In a market overflowing with giants, the rise of an obscure distillery tucked away in a small city in Hubei has captivated the attention of the Chinese liquor industryIt all began with the memorable line, "Though Jinjiu is delightful, don’t indulge too much!" This marketing slogan heralded the ascent of a company that has managed to carve its niche in an industry dominated by household names.

For quite some time, however, the health wine market has been constrained, valued at over 300 billion yuan yet stunted by slow growth and fierce competitionThis environment proved inadequate for Wu Shaoxun, the ambitious leader behind JinjiuTo satiate his desire for expansion, he unveiled the Mao Pu brand in 2009, taking the Mao Pu buckwheat wine from Hubei to a national audienceThis brand ultimately evolved in 2022 to introduce a more upscale herbal vintage series.

From its inception as a health wine, Jinjiu has continuously led the industry

While amassing wealth, Wu Shaoxun has empowered himself to instigate a comprehensive investment strategy that stretches across various sectors including pharmaceuticals, mining, real estate, and finance—quietly establishing himself as the “invisible tycoon” of the liquor sector.

Driven by an eye on the future, Wu has mapped out long-term plans for the Jinpai company, projecting sales of 80 billion yuan by 2042 and 100 billion yuan by 2053. These lofty ambitions could not be realized through health and liquor alone, motivating the company to make substantial investments into sauces and liquors starting in 2015, preparing to initiate a grand breakthrough by 2027.

Wu Shaoxun’s journey is reminiscent of the ancient wisdom of Xu Xiake, whose poetry suggests, "Even if fate does not favor you, you can still scale Kunlun alone." Indeed, Wu has embodied this philosophy

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In the early 1980s, he was assigned to a state-run winery in his hometown of Daye, Hubei, after serving in the militaryThis winery, established in 1953, primarily produced light aromatic liquor.

A child of humble beginnings from the countryside, Wu valued this opportunity greatlyHis military experience fortified his resilience and practicalityWithin just seven years, he climbed the ranks from a common worker to factory managerAt that time, the liquor industry was in its nascent stage, akin to the localized beer markets where competition revolved around regional brands.

As a wave of brands like Fenjiu, Wuliangye, and Moutai transformed the market landscape through national expansion, smaller local distilleries began to struggleWu took over a winery amid dire conditions: each sold bottle came with a loss of 20 cents, pushing it closer to bankruptcyA chance encounter during a business trip unveiled a significant opportunity—observing that many enjoyed mixing liquor with medicinal herbs, he envisioned a pathway forward.

The winery had previously dabbled in the tonic liquor business and experimented with various products like Lian Gui tonic and Chang Shou wine

Borrowing a formula from Li Xueli, a Chinese medicine family from Malaysia, Jinjiu was born in 1989 and heralded the concept of "health wine" to the Chinese market.

To break through, Wu ventured into the realm of high-stakes advertising by placing Jinjiu on CCTVThe charming slogan, introduced in a 1993 commercial featuring Jiang Kun, helped propel the brand to great heightsFrom a modest local distillery, Jinjiu emerged onto the national scene successfully.

However, as the health wine segment began to solidify its place in the market, Jinpai attempted to dip its toes into the conventional liquor sector, investing millionsUnfortunately, their venture into Wanjin liquor faced significant competition and capacity limitations, prompting a swift retreatFurthermore, market dynamics continued to evolve, revealing a clash between market-oriented strategies and company regulations.

In 1997, following reforms making the company a shareholding cooperative, Wu orchestrated a buyback of shares to restore private ownership

With these structural challenges addressed and a swift economic rise stimulating demand in the health wine market, Jinjiu found itself accelerating—surpassing 1 billion yuan in sales by 2006 and exceeding 10 billion yuan by 2017, solidifying its dominance in the health liquor market.

Despite retaining its position at the forefront of Chinese health liquor, Jinjiu’s path was not without complicationsCompared to the entire liquor industry, the health wine sector presents a narrow scope of opportunities and slow growthAccording to Zhiyan Consulting, the health wine market was valued at 258.5 billion yuan in 2015, growing slowly to 337.6 billion yuan by 2021, with an anticipated modest rise to 377.15 billion in 2023.

Health wines typically target middle-aged and older demographics and have a limited audience and usage scenarios, with a price point averaging merely 20 yuan, significantly lower than the 60 yuan average of white spirits

Jinjiu’s approach in the market employed strategies akin to fast-moving consumer goods, pouring significant resources into marketingHowever, this mix of hefty expenses and low-profit margins severely hampered profitability compared to larger liquor tycoons.

In an assessment made by Wu in 2023, he reported that Jinjiu’s production capacity exceeded 150,000 tons with over 600,000 tons in stock—yet these figures had not been translating into sales resultsIn the wake of this realization, Jinjiu rolled out a line of premium products including blue and gold-label varieties, but efforts to shift market dynamics proved challenging.

The health wine sector remained fiercely competitive, facing national rivals such as Ye Island Lucai liquor, Hongmao medicine liquor, and Bamboo Leaf Green, in addition to regional brands like Zhizhonghe and Ningxia RedThus, as the company strove for growth and enhanced profitability, it pivoted its focus toward synergizing health wine with the broader liquor market through herbal liquors, recognized as a niche sector within the industry.

Since venturing into herbal liquor production in 2002 and launching the Mao Pu series in 2009, the company upgraded in 2022 to introduce a certified vintage herbal liquor

The positioning of Mao Pu garnered a consumer base larger than that of Jinjiu, expanding opportunities for engagement and enhancing price points while maintaining a consistent health-focused narrative between both brands.

