The industry is cooling down. Why is Shode always able to stabilize first?

Ask AI · How can the “Old Liquor” strategy become the secret weapon for ShuDe to cross industry cycles?

Old liquor is ShuDe Wine Industry’s most core competitive moat, and also the ballast stone that helps the company navigate and outlast industry downturn cycles.

Produced by | China Interview Net

Reviewed by | Li Xiaoyan

In 2025, the baijiu industry entered a deep adjustment cycle. Multiple pressures—soft market demand, high channel inventory, and volatility in the price system—intertwined, bringing the industry growth with unprecedented challenges. In such a macro environment, ShuDe Wine Industry (600702), leveraging a forward-looking strategic layout, unwavering resolve in its old liquor strategy, and flexible market adjustment tactics, delivered a notably resilient annual performance. According to the annual report data, the company’s revenue and net profit declines narrowed significantly, its operating “base platform” became more solid over time, the mass liquor segment grew against the trend, e-commerce channels achieved explosive breakthroughs, and with continued deep cultivation of its long-term old liquor strategy, ShuDe Wine Industry not only stabilized its fundamental growth during the industry shakeout period, but also built up growth momentum to power its journey through the cycle—showing strong risk resistance and long-term development potential of a high-quality liquor enterprise.

Facing the dual pressures of periodic industry adjustments and a sluggish consumer market, ShuDe Wine Industry did not respond passively; it laid the groundwork in advance and actively sought change. Even before the industry’s deep adjustment period, it launched a “controlling volume while stabilizing prices” strategy, focusing on channel health and price stability. This forward-looking layout produced notable results in 2025. In 2025, the company achieved revenue of RMB 4.42B, and net profit attributable to shareholders of listed companies of RMB 223 million. For both key indicators, the year-over-year decline narrowed significantly versus the previous year, clearly signaling a positive shift as operations build a foundation and rebound—marking that the company’s earlier adjustments have begun to show effects, with its overall development trend gradually improving.

Meanwhile, ShuDe Wine Industry’s internal management also saw standout results in quality improvement and efficiency gains. In 2025, management expenses decreased by 12.39% year over year. Through refined operations and optimized resource allocation, the company effectively controlled operating costs and further improved operating efficiency. By year-end, the company’s total assets rose to RMB 12.62B. Its asset scale expanded steadily, its operating base platform continued to be strengthened, and it laid a firm financial foundation for future development. Particularly worth noting is that, against the backdrop of widespread industry pressure and most liquor companies cutting dividends, ShuDe Wine Industry still maintained a high level of sincerity toward investors. It rolled out a cash dividend plan of RMB 3.1 per 10 shares (including tax). The payout ratio reached 45.67%, and it has exceeded 40% for three consecutive years. Over the three years, cumulative cash dividends were nearly RMB 1 billion. This impressive dividend response not only reflects the company’s tangible actions to reward investors, but also conveys to the market its steadfast confidence in its long-term development, further confirming the soundness of the company’s operating fundamentals.

Of course, it is undeniable that the broader environment of the industry’s deep adjustment still brings ShuDe Wine Industry staged operating pressure. Revenue and net profit have not yet returned to a positive growth track, clearing channel inventory and consumer spending recovery still require some time. These are also neutral challenges faced by baijiu companies across the industry. But compared with the overall industry performance, ShuDe Wine Industry adjusted faster and delivered more obvious results. A research report from Huatai Securities pointed out that the company’s current adjustment has entered the second half. Inventory clearing is nearing the end, and as consumer spending capacity recovers gradually, profitability is expected to continue improving.

In the two core segments—products and channels—ShuDe Wine Industry accurately captured market trends and launched a “product structure optimization + channel upgrade and expansion” combination strategy. This enabled the mass liquor segment to move upward against the trend and drove explosive growth in emerging channels, becoming a major highlight during the industry adjustment period.

