From 7 billion to 3.6 billion, a year of deep adjustment in the Baijiu industry—was the proactive brake by Zhenjiu Lidu worth it?

During industry downturns, a company’s choices often matter more than the data itself.

On the evening of February 27, Zhenjiu Lidu released its 2025 annual performance forecast: revenue is expected to be halved, and net profit to plummet by over 60%. While most liquor companies are under performance pressure but still striving to maintain positive growth, this nearly “knee-jerk” result from Zhenjiu Lidu instantly ignited market pessimism.

However, a closer look at the channel fabric reveals that this seemingly grim financial report may not merely reflect passive market demand contraction but also an active strategic choice to “cut away the poison.” As the industry slides from the inertia of the “golden era” into a “silver era” of stock game, Zhenjiu Lidu chose to proactively shed burdens in 2025: controlling inventory and promoting the “Ten Thousand Merchants Alliance” to reshape the channel ecosystem.

This is a strategic trade-off concerning survival quality. The question is whether this is a short-term painful bottoming rebound or an inevitable loss amid deep adjustments.

Performance Plunge: Double Impact of Cyclical and Active Inventory Reduction

According to Zhenjiu Lidu’s performance forecast, 2025 will likely be its worst ever.

The company announced that revenue for 2025 is projected to be about 3.55 to 3.7 billion yuan, down 47.7% to 49.8% year-on-year; attributable net profit is expected to be only 520 to 580 million yuan, down 56.1% to 60.6%. Adjusted net profit, which better reflects actual operations, is approaching a nearly 70% decline.

On the surface, this is a complete defeat. The reasons for the decline are clearly stated in the announcement: primarily two aspects—first, weakening demand for baijiu in the macro environment, especially reduced consumption in business, social banquets, and gift-giving scenarios; second, proactive measures taken in the second half of 2025 to reduce channel inventory and slow shipment pace.

From an industry perspective, weak demand is not an isolated case. According to brokerage research, during the 2025 Spring Festival and throughout the year, baijiu consumption showed a clear “K-shaped” divergence. Ultra-premium brands like Feitian Maotai remain resilient due to financial attributes and wealth effects; mainstream light-flavor and staple liquors priced between 100-200 yuan, driven by rigid household consumption and social gatherings, performed steadily.

The only “vacuum” zone is the mid-to-high-end price range of 300-800 yuan, which was once the mainstay of business banquets and social gifting, and the area with the biggest bubble in recent years of sauce-flavor liquor frenzy. As macroeconomic pressure mounts and business spending becomes more cautious, consumption scenarios in this price range have fractured.

Zhenjiu Lidu’s core product, the “Zhenjiu” series, happens to occupy this segment. When business banquets are replaced by more pragmatic hundred-yuan drinks or downgraded to family dinners, Zhenjiu Lidu inevitably faces simultaneous declines in volume and price.

Equally deadly is inventory.

In recent years, the prosperity of the baijiu industry largely depended on the “reservoir” function of channels. However, in 2025, this reservoir is nearly overflowing. Zhenjiu Lidu explicitly states that part of the reason for the performance decline is “taking measures in the second half of 2025 to further reduce channel inventory.”

This is a crucial signal. During industry downturns, most liquor companies tend to push inventory onto distributors to maintain surface-level prosperity. But Zhenjiu Lidu chose the opposite path—actively controlling inventory in the second half of 2025, sacrificing short-term revenue to clear channel congestion.

In the short term, this manifests as a sharp revenue decline, but logically, it is an “emergency rescue” for channel trust and a way to reduce burdens for sales recovery in 2026.

Guojin Securities pointed out during Spring Festival research that in 2026, the overall baijiu sales volume across channels during Spring Festival is expected to decline by about 10-15% year-on-year, with business scenarios remaining weak, while mass consumption remains relatively stable. Dongfang Securities also stated in a report that the core contradiction in the industry is “performance killing,” with the inventory cycle still in the latter half of passive destocking. Zhenjiu Lidu’s move is akin to removing the last straw before a snowstorm, creating space for lighter operations in 2026.

This is essentially a “profit-for-order” choice.

Ten Thousand Merchants Alliance and the Structural Breakthrough in Downstream Penetration

During deep industry adjustments, relying solely on brand power or traditional distribution systems can no longer support high growth. Zhenjiu Lidu attempts to hedge cyclical pressure through “structural innovation.”

On one hand, it reconstructs manufacturer-distributor relationships via the “Ten Thousand Merchants Alliance.” Since launching this model in 2024, Zhenjiu Lidu emphasizes profit sharing, price control, and rights payment plans to form a community of shared interests with distributors.

Data shows that after implementing this model, with its clear channel profit distribution and high-quality, cost-effective flagship product “Da Zhen,” the company rapidly enhanced influence at both ends of the BC chain. By the end of 2024, it had signed up 4,000 alliance supermarkets, contributing over 700 million yuan in receivables.

The key of this model is not scale but “order.” In the latter half of the inventory cycle, channel confidence is more important than sales volume. By reducing stockpiling and stabilizing pricing, the company aims to repair trust among manufacturers. Zhenjiu Lidu also states that some performance will be deferred and gradually realized in 2026.

In a stage where the baijiu industry shifts from “scale-driven” to “channel-profit-driven,” this long-term win-win-oriented model has strategic foresight.

On the other hand, the company actively promotes structural sinking, shifting from business scenarios to mass markets. Industry research shows that during the Spring Festival, the sales differentiation was obvious: ultra-premium and mass-priced products performed relatively better than mid-range ones. Zhenjiu Lidu has also explicitly proposed accelerating penetration into county and rural markets with sub-high-end and lower-priced products, and expanding presence in social scenes like birthday and wedding banquets.

The logic behind this strategy is that as government business demand shrinks, household consumption and daily “fast-moving” consumption are strengthening. Dongfang Securities pointed out that baijiu’s product attributes are being reshaped, with increased rigidity in family and daily consumption.

The challenge is that competition in sinking markets is fiercer, with higher price sensitivity. How brands can maintain profit margins while expanding volume will be a key test.

Industry Cycle Nearing End: Bottoming Out or New Normal?

Looking back to early 2026, this performance forecast may mark a critical point at the industry cycle’s tail.

On one hand, inventory digestion is still ongoing, and the pace of recovery in business scenarios is slow; on the other hand, top-tier high-end brands’ pricing systems are stabilizing, and channel confidence is marginally improving. Dongfang Securities believes that the first quarter of 2026 will help confirm the bottom of performance, with the sector’s driving factors shifting from transactional structure to performance certainty.

For Zhenjiu Lidu, 2025 seems more like a “strategic adjustment year.” Revenue declines by nearly 50%, but profits still remain above 500 million yuan, indicating some resilience.

The key variables in 2026 are whether its Ten Thousand Merchants Alliance can truly translate into sustainable volume growth, whether demand stabilizes in the sub-high-end segment, and whether channel inventory substantially improves in the first half of 2026.

If inventory cycle bottoms out in 2026, the proactive inventory reduction in 2025 might be reinterpreted as an “early clearance”; if demand remains under pressure, the company will face a longer-term structural transformation.

The baijiu industry has gone through multiple cycles, each reshaping the competitive landscape. For Zhenjiu Lidu, the real test is whether it can establish a more stable growth trajectory after the impulse to scale down. In the context of capital markets, this may not be a pretty performance, but it could be a more authentic baseline.