Trade Secrets | Touch C, Improve Efficiency, New Liquor Drinks: Spring Sugar provides three "cures" for the Baijiu industry

The annual Spring Sugar and Wine Fair is regarded as a barometer for the liquor industry, with liquor companies and distributors from across the country typically attending to browse hotel exhibitions, enjoy hot pot, listen to forums, and observe market trends. However, after two years of deep adjustments in the liquor industry, the chill in the market has also seeped into the bustling atmosphere of the Spring Sugar Fair, where a series of new changes are unfolding in Chengdu’s Spring Sugar Fair in 2026.

The past scenes of famous liquor companies competing vigorously at hotel exhibitions are no longer present, and the topics discussed in forums have shifted from advertising and recruiting during peak seasons to exploring solutions and discussing how to survive better in the cold winter. Industry insiders believe that behind this year’s changes at Spring Sugar, liquor companies have realized that the adjustment period may become the new normal, with the focus of competition shifting from scale expansion to the quality of survival and how to truly cater to consumers.

After attending this year’s Spring Sugar, a liquor dealer with 20 years of experience wrote on social media, “In the cold winter, I see the spring buds.”

Famous Liquors Absent from Hotel Exhibitions

“When we arrived, there was no traffic jam, which is a rare phenomenon,” said Liu Zhanguo, deputy secretary-general of the China Alcoholic Drinks Association, during the forum, reflecting a significant change at this year’s Spring Sugar.

In the past, Spring Sugar was often divided into two parts: the hotel exhibitions scattered throughout the city and the formal exhibition halls located in specialized venues, but for liquor dealers, the former was often more valued. The hotel exhibitions mainly served the purposes of brand showcasing and recruiting, with major liquor companies’ hotel venues usually crowded. However, this year, many famous liquor brands collectively opted out, causing a decline in the hotel’s exhibition popularity.

For example, for more than a decade, Wangjiang Hotel has been the “home ground” for Guizhou Moutai, but this year, reporters observed that the core exhibition space in the hotel lobby has turned into a showcase for Xijiu. This marks the first time Moutai has missed the hotel exhibition in recent years, although it will appear at the main venue exhibition opening on March 26. Not only Moutai, but also other major liquor companies such as Wuliangye, Luzhou Laojiao, Yanghe, and Shede did not have arrangements for the hotel exhibition, with only Gujing Gongjiu still “staying behind” at Dacheng Hotel.

In contrast to the collective absence of major liquor companies from the hotel exhibition, small and medium-sized liquor companies still regard the Sugar and Wine Fair as a key opportunity for recruitment.

Jinjiang Hotel has always been a gathering place for small and medium-sized liquor companies and developing alcohol companies, with bustling crowds in previous years. This year, reporters saw that the foot traffic at the Jinjiang Hotel exhibition remained considerable, and the threshold for ordering liquor has continued to drop, with some small sauce liquor companies even offering cooperation prices as low as 25 yuan/bottle. Some liquor companies are promoting the slogan of becoming a distributor with just one case, but according to staff, most attendees are merely there to watch the excitement, with very few actually sitting down to discuss.

Reporters learned that in 2025, domestic liquor consumption continued to be sluggish, and liquor dealers were also facing sales and inventory pressures, with many not having clear selection needs or opting not to participate in the Sugar and Wine Fair this year.

Shandong liquor dealer Sheng Mintai told reporters that he has not missed the Sugar and Wine Fair for the past few years and typically visits some liquor companies in Sichuan and Guizhou after the fair, but this year, he has not planned a trip to Chengdu. The liquor business has been difficult in 2025, with sales still shrinking, and he does not plan to increase investment; moreover, skipping the Spring Sugar is also a cost-saving consideration. Many liquor dealers share similar thoughts.

A brand manager from a leading liquor company revealed that the decision not to hold a hotel exhibition this year was based on considerations of cost and efficiency. In the current internet age, information is very transparent, and recruitment work can be efficiently completed in regional markets. Additionally, the company recently held a large distributor event at the liquor factory’s location, which proved to be more targeted and effective.

Reporters noted that while major liquor companies collectively missed the hotel exhibition this year, they are simultaneously hosting large consumer marketing activities in their respective home markets, increasing investments in the consumer end.