On the product side, ShuDe Wine Industry built its layout across the full price range, optimized its product matrix, and formed a healthy pattern of using high-end products as benchmarks while keeping mass products stable. On one hand, it anchored high-end value with “Cangpin ShuDe 10 Years,” continuously strengthening the price stability of its core big single product “Pinwei ShuDe,” accelerating inventory digestion, and maintaining the fundamental position in the mid-to-high-end market. On the other hand, it sharply seized market opportunities as mass consumption shows priority recovery, and fully pushed the brand of the Tuo Pai. It is positioned as a benchmark mass-market famous liquor with high cost-effectiveness. In 2025, the ordinary liquor business centered on Tuo Pai achieved revenue of RMB 733 million, up 5.75% year over year—reaching a new high for ordinary liquor revenue in recent years. Among them, the strategic big single product Tuo Pai Teji T68 maintained rapid growth across sell-through, bottle-opening rate, and shelf placement rate; sales of ShuDe Celebrations doubled; “Shu zhi dao” (Way of Shu) delivered double growth in sell-through and bottle-opening. The mass liquor segment became an important support for the company’s performance, effectively offsetting market pressure brought by industry adjustments.

On the channel side, ShuDe Wine Industry adhered to the approach of “focusing on the main business, streamlining for efficiency, and expanding emerging channels.” On one hand, it optimized and upgraded traditional channels by focusing on base markets and key markets, withdrawing low-efficiency and overlapping distributors, and promoting a transformation of channel structure toward higher efficiency and precision. While the distributor team was somewhat simplified, its quality and operating efficiency improved significantly. On the other hand, it kept pace with changes in consumption trends and focused on emerging channels such as e-commerce, key customers (“yaoke”), private domain, and KA. It built an internet marketing system in advance featuring “one increase, two optimizations, and four enhancements.” With the momentum built up over time, in 2025 the company’s e-commerce sales revenue reached RMB 604 million, up 35.46% year over year, successfully breaking through the previous platform phase of around RMB 400 million, while maintaining a high gross margin level. E-commerce became a core engine for channel growth. Liquor analyst Cai Xuefei commented that ShuDe Wine Industry’s performance outperformed the industry overall. Its nationwide layout, management efficiency improvement, full-price-range production capacity layout, and innovative marketing have allowed operating indicators to remain in the industry’s forefront for the long term. The company’s early adjustment operating strategy will help it seize first-mover advantages amid industry “involution.”

Old liquor is ShuDe Wine Industry’s most core competitive moat, and also the ballast stone that helps the company navigate and outlast industry cycles. In the face of short-term fluctuations in the industry, ShuDe Wine Industry has always maintained strategic resolve—steadfastly deepening the old liquor strategy—and continuously increased investment in base liquor production capacity and storage energy building, laying a foundation for long-term high-quality development.

Since 1976, ShuDe Wine Industry has adhered to a liquor storage mechanism of “prioritizing high-quality base liquor for retention in every batch.” Decades of accumulation have ensured that the company’s old liquor reserves have remained among the top positions in the industry. By the end of 2025, the company’s inventory of semi-finished liquor (including base liquor) reached 182k kiloliters, once again setting a historical record high. This massive reserve of old liquor provides an irreplaceable core resource base for improving product quality and innovating the product matrix. To further reinforce its old liquor strategy, ShuDe Wine Industry launched a capacity expansion project with a total investment of RMB 7.05 billion in 2022. This is not a short-term follow-the-trend expansion during an industry upcycle, but a cross-cycle long-term layout anchored in the old liquor strategy. The project plans to use land of approximately 1,774 mu (about 118.3 hectares). After completion, it will add an annual production of base liquor of about 60k tons, old liquor storage capacity of 342.5k tons, and qu (daqu) fermentation capacity of 50k tons. The expected average annual net profit is RMB 1.32 billion.

