Hello everyone, I'm your financial journalist. Today, we're not talking about which listed company has reached a new daily high, but about a traditional industry that is on the verge of disappearing—yellow rice wine.
There was an interesting piece of news recently: In the first half of 2026, Kuaiji Mountain had revenue of 853 million yuan, while Guyue Longshan had 787 million yuan. Many people might think, "The leader in yellow rice wine has changed!" But this is actually a case of "the boy who cried wolf." The entire yellow rice wine industry is experiencing a prolonged period of decline, and Guyue Longshan, once the undisputed champion, is now facing a critical test of survival.
To make this all clearer, I've broken down this in-depth analysis into five points, explained in plain language: What exactly is wrong with yellow rice wine? What are Guyue Longshan's problems? Is its current strategy of "restructuring" effective? And is there still a chance for recovery?
1. The Pond is Shrinking; Fighting for the Title of "Number One" is Meaningless
First, we need to understand the big picture: the entire yellow rice wine industry is shrinking significantly.
If we compare the national market for yellow rice wine to a pond, the water level is dropping rapidly. Data shows that from 2017 to 2023, the sales revenue of legitimate yellow rice wine companies nationwide fell from 19.5 billion yuan to 8.5 billion yuan, with an average annual decline of nearly 13%. Even more concerning, in 2022, the sales of yellow rice wine were surpassed by "mixed alcoholic drinks" (such as RIO and plum wine), dropping to fourth place in the alcohol market with a market share of less than 2%.
What does this mean? It means that whether Kuaiji Mountain or Guyue Longshan becomes the "leader" is like fighting for territory in a pond that is getting smaller. Although Guyue Longshan has been overtaken, which might seem embarrassing, what's more frightening is that the entire industry is in decline. If the pond dries up, no matter how big the fish are, they can't survive. So, this "battle for the number one" is essentially a struggle for survival in a declining industry.
2. Young People Don't Drink Yellow Rice Wine Because It's Too "Traditional" and Too "Inexpensive"
The core reason yellow rice wine is struggling can be summed up in two words: mispositioning.
First, the price range is problematic.
For decades, yellow rice wine has targeted the 10-20 yuan price range, focusing on volume at low prices. This has created a vicious cycle: because it's cheap, people think it's of lower quality; because of its low quality, it can only be sold to the mass market that is sensitive to price.
Now, look at the higher end—prices above 100 yuan are dominated by liquor, which is considered a social necessity. At the lower end, beer and beverages are more competitive and refreshing. Yellow rice wine is stuck in the middle, unable to move up or down, becoming synonymous with "low-end alcohol."
Second, there's a serious gap with the younger generation.
The Z generation (born after 1995 and 2000) has a尝试 rate of only about 12% for yellow rice wine. In their eyes, yellow rice wine is either associated with "elderly drinks" appearing on New Year's dinner tables or with "kitchen condiments" used to remove fishy flavors from braised meat.
Without a drinking habit, social appeal, or a sense of fashion, yellow rice wine is increasingly alienated from the mainstream consumer group. This is a typical case of mispositioning, and the entire industry has failed to break free from the perception of being a low-end product.
3. Guyue Longshan's Three Major Problems: Stagnant System, Poor Products, and Limited Geographic Reach
If the overall industry environment is a "natural disaster," then Guyue Longshan's problems are more man-made. Analysts have identified three fundamental issues that have compounded over time:
- The deepest issue is a rigid system with slow decision-making.
Guyue Longshan is a state-owned enterprise from Shaoxing, which offers stability but also comes with slow progress. Compare this to its private competitor Kuaiji Mountain, which launched a sparkling yellow rice wine in July 2023 and went from concept to market in just three months—very fast. Guyue Longshan, on the other hand, has been struggling with balancing growth, price stability, and channel management. Its decision-making process is lengthy, and its executives are older and more conservative. Even the general manager admits that Kuaiji Mountain's private management structure is more flexible. In the fast-moving consumer goods industry, slowness equals death.
- Second, despite years of trying to move to the high-end, there's a lack of genuine products.
