张裕“向新而生”：葡萄酒龙头的绝地突围

For China’s domestic wine industry, 2025 was nothing short of a “darkest year.” Data from the National Bureau of Statistics show that production by above-scale domestic wine enterprises fell to 97,000 kiloliters, a 17.1% year-on-year decline. General Administration of Customs figures reveal that imports of bottled wine in containers of 2 liters or less dropped to approximately 133,000 kiloliters, a 19.6% decrease. During a shareholder meeting, Sun Jian revealed that the number of wine bottles opened daily across the industry had fallen from 1.04 million the previous year to just 840,000.

Excluding Changyu, the remaining 10 listed wine companies posted total revenue of RMB 1.032 billion, a year-on-year drop of 19.8%. Among them, two new companies were designated as Special Treatment (ST), bringing the total to three ST firms, one was delisted, and the group recorded a combined loss of RMB 299 million.

Looking at a longer cycle, Sun Jian offered comparative data: China’s baijiu market has fallen 47% from its 2016 peak, beer has dropped 30% from its 2013 peak, but wine has cratered 93% from its 2011 high—leaving only 7% of that peak volume. Changyu’s revenue has been cut in half since its 2012 high.

Yet, amid this deep freeze, the atmosphere at Changyu’s 2025 Annual Shareholder Meeting, held on May 22 at the Changyu Wine Culture Museum in Yantai, was distinctly different. Zhou Hongjiang rated the company’s performance the previous year as “unqualified,” while Sun Jian presented a clear blueprint for “transformation through innovation,” showing shareholders how this century-old enterprise intends to break out.

The Industry Is No Longer on the Suzhou River, But the Huangpu River

At the shareholder meeting, Sun Jian used a vivid metaphor to capture the current market dynamics of China’s alcoholic beverage sector. He observed that the Suzhou River flows slowly—advancing 10 meters takes 60 seconds. In contrast, the Huangpu River runs fast—10 meters in just 8 seconds. “We are no longer facing the Suzhou River; we are facing the Huangpu River,” Sun said. “Rowing upstream against the current in the Huangpu River is futile, even if you exhaust all your strength. But if you row aggressively downstream, the boat will move very fast.”

Changyu management’s analysis of target wine consumers shows structural shifts among three groups. Government banquet consumption has been largely eliminated. Business entertainment consumption has significantly decreased in both frequency and spending. Mass-market consumption has also declined due to economic pressures, but it remains the most resilient, though consumption habits and occasions are still nascent.

Sun also used baijiu as a reference. Excluding Moutai, Wuliangye, and Fenjiu, the remaining 18 listed baijiu enterprises saw total revenue fall 24% in 2025, with profits down 43%. In the first quarter of 2026, those 18 companies’ revenues were still down 19% year-on-year, with profits dropping 26%. “The scale of baijiu is nearly 100 times that of wine,” he noted, “and its dominance at the dining table is crushing. This persistent downward trend warrants our serious reflection.”

Against this backdrop, Changyu management chose not to blame external factors. Sun admitted the company’s performance the previous year was only mediocre, with the fundamental problem being that “growth in innovative businesses could not offset the decline in traditional operations.” In 2025, innovative businesses accounted for only about 3% of revenue, providing insufficient support, while traditional businesses underperformed amid the overall downturn. For 2026, Changyu’s basic forecast is “continued pressure, with a low probability of improvement.”

“Maintaining the Core with Innovation”: Four New Products to Rebuild Growth

Facing severe conditions, Changyu established a strategic direction of “maintaining the core with innovation” at a board special meeting in the second half of last year. Sun emphasized, “Even when we maintain the core, we must do so using innovative methods. Using old models won’t even defend the base.”

This innovative thinking is embodied in four differentiated products:

• Duolingli BBQ Wine: Specifically crafted for barbecue settings. Sun noted that barbecue restaurants are one of the few food and beverage segments in China unaffected by the economic downturn. With 520,000 BBQ eateries nationwide, “this mass-market, lively scene is worth cultivating.” Duolingli is already being rolled out in select markets; for example, nine sales staff have been assigned to target 100 BBQ restaurants in Beijing’s Shijingshan district.

• Longwei Mao White Wine: Since its launch in August 2025, sales have exceeded RMB 90 million, with over RMB 60 million from online channels. Sun said that after building online momentum, the brand will target 350,000 river-fish and seafood restaurants, leveraging white wine’s ability to “enhance freshness and remove fishiness.” Brand endorser Yu Shi has generated 900 million views in social media interactions with Changyu.

• Xiong Siling Juice Wine: A complete departure from traditional wine, this product contains over 59.9% pure fruit juice plus 40% pure wine, with 4.5% ABV, slightly sparkling, and served chilled. Sun explained that the initial focus is online; once brand awareness is established, it will enter the hot pot restaurant channel. With over 400,000 hot pot restaurants nationwide, “Xiong Siling’s flavor profile is a perfect match with the spicy, numbing heat of hot pot.”

• 1931 Cabernet Gernischt Refresh Small Bottle: This 95-year-old heritage brand now offers a small-bottle, screw-cap version. “No decanting needed, just twist and drink,” designed to expand consumption occasions, including solo drinking, camping, picnics, and quiet small gatherings.

Sun closed this section with a military analogy: “To use the language of taking a city, we must ‘rip open a gap, swarm in, surround and cut off, then fully occupy.’” The goal is to break the current 97% traditional to 3% innovative business ratio. “We strive to raise the share of innovative businesses to 10%, 20%, 30%, or even 50%.”

