Table of Contents

• National liquor of China
• How to drink Moutai
• History of Moutai
• Brand awareness
• Bellwether stock
• High prices
• Challenges and risks
• FAQ

National liquor of China

Moutai, the national liquor of China, is a force to be reckoned with in the global beverage industry. This high-proof spirit, with its distinct fiery taste, has become a symbol of Chinese culture and a status symbol among the country’s elite. Moutai’s journey from a local specialty to the world’s most valuable liquor brand is a testament to the company’s strategic prowess and the enduring appeal of this unique Chinese spirit.

How to drink Moutai

Moutai is typically consumed in small, five to six-milliliter glasses, a reflection of its potent 53% alcohol content. This small serving size allows drinkers to savor the spirit over the course of a long banquet, complementing the various dishes served. The ritual of sipping Moutai has become an integral part of Chinese cultural traditions, particularly in formal settings and diplomatic events.

History of Moutai

Moutai’s roots can be traced back to the Chinese Civil War in the 1930s, when communist soldiers on the run sought refuge in a village in Guizhou province, where the liquor is produced. The soldiers reportedly used Moutai to soothe their blistered feet after trekking thousands of miles, cementing the spirit’s status as the drink of choice among the Communist Party leadership, including Premier Zhou Enlai, who toasted President Nixon with Moutai during his historic visit to China in 1972.

The brand’s association with pivotal moments in Chinese history has contributed to its unparalleled brand awareness, making it a coveted status symbol among the country’s elite. Moutai’s unique history has solidified its position as the drink of diplomacy, with former Secretary of State Henry Kissinger famously stating, “If we drink enough Moutai, we can solve anything.”

Brand awareness

Moutai’s brand awareness is unrivaled in China, where it is deeply intertwined with the country’s cultural and political history. The spirit’s reputation as the drink of choice for the elite and powerful has made it a must-have item at weddings, political banquets, and other high-profile events. This exclusivity and prestige have contributed to Moutai’s enduring popularity and its status as a symbol of wealth and status.

The brand’s prominence has also extended to the auction world, with Sotheby’s hosting its first Moutai-themed auction in 2022. The auction house’s auctioneer, Paul Wong, noted that 80% of Moutai consumers purchase the spirit to drink, while 20% see it as a safe investment, recognizing the brand’s potential for long-term value appreciation.

Bellwether stock

Moutai’s significance extends beyond its cultural and social impact; it is also considered a bellwether stock in the Chinese equity market. Fluctuations in Moutai’s share price are closely watched by investors, as they can have a ripple effect on the broader Chinese stock market. The company’s stability and consistent high demand, even during the COVID-19 pandemic, have contributed to its status as a safe haven for investors.

The government’s interest in maintaining the stability of Moutai’s share price is also a key factor in its resilience. As one expert noted, “It’s sort of not in the official’s interest or in the investor’s interest, to be honest, to let Moutai share price fluctuate that much.”

High prices

Moutai’s high prices are a result of its scarcity and the lengthy production process. The liquor can only be made in a specific village in Guizhou province, and each bottle requires at least five years to produce, using a unique type of red sorghum and a nine-time distillation process. This limited supply and meticulous production method contribute to the spirit’s exclusivity and premium pricing, with the cheapest bottles costing around $350 and vintage bottles fetching tens of thousands of dollars at auction.

The importance of Moutai to the local economy is underscored by a seven-story statue resembling a Moutai bottle, which stands as a symbol of the company’s significance to the Guizhou region, where the GDP per capita is more than four times the national average.

Challenges and risks

Despite Moutai’s dominant position in the Chinese liquor market, the company faces several challenges as it seeks to maintain its growth and expand its global reach. One of the primary concerns is the shift in consumer preferences, particularly among younger Chinese consumers, who may be less inclined to splurge on expensive bottles of Moutai in the face of a weakening economy.

To address this, Moutai has launched new marketing campaigns and product collaborations, such as Moutai-infused ice cream and chocolate, in an effort to appeal to a younger demographic. However, these ventures have had mixed success, as some consumers have found the taste of these products to be less than satisfactory, potentially hindering their willingness to purchase the premium-priced spirit.

Another challenge for Moutai is its limited global recognition. While the company has expanded its presence to over 70 countries, the brand remains relatively obscure outside of China, with many international consumers unfamiliar with its unique taste and cultural significance. Moutai’s success in becoming a global household name will depend on its ability to effectively market and educate consumers about the spirit’s rich history and distinctive qualities.

FAQ

• What is Moutai? Moutai is the national liquor of China, a high-proof spirit with a distinct fiery taste that has become a symbol of Chinese culture and a status symbol among the country’s elite.
• How is Moutai consumed? Moutai is typically consumed in small, five to six-milliliter glasses, allowing drinkers to savor the spirit over the course of a long banquet or formal event.
• What is the history of Moutai? Moutai’s roots can be traced back to the Chinese Civil War in the 1930s, when communist soldiers used the liquor to soothe their blistered feet. The spirit’s association with pivotal moments in Chinese history has contributed to its unparalleled brand awareness and status as the drink of diplomacy.
• Why is Moutai so expensive? Moutai’s high prices are a result of its scarcity and the lengthy production process, which requires at least five years to produce each bottle using a unique type of red sorghum and a nine-time distillation method.
• What challenges does Moutai face? Moutai faces challenges in appealing to younger Chinese consumers who may be less inclined to splurge on expensive bottles, as well as expanding its global recognition, as the brand remains relatively obscure outside of China.

Moutai’s journey from a local specialty to the world’s most valuable liquor brand is a testament to the company’s strategic prowess and the enduring appeal of this unique Chinese spirit. As Moutai navigates the challenges of changing consumer preferences and global expansion, its continued dominance in the liquor industry remains a testament to the power of a well-crafted brand and the allure of China’s national liquor.

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