Moutai enters top ranks of FMCG companies

Baijiu maker Kweichow Moutai has been named one of the top 50 FMCG companies after increasing sales by 25% last year.

Moutai increased sales by 25% last year

Kweichow Moutai was the only new entrant in OC&C Strategy Consultants’ FMCG Global 50 2019 list, which ranks groups according to their FMCG revenues, then evaluates them on broader performance metrics.

Moutai recorded the highest sales growth of any other company in the list, occupying the 46th spot. It was identified as a ‘star player’ thanks to its strong sales growth and profitability improvement of 4%.

The report listed Diageo in 24th place, LVMH in 31st and Pernod Ricard in 41st.

According to OC&C, Moutai’s growth follows a price increase for its core baijiu product and a new marketing push to “position the brand as the go-to premium drink for festive and business events”. In addition, the distiller expanded its availability in small retailers and online channels.

OC&C said the rise of Chinese groups such as Moutai in the top 50 signifies a “long-term trend”. Over the last decade, the number of Asia-based companies in the Global 50 list increased from seven to 13, while the number of Chinese firms grew from zero to five.

Despite its slowing economy, China’s food and drink sector is “growing at nearly double the rate of its global peers”, according to OC&C.

The consultancy said this is due to three reasons: an emerging middle class in tier three and tier four cities, which have been “overlooked by western brands”; substantial investment in innovation; and expansion into emerging markets.

OC&C said there is “no doubt” more Chinese firms will enter the Global 50 list in the coming years, but they will struggle to increase profitability due to domestic competition and “downward pressure on margins”.

Moutai was also named the world’s most valuable spirit brand in Brand Finance’s recent Spirits 50 2019 ranking, in which baijiu brands dominated the top four places.