Luzhou Laojiao has not participated in the hotel exhibition for the third consecutive year, but around the time of the Spring Sugar Fair, they will host a sealing ceremony and cellar master festival in Luzhou, including interactive activities, social gatherings, and intangible cultural heritage experiences. Shede Liquor will hold the fifth Old Liquor Festival and Spring Brewing Sealing Ceremony in Shehong County, incorporating camping, fun interactions, and cultural performances.

According to Cai Xuefei, general manager of Zhiqu Consulting, such changes at Spring Sugar are not surprising. Amid deep adjustments, the liquor industry is transitioning from the “recruitment era” to the “sales era.” Major liquor companies like Moutai and Wuliangye are gradually stepping away from recruitment-focused hotel exhibitions, shifting toward the main venue or independently hosting brand events. This change does not indicate a cooling of the industry, but rather that they have already completed their national channel layouts. The core issue now is connecting with consumers, stabilizing prices, and digesting inventory, rather than seeking new distributors.

This change is also related to the overall shift in marketing strategies among liquor companies. Since 2025, with the continued deep adjustment of the industry, liquor companies have realized that industry growth is shifting from the early “channel-driven” approach to a “consumer-driven” model, and they are all moving “toward the consumer.”

Ouyang Qianli, a researcher in the liquor industry and founder of Qianli Think Tank, believes that “C-end operations” have become the competitive norm in the liquor industry; in the future, those who better understand consumers and can help distributors share more risks will occupy a place in the market.

When Will the Industry Hit Bottom and Rebound?

The most discussed topic during the Spring Sugar Fair is undoubtedly when the liquor industry will hit bottom. After more than two years of deep adjustments, 2025 is undoubtedly the most challenging time for the liquor industry in recent years.

Recently, several liquor companies released their 2025 financial reports, maintaining the downward trend observed in the third quarter of 2025. For instance, Zhenjiu Li Du (06979.HK) reported an operating income of 3.65 billion yuan, a decrease of 48.3% compared to the same period last year; the net profit attributable to the parent company was 540 million yuan, down 59.3% year-on-year.

Jinhui Liquor (603919.SH) reported an operating income of 2.92 billion yuan, a year-on-year decrease of 3.4%, and a net profit attributable to the parent company of 350 million yuan, down 8.7% year-on-year, while still showing double-digit growth in the same period last year; Shede Liquor (600702.SH) achieved a revenue of 4.42 billion yuan in 2025, a year-on-year decrease of 17.5%, with a net profit attributable to the parent company of 230 million yuan, a decrease of 35.5% year-on-year.

Additionally, Shui Jing Fang (600779.SH), Yanghe (002304.SZ), and Kouzi Jiao (603589.SH) have also released performance forecasts indicating varying degrees of decline in net profits for 2025.

In recent market visits, reporters learned that driven by Moutai, the liquor consumption market during the Spring Festival showed slight recovery, along with some positive changes emerging in the market. For instance, after continuous declines, the core product prices of major liquor companies have shown signs of stabilization; the National Bureau of Statistics reported that retail sales of tobacco and alcohol rose by 19.1% in January and February this year, leading to optimistic market predictions.

However, as March arrived, the industry’s traditional off-season came as expected, with liquor dealers in many regions reporting recent declines in sales, with market performance falling short of previous years, raising concerns about this year’s market outlook. Discussions during the Spring Sugar Fair indicate that industry insiders generally believe that the likelihood of liquor hitting bottom this year is high, but whether a rebound will follow remains uncertain.

At the 2026 Liquor Marketing Trends Summit, Wang Zhaocheng, chairman of Shengchu Group, noted that the high growth statistics are influenced by the timing shift of the Spring Festival in 2026. However, based on the Spring Festival market and overall situation after the festival, the Spring Festival liquor market remains in a declining state, and the domestic liquor industry is still in an inertia adjustment phase. This is primarily because the impact on the market in the first half of 2025 has not fully transmitted to upstream manufacturers, resulting in a higher baseline; furthermore, the effects of alcohol prohibition policies are still not concluded.

