prices, in an attempt to attract this demographic. Whether this is merely a temporary response to the current challenges or a path to the future remains to be seen, as companies must address issues related to taste, integration into different scenarios, and the reshaping of the product's value.
I. Liquor Becoming "Fresh and Modern"? Lower Alcohol Content, Smaller Bottles, and Lower Prices Become the New Trend
In the past, liquor was typically 52 degrees and sold in large bottles at high prices. Now things have changed:
- Lower alcohol content: Bottles with less than 42 degrees are becoming the norm, with some even having as little as 28 or 29 degrees, making them milder and more comfortable to drink. Examples include Luzhou Laojiao's 28-degree "Guangming Mini" and Wuliangye's 29-degree "Yijian Qingxin" products.
- Smaller bottle sizes: Large 500ml bottles have been replaced by 100ml and 50ml packages, ideal for individual consumption, social gatherings, or light evening drinks, reducing the risk of waste. During this year's 618 shopping festival, nine major brands, including Moutai and Wuliangye, collaborated to launch 50ml "small drink" bottles.
- More affordable prices: Most of these products are priced under 100 yuan; for instance, Luzhou Laojiao's mini bottle costs only 16.9 yuan, and Kouzijiao's small bottles range from 28 to 39 yuan, making them affordable for young consumers. Market feedback has been positive, with sales of these small bottles increasing significantly on platforms like Taobao and JD.com.
II. Why Have Liquor Companies Suddenly Adopted a More Accessible Approach?
The change is not due to companies' desire to lower prices but to prevailing market forces:
1. Younger consumers: The current consumer base consists of those born in the 1990s and 2000s. They drink for enjoyment rather than to get drunk or to impress others. Smaller, lower-alcohol bottles lower the barrier to trying liquor, transforming it from a business tool to a daily beverage.
2. Changing consumption scenarios: Drinking used to happen mainly in formal settings, but now people prefer camping, small pubs, and drinking at home. These scenarios do not require large bottles, and the convenience of takeaway and instant retail makes small bottles more popular.
3. Challenging industry conditions: Liquor sales have declined, and prices of high-end products have dropped, leading to reduced revenue and profits for many companies. With the high-end market stagnating, companies are turning to the mass market to find new growth opportunities. The "three lows" strategy aims to attract younger and ordinary consumers. For example, the low-alcohol liquor market is expected to grow by 25% by 2025, with 38-degree products like Guojiao 1573 accounting for 50% of sales.
III. Will the "Three Lows" Trend Be Short-Lived? Several Challenges Need to Be Overcome
Despite the popularity, there are several challenges:
- Low repeat purchase rates: Many consumers try small bottles out of curiosity but switch to other beverages afterward, resulting in low loyalty.
- Merely superficial innovations: Some companies have simply reduced bottle sizes and alcohol content without improving the taste, making the products bland and unappealing to young consumers.
- Brand dilemmas: Using established brands for small bottles may lead to perception of "old wine in new packaging," while abandoning them may make it difficult to establish a new market presence.
IV. Can the "Three Lows" Become the Future of the Liquor Industry?
For this trend to be sustainable, the following issues must be addressed:
1. Improving taste: Low-alcohol liquor needs to have a distinctive flavor and not just be bland. This requires technological advancements.
2. Integration into young consumer scenarios: Liquor should be made more accessible in places frequented by young people, such as hot pot restaurants and music festivals, rather than just at formal events.
3. Redefining the product's value: Liquor's role should shift from a symbol of status to a source of emotional comfort, such as providing a moment of relaxation after work or a happy drink with friends.
In conclusion, while the "three highs" will continue to be relevant for certain applications (gift-giving and collection), the "three lows" strategy has the potential to drive new growth in the liquor industry. This path is challenging, but it's certainly better than sticking to outdated practices.
Summary
The shift from "three highs" to "three lows" represents the liquor industry's effort to adapt to changing times. Whether this strategy will be successful depends on whether companies can truly understand and cater to the needs of younger consumers by producing products that are enjoyable, suitable for various scenarios, and provide a positive experience. After all, the money of younger consumers is not easily earned.