Zhongtai 26Q3 Food & Beverage Preview: Baijiu Accelerates Bottoming Out; Snacks Resonate with New Channels and Healthification

Zhongtai released a research report stating that in 26Q3, the baijiu industry showed significant structural divergence, with the industry as a whole accelerating its bottoming-out process, while the soft drinks market faced pressure on overall prosperity, with clear divergence among internal categories. Baijiu consumption returned to rationality, consumers' willingness to stockpile weakened, and buy-as-you-go became the mainstream consumption characteristic. Market performance during the double-holiday peak season showed a dumbbell-shaped pattern, with high-end baijiu overall performing better, the sub-high-end segment under pressure, and regional baijiu achieving structural recovery relying on banquet and homecoming scenarios. The healthification trend in snacks continued, offline snack demand came under overall pressure, the nut and roasted seed category continued to show resilience, while heavy-flavor, high-oil, high-salt categories saw larger declines, and foot traffic in traditional supermarkets continued to migrate to emerging channels such as bulk snack stores. Zhongtai's main views are as follows: Baijiu sector: Sell-through performance diverged, with high-end baijiu performing relatively well. In 26Q3, the baijiu industry showed significant structural divergence, with the industry as a whole accelerating its bottoming-out process, while the soft drinks market faced pressure on overall prosperity, with clear divergence among internal categories. Baijiu consumption returned to rationality, consumers' willingness to stockpile weakened, and buy-as-you-go became the mainstream consumption characteristic. Market performance during the double-holiday peak season showed a dumbbell-shaped pattern, with high-end baijiu overall performing better, the sub-high-end segment under pressure, and regional baijiu achieving structural recovery relying on banquet and homecoming scenarios. Within the high-end baijiu segment, divergence also appeared. Moutai's double-holiday sell-through exceeded expectations, Feitian wholesale prices remained stable, channel inventory stayed at a low level, the share of consumption for drinking purposes increased, and Moutai's direct-sales channels continued to empower growth; Wuliangye Yibin's control of supply to support prices and crackdown on cross-regional dumping drove a rebound in the wholesale price of Puwu, with double-holiday sell-through achieving double-digit growth; Luzhou Laojiao implemented a strategy of controlling volume and stabilizing prices, paying subsidies in advance to drive channel payments. The sub-high-end segment came under overall pressure. Shanxi Xinghuacun Fen Wine Factory's double-holiday terminal sell-through declined, with the province focusing mainly on defending market share, and payment performance better than sell-through; Shede Spirits faced overall operating pressure, with the ordinary baijiu segment achieving double-digit growth through Tuopai T68, but the sub-high-end business dragging down overall performance. Regional baijiu benefited from banquet recovery and homecoming consumption. Jiangsu King's Luck Brewery Joint-Stock showed outstanding competitiveness in the 300-yuan price band within the province, with banquet demand supporting sell-through; Anhui Yingjiagongjiu seized the opportunity of mass consumption returning, with the mass banquet scenario performing well. Soft drinks: Sugar-free tea continued high growth, while the overall beverage market came under pressure. From May to August, sales in the beverage category fell 13.67% year on year, with juice, carbonated drinks, and functional beverages generally weakening. Only sugar-free ready-to-drink tea maintained high growth of about 10%, while sugary tea drinks declined significantly, and industry share concentrated toward leading players. Eastroc Beverage was affected by typhoons and floods in core consumption regions, with energy drinks under pressure, while hydration drinks and tea beverages performed steadily. Jilin Quanyangquan advanced the divestiture of park landscaping assets, its main Northeast sales region was not disrupted by extreme weather, and its peak-season sales target was set for high growth. Snacks: The healthification trend continued, while traditional offline channels were relatively weak. Offline snack demand came under overall pressure, the nut and roasted seed category continued to show resilience, while heavy-flavor, high-oil, high-salt categories saw larger declines, and foot traffic in traditional supermarkets continued to migrate to emerging channels such as bulk snack stores. Online marketing selling points focused on health attributes such as high protein, zero trans fat, and non-fried, with healthification demand continuing to penetrate. Sector stock prices overall corrected, with bulk snack leaders outperforming. On the earnings side, the pace of store openings in bulk snacks remained steady, and Fujian Wanchen Food Group's scale effects continued to be released, with revenue and profit expected to continue relatively rapid growth. Chacha Food benefited from bulk channel expansion and the sunflower seed cost dividend, with relatively large profit elasticity. Yanker Shop Food faced channel structure adjustment combined with rising codfish and packaging material costs, and short-term profitability may come under some pressure. Jinzai Food Group's bulk channel continued high growth, while anchovy price increases and new factory ramp-up may suppress profit release. Risk warnings: Terminal demand recovery falling short of expectations, intensifying industry competition, price increases landing below expectations, raw material price fluctuations, food safety risks, and risks of untimely updates to research report information.