Alcohol is an almost universal beverage. Every country in the world has its own special versions and brands to satisfy almost any palate and taste. Kweichow Moutai Co. is the most valuable liquor company in the world, ahead of close rival Diageo.
Liquor is different from other forms of alcohol like wine or beer in that it is distilled rather than fermented. This makes the product more potent, with a higher level of alcohol per ounce. Kweichow Moutai makes a wide variety of liquors, but it’s most notable brand is Maotai. It’s largest rival, Diageo, is the maker of Johnnie Walker Liquor.
Moutai Makes Maotai
The Kweichow Moutai brand is based out of Guizhou, a province in southwestern China. The company makes high end liquors that are called baijiu. This incredibly popular form of Chinese alcohol is made from sorghum and rice that are distilled together.
Maotai is the primary product of Kweichow Moutai, and it’s remarkable for many reasons. Most notably is that Maotai has an extremely high alcohol content, clocking in at fifty-three percent. To put that into context, a typical beer has something around four percent alcohol by volume.
The drink predates the company. It’s got a long history in China, and many consider it to be the cultural drink of the country. It was used to toast United States President Richard Nixon during this historic visit to China in 1972, the trip that opened up trade relations between the two countries for the first time.
The drink is a highly sought after beverage for special occasions. It’s particularly tied tightly to high level business. President Xi Jinping of China has led a wildly popular campaign against corruption in the country, and Maotai has had a huge surge despite its association with extravagant business dealings. The drink took a downturn during the initial run of that campaign, but it quickly recovered thanks to its favor with young people in China.
In 2017, the stock price of Kweichow Moutai rose more than fifty percent during the first half of the year. The company has been partially publicly traded since it was listed on the Shanghai Stock Exchange in 2001. It’s one of the most explosive Chinese stocks ever to hit the market, peaking in 2018.
The company has a market capitalization of more than seventy billion dollars. It’s yearly revenue is in excess of fifty billion Chinese yen. Founded in 1999, the chairman of Moutai is Yuan Renguo.
This company is a part of the larger Kweichow Moutai Group. That group is owned by the Guizhou Provincial People’s Government. Like most of the larger corporations in China, Kweichow Moutai is tightly intertwined with the government of the country. This is important to realize because that government control has been highly controversial. The Chinese government has been accused of offering special favors and incentives for Chinese companies like Kweichow Moutai over their foreign rivals, something that is seen by many in the international business community has an unfair free market practice.
More Than Booze
Kweichow Moutai doesn’t just put its stock in booze, it also has its hands in a lot of other products. These include food products, packaging materials, research and development, technology products, and even anti-counterfeiting tech.
The diversification of the business model of this company, along with the rich history of its signature product, have led to huge successes.