As of August 2025, 13 sub-projects under this initiative have been completed. Core facilities such as the Longchi ecological brewing workshop have been built and put into operation. It added 50k tons of annual qu production capacity, more than 3,300 cellars, and old liquor storage energy of more than 250k tons. The advantages in both production capacity and storage capacity have been further expanded. Although staged investments in the project caused some short-term disruption to operating cash flow in the current period, in the long run this layout locks in a time window for the old liquor industry, strengthens the company’s irreplaceable resource advantages, and provides persistent momentum for future market competition and performance growth—allowing the old liquor strategy to truly become the core support enabling the company to progress steadily and go far.

While sticking to the core old liquor strategy, ShuDe Wine Industry actively aligns with consumption upgrades and market changes, and takes multi-dimensional actions across product innovation, brand building, and ecological coordination—continuously expanding growth boundaries and releasing new development momentum.

In terms of product innovation, the company continuously comes up with new offerings to build differentiated competitive advantages. From the ShuDe China Wisdom series launched during the Chunghs Cup (Chunxiang) period, to the Tuo Pai “Yun” series, to mass-market bright-bottle liquor new products such as Tuo Pai Pure Grain and “Ju Qin” market product Tao Zui 5, and then to the industry’s first low-alcohol easy-to-drink “old liquor” at 29 degrees, “ShuDe Zi Zai,” ShuDe Wine Industry keeps refining its product matrix, covering different consumption scenarios and consumer groups. Among them, “ShuDe Zi Zai” targets the “treat yourself” needs of younger consumers. It uses 6-year base liquor blended with 20-year and 30-year high-end seasoning liquors, filling the blank in the low-alcohol old liquor sub-segment. After launch, it rolled out more than 1,000 outlets online and won multiple awards, successfully expanding the boundaries of old liquor consumption. During the Spring Festival period in 2026, end-inventory for products under ShuDe accelerated in clearing out, and the bottle-opening rate achieved double-digit growth, successfully delivering a strong start for the new year. Continued improvement in market recognition for the products has been observed.

In brand building, ShuDe Wine Industry deepened the “old liquor + culture” connotation, built an IP matrix for the “ShuDe Wisdom Person” series, and worked with celebrities to execute major marketing events. It refreshed the brand spirit of “In this era, ShuDe is needed,” strengthening emotional resonance with consumers. At the same time, it actively promoted brand internationalization. The ShuDe Old Liquor Festival entered overseas markets; Tuo Pai’s intangible heritage techniques were showcased at the headquarters of UNESCO. The brand’s influence continued to rise. Relying on Fosun’s ecosystem resources, ShuDe deeply connected with high-end entrepreneurs’ communities, held activities such as the Old Liquor Festival and the Sealing Ceremony, strengthened recognition of brand value, and stabilized partners’ confidence in channel cooperation. In addition, in 2026 the company will fully empower the Night Lang Gu brand. Leveraging year-aged old liquor to build differentiated competitive strength will further improve the industrial layout and help enhance overall performance.

After being refined through the industry adjustment cycle, ShuDe Wine Industry, through forward-looking strategic adjustment, solid old liquor reserves, and flexible market response capabilities, achieved a significant improvement in operational resilience, and signs of a performance bottom gradually emerged. From controlling volume and stabilizing prices to channel reinvention; from mass liquor breakthroughs to e-commerce takeoff; from deep cultivation of old liquor to product innovation—ShuDe Wine Industry has held to its core strategy through long-termism, addressing short-term challenges with pragmatic measures. During the baijiu industry’s reshuffling process, it has built a unique competitive advantage. In the future, as industry consumption recovers step by step, channel inventory is fully cleared, and combined with the long-term value release of the old liquor strategy and continued growth of emerging businesses, ShuDe Wine Industry is expected to accelerate its exit from the adjustment cycle and open a new chapter of high-quality growth. It will occupy a more important position in the new landscape of the baijiu industry.

Personal opinion, for reference only