However, it is prudent to contemplate the notion that few genuinely believe alcohol contributes to wellnessThe concept of "health" merely suggests reducing bodily burdens during consumptionAcknowledging that the market for herbal liquors is substantively larger than that for health wines, data disclosed by Jinjiu highlights exponential growth in Mao Pu sales—surging from a relatively humble 12.6 million yuan in 2013 to over 5 billion by 2022, contributing significantly to the company's overall revenue.

During the period from 2017 to 2022, while Jinpai’s annual income stabilized around the 100 billion mark, the sustained growth of the Mao Pu line illustrated the pressing need for innovation within Jinjiu’s repertoire

Nevertheless, the herbal liquor market features its own complexities, as competition with major liquor corporations intensifies significantly—battles waged not just within subcategories of health liquor but across the spectrum, directly challenging Jinjiu’s offerings.

In recent years, private enterprises such as Gujing Gongjiu sparked increased interest in the liquor sector after local firms like Langjiu and Guotaijiu launched IPOsAmid this bustling environment, Wu Shaoxun remains the most discreet yet significant presence among the new wealth, preserving the title of "invisible tycoon" through his understated successes.

In August 2024, at a gathering with distributors, Jinjiu revealed sales figures of 13.05 billion yuan for its liquor division over the year from July 2023 to June 2024—a 14.81% increase year-on-year—while reporting a 27.66% rise from January to July 2024. From these figures, it is evident that Jinjiu is once again capitalizing on new channels and innovative products, revitalizing its growth trajectory through premiumization and modern marketing strategies.

Positioned within the broader Chinese liquor sector, Jinjiu ranks among the prominent players, situated just behind titans like Moutai and Wuliangye, yet comfortably between Gujing Gongjiu and Jinshi Yuanyuan

Should Jinjiu decide to go public, its valuation could be estimated at approximately 60 billion yuan, while rivals like Langjiu anticipate valuations that soar into the hundreds.

While Langjiu boasts personal holdings amounting to 70%, Jinpai remains under Wu Shaoxun’s stewardship, controlling 99.004% of the company’s shares, maintaining its status as a family-owned enterpriseMore crucially, the liquor sector represents merely one facet of Wu’s multifaceted venturesOver the years, leveraging the synergies offered by his health and herbal liquor businesses, he fostered the development of a traditional Chinese medicine line.

In 2011, Jinpai Biotech was founded, later rebranding as Zhizheng Tang in 2019, which extends its operations into traditional herb formulation, proprietary medicine, health foods, and plant extractsIf Jinjiu, Mao Pu, and Zhizheng Tang symbolize Wu Shaoxun’s immediate successes, the expansive investment portfolio envelops his underlying strength.

Following wealth accumulation from Jinjiu and Mao Pu, Jinpai ventured into diverse sectors such as pharmaceuticals, mining, real estate, commerce, hospitality, cultural tourism, finance, and investment

A significant pivot can be seen in the launch of Hubei Zhenghan Investment, established in 2004, with a registered capital of 800 million yuan, the foundation for a keen investment stanceThrough this arm, Jinjiu engages in the market actively, acquiring stakes in companies listed on the Beijing Stock Exchange and placing them among top ten shareholders in liquor firms such as Tianyoude Liquor, which ignited speculation of a potential public listing.

In the A-shares market, the saying “drinking leads to profit” rings true, and with a foot in financial investment, Wu has encapsulated some of the most lucrative endeavors in the Chinese market, cementing his status as the elusive “invisible tycoon” in the liquor industry.

Despite transforming Jinjiu into a formidable player within the top ten of Chinese liquor producers based on its segment, both health wine and herbal liquor remain niche categories with limited growth

Thus, Jinpai has yet to reach its pinnacleTo uncover new avenues, Jinjiu has set its sights on the historical opportunity of sauce liquor.

In the 1980s, due to raw material shortages, light aromatic liquors became the mainstream due to their low production costs and high outputJinjiu’s origins trace back to this modelPost-1990s, as raw material shortages eased, richer flavored liquors began to gain prominence, with Jinpai investing in a base for stronger-smelling liquor by establishing operations in Yibin, Sichuan, in 2012, later renamed Nanxi distillery.

The recent surge in sauce liquor, spearheaded by Baijiu Moutai, is revolutionizing the marketplace creating a trend that could come to overshadow the aromatic typesThe proliferation of sauce liquor symbolizes a supply-side transformation within liquor production and indicates a progressive consumer upgrade.

In pursuit of this trend, Jinjiu has begun to immerse itself in sauce liquor

By acquiring Guizhou Taixuan Liquor in 2015, the company entered the arena and started producing its own sauce liquor within two yearsThrough a careful strategy, Jinjiu has made it clear that it intends to brew liquor without sales for the first decade, with products scheduled for release in 2027. Remarkably, it signifies that liquor producers can participate in the advance sale of "futures" in a new format.

As evidence of its commitment, Jinpai has also taken control of the internationally recognized National Treasure Liquor distillery in Moutai town, which has its roots in a renowned local winery previously known as AoliangCurrently, Jinjiu’s sauce liquor offerings, such as the Shen Nong Jia brand, primarily derive from this facilityCoca-Cola-like strategies may not suffice in an instantaneous market; instead, a decade-long franchise allows robust foundations for brand loyalty.

As it stands, Jinjiu enjoys a production capacity of over 20,000 tons of sauce liquor, with plans to ramp that up to over 30,000 tons, laying the groundwork for establishing itself among the top-tier sauce liquor brands