Guyue Longshan has long aimed to sell high-priced wines, such as the "Guoniang 1959" series, which costs 1159 yuan per bottle. However, in 2024, only 40,000 boxes were sold. Why? Because the top three selling products on its Tmall flagship store still have an average price of 10-20 yuan. This shows that the public still views it as a cheap wine. With low-end sales dominating, the company's gross profit margin cannot improve. To maintain revenue, it has to spend heavily on advertising, increasing marketing costs from 169 million yuan in 2021 to 252 million yuan in 2024, yet revenue growth has slowed. The money spent has not boosted brand value; instead, it has eaten into profits.
- Third, it's heavily reliant on the Jiangsu, Zhejiang, and Shanghai regions, with failed attempts at national expansion.
Nearly 60% of Guyue Longshan's revenue comes from these three areas. The company has tried to expand through local restaurants and high-speed rail advertisements but with poor conversion rates. Yellow rice wine has strong regional cultural ties, and outside these regions, many people don't know how to drink it or are not accustomed to its taste.
These three problems combined result in: no profit from selling cheap wines, low sales from high-end wines, and ineffective advertising. This is why its revenue declined by 11.89% in the first half of 2026, and its net profit after deducting non-recurring expenses fell by nearly 35%. This is not just a temporary market downturn but a structural collapse.
4. "Proactive Reductions" Help Stop the Losses, but Don't Generate Revenue
In response to the crisis, Guyue Longshan has taken steps to reduce costs.
It has eliminated less profitable low-end products and implemented a quota system for high-end wines, focusing on selling higher-priced items instead of quantity.
Is it effective?
Yes. The gross profit margin has reached 40.62%, the highest in six years. The "Qinghua Zui" series, in particular, saw a 35% increase in sales, with the 20-year-old wine growing by 53%. This shows that by letting go of the obsession with scale and focusing on higher-priced products, profits can indeed improve.
However, the challenges are also clear.
Although the financial numbers look better, there was a net cash outflow of 310 million yuan, and contract liabilities (prepayments from distributors) decreased by 60%. This indicates that the real demand from distributors has not recovered. Distributors still have a lot of inventory and are hesitant to order more. The good numbers are largely due to the elimination of low-profit products, not a surge in market demand.
It's like someone trying to lose weight: the weight has gone down, but muscle mass has not increased, and there might even be a loss of muscle. This is just stopping the bleeding; the company has not yet started to generate new revenue.
5. Where’s the Way Out? Stop Fighting for the Title and Focus on Pricing Power
Is there still a chance for Guyue Longshan? Analysts offer two perspectives:
Mirror One: Kuaiji Mountain.
Kuaiji Mountain has shown that yellow rice wine can be innovative and youthful (with its sparkling wine). However, it also has issues: its sales expense ratio is as high as 27.7% (27 yuan out of every 100 yuan in sales is spent on promotion), and the resulting customer loyalty is low. This shows that relying on heavy marketing for national expansion is unsustainable.
Mirror Two: The History of Herbal Tea.
Herbal tea was once a local specialty of Guangdong, but Wanglaoji became a national brand through nationwide advertising and education. The national expansion of yellow rice wine requires a complete re-education of consumers.
What is Guyue Longshan's real strength?
It has two unique assets that others cannot copy:
1. The largest non-material cultural heritage-based brewing capacity in the industry;
2. A 308-acre central wine storage facility with aged wines (an asset accumulated over time, not something money can buy);
3. A brand heritage as a wine used in state banquets.
These assets point to pricing power rather than just sales volume. What yellow rice wine lacks is not another leader but a brand that can change the perception of it as a cheap drink.
Conclusion:
Guyue Longshan's current efforts to reduce costs are just the first step in stopping the losses. The real challenge is: can it transform its aged wines into something that consumers see as "high-end, scarce, and worth collecting"? Can it transform its state-owned enterprise structure to be as responsive as Kuaiji Mountain?
If it fails, it might just survive a bit longer in a shrinking market. But if it succeeds, it will not just be the "number one" in yellow rice wine; it will become the standard-setter for high-end Chinese yellow rice wine. That's where the true dignity of a century-old brand lies.