Organizational Transformation: From Managing Distributors to Serving Consumers

Sun admitted innovative businesses face two major challenges. First, teams must transform into “frontline, consumer-facing” operators. “I believe most team members can make the transition, but some will voluntarily surrender.” Second, the distributor network is misaligned with the channel needs of new products. “Perhaps only 30% or fewer of our partners can adapt quickly,” requiring a rebuilt ecosystem.

To address this, Changyu is implementing a sweeping organizational restructuring:

• Reducing personnel who manage and serve distributors from 1,000 to about 200, focusing solely on recruitment, maintenance, pricing, inventory, and distribution. Freed-up staff will shift to consumer-facing roles.

• Introducing a “piece-rate” compensation system modeled on delivery couriers. For BBQ restaurant promotion, for example, compensation is directly tied to time spent and results. “If a BBQ restaurant stays open until midnight, our in-store marketing managers need sufficient incentives to be there.”

• Recruiting a new retail director from a well-known beer brand. Since early March, 16 new retail systems have been deployed, entering 16,110 new stores.

• Establishing an innovation business unit alongside the existing e-commerce unit, launching pilot offline markets in several provinces to rapidly test new brands and models.

Zhou Hongjiang added during the investor Q&A: “This year, the company is making a major shift: separating ‘marketing’ from ‘sales.’ More people will focus on marketing; fewer will manage distributors. Changyu’s chairman and general manager must first be marketing managers. If they cannot do that, they are unqualified and have no future.”

Converting Buzz into Sales

Since early 2026, Changyu has experienced a series of brand breakout moments. Sun listed: French President Macron praising Changyu’s Longyu at the Paris wine fair, Donald Trump making an exception to drink Changyu’s Château Changyu AFIP Global, Vladimir Putin drinking the same on multiple visits to China, along with influential social media figures and俞敏洪 (Yu Minhong) showing enthusiasm for Changyu products. “This string of high-profile endorsements and celebrity buzz has generated tremendous momentum for us.”

On converting that buzz into sales, Sun said offline operations must maximize their take-up. “As long as we go deep in one city—either don’t do it, or do it thoroughly—we can capture that buzz well.” Zhou shared a concrete result: “The effect from the influencer Wulala was excellent. After his video went viral, the e-commerce operator responsible for our ‘Man 40’ sales has already sold as much in 2026 as in all of last year, and their confidence has soared.”

Zhou also noted that after Macron praised Longyu, at the Changyu 1892 experience store in Yantai’s airport, “I saw travelers specifically asking to buy the same wine Macron had.” After Château Changyu AFIP Global Chardonnay was served to Trump and Putin as a state banquet wine, “it became the top-selling dry white wine on JD.com.”

Long-Term Financial Discipline

On financial strategy, Changyu has adopted a strict “no unnecessary investment” policy. “For the next several years, we will stick to this principle,” Sun said. In the past three to five years, annual investment averaged about RMB 50 million, much of it for essential items like oak barrels. Current annual depreciation is about RMB 310 million. “In theory, as long as annual investment doesn’t exceed depreciation, it’s relatively safe.” But given the current environment, the priority is getting more output from existing assets. “So we must absolutely avoid unnecessary investment.”

He further proposed making 2026 a “year of cost reduction,” aiming to cut at least RMB 10 million in expenses, with managers’ compensation tightly linked to those targets.

Closing Remarks: Confidence, Reform, Innovation, and Discipline

In his closing comments during the shareholder Q&A, Zhou Hongjiang frankly stated that the company’s 2025 performance “was unqualified—a failing grade. We ourselves are dissatisfied with the results.” In response to the crisis, he outlined several measures: company-wide, all-hands marketing; “putting customer first as the top priority”; controlling costs and cutting non-essential investments; simplifying processes for faster response; and most importantly, innovation.

He shared four key messages from his internal management report:

1. Stay confident and not discouraged. “As a century-old company, we still have many cards to play—not just wine, but also brandy.”

2. Push reform without hesitation. Production and management positions will be filled only through retirement, not new hires. New hires will be in marketing. “Our new retail head was recruited externally. For Xiong Siling, we hired a woman in Shanghai to lead online marketing. We are opening the door.”

3. Keep innovating while maintaining the core. “Even when we preserve the core, we do it with innovative methods.”

4. Hold the bottom line unwaveringly. “Our debt ratio is the lowest in our history—below 12%—which protects our operations and cash flow.”

He concluded with optimism: “I believe that with your support and concern, when we meet again next year, we will all be happy.” He also asked shareholders to stay engaged: “Whether you complain or grumble, we will listen. If we are wrong, we will correct it. If not, we will take it as encouragement.”

A Path Forward for China’s Wine Industry

China’s wine industry remains in a deep restructuring phase. With industry production down 93% from its peak, Changyu’s strategic choices—from “rowing upstream” to “rowing downstream,” from “managing distributors” to “serving consumers,” and from traditional products to occasion-driven innovation—are charting a potential breakout path. Whether this path succeeds will depend on Changyu’s ability to convert the brand momentum it has built since early 2026 into scalable growth in innovative businesses, thereby breaking the unbalanced 97-to-3 ratio between traditional and new operations.

As one shareholder put it during the Q&A session: “Changyu’s struggles are not permanent.” Management’s response, summed up in four Chinese characters—向新而生 (transform through innovation)—is to bet the future on that belief.