Wang Zhaocheng predicts that by the second half of 2026, the liquor industry is expected to experience marginal improvements. On one hand, the consumption scenarios for liquor, after experiencing extreme shrinkage in mid-2025, may have passed the most severe moment. Although relaxing policies are unrealistic, the excessive panic in the market has improved, and various consumption scenarios are expected to see marginal recovery; on the other hand, industry adjustments will accelerate the elimination of small and medium brands, and the increased market concentration will benefit major liquor companies in stabilizing first, allowing the market to enter a new balance period.

From 2012 to 2014, the liquor industry experienced a downturn due to the government’s restrictions on “Three Public” consumption, but starting in 2015, driven by economic growth and consumption upgrades, the liquor industry entered a new eight-year golden growth period. However, industry insiders believe that the current bottoming of the industry does not imply that the liquor industry will follow the same trajectory as during the previous round of adjustments.

At a recent annual distributor meeting, Liu Miao, secretary of the party committee and chairman of Luzhou Laojiao Group (股份) Co., Ltd., mentioned in his speech that the era of rapid expansion for liquor has come to an end, and low-speed development or even loss of speed will become the new normal.

Insiders believe that the liquor industry previously faced cyclical adjustments, whereas now it confronts a new era. On one hand, the industries supporting domestic economic growth have changed, as previous major liquor consumers like real estate and automotive sectors have not yet recovered, while emerging industries such as chips and AI provide relatively limited support for liquor consumption; on the other hand, generational shifts in consumers have also led to changes in consumer demographics, structure, demand, and consumption scenarios, impacting the overall volume of liquor consumption.

According to data from the National Bureau of Statistics, in 2025, the production of liquor by domestic large-scale liquor production enterprises (calculated as 65 degrees, commodity volume) totaled 3.549 million kiloliters, a year-on-year decrease of 12%. Notably, starting from August 2025, there has been a continuous decline for five months with double-digit drops. Insiders revealed that this data actually reflects liquor production and sales, and its decline directly indicates market changes.

The shrinkage of the overall market volume also signifies a more brutal competition for existing stock. Tian Zhuopeng, founder of Zhuopeng Strategy, told reporters that for decades, the Chinese liquor industry enjoyed rapid growth driven by the era’s dividends, making it an era where anyone could enter. However, in recent years, the Chinese economy is at a critical stage of overcoming challenges, leading to a rapid reconstruction of the liquor industry’s landscape, making traditional models unsustainable, and the liquor industry must “pass through the narrow door” to face a new elimination round.

From Low Alcohol to New Drinking Trends

In response to the further downturn of the liquor market in 2025, mainstream liquor companies are also striving for “self-rescue,” adapting to new market changes by lowering alcohol content and appealing to younger consumers, which has become the mainstream operation in the industry.

Since 2025, various low-alcohol and ultra-low-alcohol liquors have continuously emerged in the market. Major liquor companies such as Wuliangye, Gujing Gongjiu, and Shede Liquor have launched new low-alcohol products with an alcohol content below 30 degrees, with Wuliangye recruiting G.E.M. and Shede Liquor engaging Ma Dong as brand ambassadors. Liquor companies are attempting to break the traditional image of high alcohol content, spiciness, and conservativeness in liquor through “light flavors” and more fashionable approaches, aiming to open new markets among younger consumers and female consumers.

Especially last year, various new drinking methods such as “Jing Liquor + Water Soluble C,” “Whiskey + Ginseng,” and “Fen Liquor + Red Dates and Goji Berries” became popular on social media, significantly boosting sales for related liquor companies and making the market “green with envy.” Jinpai Company reported that its revenue for 2025 is expected to reach 13.7 billion yuan, a year-on-year increase of 9.6%, with core product Jing Liquor growing over 20%.

During this year’s Spring Sugar Fair, new drinking trends were also one of the hottest topics, with multiple new drinking forums held concurrently.

“Youthfulness in liquor is an old topic,” Wang Zhaocheng noted. The challenge of youthfulness in liquor has been repeatedly discussed over the past twenty years. The industry was previously unconcerned about the youthfulness of liquor because it was influenced by the power structures of the industry and social drinking scenarios. However, the changes in industrial structure, coupled with the rise of new consumer groups, are shifting drinking scenarios from power regulation to social settings such as family gatherings and music festivals, presenting new development opportunities for new drinking trends.

The concentrated push for ultra-low-alcohol products by liquor companies has sparked a series of debates within the industry. While low-alcohol liquors can cater to the older generation’s demand for reduced alcohol intake for health reasons, if liquor companies only treat “lower alcohol” as a temporary measure to cope with channel pressures and continue traditional models, they may fall into new homogeneous competition or even dilute the long-accumulated brand scarcity and social currency attributes of high-end liquors.

Li Bo, deputy general manager of Moutai (Group) Ecological Agriculture Industry Development Co., Ltd., believes that the current changes in the liquor industry stem from shifts in consumer groups. “Comfort,” “self-pleasure,” and “health” have become mainstream consumer characteristics. Liquor companies can no longer adopt past one-way selling mindsets to create products and brands; instead, they should engage in diverse interactions with consumers.

Liu Zhanguo, deputy secretary-general of the China Alcoholic Drinks Association, also believes that traditional liquor consumption scenarios are shrinking, but new scenarios such as casual drinking and mild intoxication are emerging. Categories like fruit wine and flavored spirits are witnessing growth, and the variety of liquor consumption is becoming more diverse. However, many current consumer strategies of liquor companies are still based on existing product systems to connect with segmented consumer groups, maintaining an enterprise-centric approach. The next step should be to reverse-engineer from the actual needs of consumers to reconstruct product, channel, and pricing systems.

Accelerating AI Integration in Liquor

Since the beginning of 2026, the AI wave has swept through various industries, and during this year’s Spring Sugar Fair, AI has also become one of the focal points of the liquor industry. In the context of stock competition in the industry, liquor companies hope to enhance efficiency and reduce costs through digital intelligence.

Outside the Jinjiang Hotel, in the Sichuan Liquor red exhibition area, reporters saw that Sichuan Liquor Group showcased multiple AI applications. Among them, “Sichuan Liquor Smart Arm” is a robotic blending system for liquor; “Sichuan Liquor Smart Mirror” is software that generates exclusive marketing short videos with one click, significantly lowering content production thresholds for small and medium liquor dealers and providing lightweight brand promotion solutions for channel partners.

During this year’s Spring Sugar Fair, discussions surrounding the digital intelligence and AI of liquor heated up rapidly. At the liquor industry’s digital transformation forum held during the fair, it was learned that on one hand, advancements in AI technology are changing traditional liquor production models; on the other hand, with technological progress, the digital transformation of liquor is gradually shifting from focusing on a single technology or application scenario to more systematic linkage.

At the recent China International Liquor Expo held in Luzhou, Sichuan, a special exhibition area for liquor digital innovation was set up to showcase mature applications of AI in various fields such as brewing process optimization, quality inspection, supply chain management, and consumer profiling.

Du Jinao, vice president of a well-known domestic intelligent IoT service provider, told reporters that there is still much room for digital transformation in traditional liquor brewing processes. For instance, in intelligent grape picking, some small and medium-sized liquor factory heads told him that if they can improve the quality rate of premium liquor by 1%, they can create an additional profit of 700,000 to 800,000 yuan.

Traditionally, liquor brewing has relied heavily on traditional craftsmanship, emphasizing the stability of microbial environments and the experiential judgment of master brewers. Currently, most liquor companies still adopt manual or semi-mechanized production methods, which presents challenges such as “experience being difficult to replicate” and “process being difficult to manage.”

Reporters learned that the most critical part of liquor brewing, the liquor extraction process, often relies on the experience of master brewers to “pick and choose.” However, with the help of AI spectral analysis, intelligent grading and extraction of liquor has become feasible, achieving a 10%-15% increase in the yield rate of premium liquor through precise extraction and process control, and establishing a “digital passport” for each batch of base liquor to facilitate future production management.

At a recent industry event, Zhao Bingkun, deputy general manager of Luzhou Laojiao Co., Ltd., stated that the company is investing 12 billion yuan to build an intelligent brewing base, aiming to replicate artisan skills through data modeling and achieve a 70% improvement in production efficiency and a 10%-20% increase in the ratio of premium liquor.

According to Du Jinao, with the rapid advancement of AI technology, the liquor supply chain is also facing reconstruction, particularly as AI large models are deeply penetrating from generic capabilities into vertical fields. In the future, supply chain decision-making may evolve from “human data-driven decisions” to “AI knowledge-based autonomous decisions.”

(Article sourced from Yicai)