the integration trend of agriculture, food and consumption is becoming more and more obvious.
Recently, Guizhou Maotai Group announced the establishment of hongyingzi Agricultural Technology Development Co., Ltd. to officially enter the seed industry market and layout the seed business of brewing raw materials.
The establishment of seed industry company will extend the Guizhou Moutai industrial chain from Maoxiang Baijiu to the upstream raw material seed resources, and help Guizhou Moutai further lay the foundation for raw material production.
Maotai is not the only company developing to the upstream seed industry. Jiangxiaobai, Yike food, Guangming Food and new tea drinks like tea are actively distributing upstream.
On the one hand, the upstream layout of enterprises means that they have stronger control over the quality and cost of raw materials, which is more conducive to the long-term stable operation of enterprises.
On the other hand, the seed industry is at the forefront of agricultural planting and is known as the “chip” of agriculture. The state pays more and more attention to food security and seed industry development. Seed R & D and production have become a trend and usher in greater development space.
In this context, will the upstream layout of agricultural food enterprises become a trend?
Control the production of raw materials and produce Maotai
that will never change its flavor
One of the important purposes of establishing Maotai hongyingzi, a seed industry company in Moutai, Guizhou Province, is to ensure that Maotai will never change its flavor.
Guizhou Moutai is an exquisite scenery in Maotai Town, Guizhou, which is located in the north of Guizhou province. It is the main producer and sales of Moutai liquor and Moutai series liquor. The leading product Guizhou Moutai liquor is the originator and typical representative of Daqu Maotai Baijiu liquor in China. It is a product of green food, organic food and national geographical indication protection.
As the saying goes, “grain is the meat of wine”, the raw materials for making wine are very important to wine. The Baijiu flavor liquor is made of sorghum, and the special characteristic of Moutai is that the wine making material is waxy sorghum, red tassel sorghum, and ensures the pure sauce flavor of Maotai Town sauce wine.
Hongyingzi sorghum, also known as Hongliang, is an organic waxy sorghum produced in Maotai town. It was determined as the special sorghum for the production of Maotai liquor in 2008. This kind of red beam can only be planted in the unique water, soil and climate environment of Maotai Town, which is one of the reasons why Maotai sauce wine is not reproducible.
Maotai liquor brewing needs nine times of cooking, eight times of fermentation and seven times of liquor taking. Hongyingzi sorghum is different from other sorghum. It has the characteristics of solid, full and uniform particles, small particles and thick skin. The cross section is in the shape of glass texture, which is very conducive to multiple rounds of roasting of Maotai liquor technology. Other varieties of sorghum can finish the wine after five or six times of cooking. Only red tassel sorghum can last until the last round.
In addition, the amylopectin content of red tassel sorghum is more than 90% and contains 1.68% tannin. The traditional fermentation process of Maotai liquor makes it form the precursors of Maotai liquor flavor such as catechuic acid, vanillin and ferulic acid, and finally form the special aromatic compounds and polyphenols of Maotai liquor, forming the unique flavor of Maotai liquor.
Although red tassel sorghum is good, its output is limited and its cost is high. Red tassel sorghum can only be produced locally and has strict production standards. In addition, other wineries in Maotai town are purchasing this sorghum except Maotai liquor, resulting in the purchase price of red tassel sorghum above 3 yuan per kilogram.
Therefore, the establishment of Maotai Hongying subsidiary in Moutai, Guizhou will help Guizhou Moutai further lay a solid foundation for raw material production and form a stable supply. Maotai’s craftsman spirit can also take root and grow from the seed end of raw materials, forming a whole industry chain without dead ends and more strict quality control.
It is understood that Maotai Hongying subsidiary is a liquor sorghum seed production enterprise integrating education, propagation, promotion and research. It will select and build a breeding base, pay attention to the protection and excavation of seed resources through the introduction and training of professional and technical personnel, carry out key technical research on sorghum and wheat seeds, and do enough research and cultivation of sorghum and wheat original seeds, original seeds and improved varieties to ensure that the roots of Hongying sorghum are red, and the color and quality of medium and weak gluten wheat are good, To ensure that Moutai wine is never changing, it will continue to embody the Baijiu flavor liquor industry.
Tianyancha app shows that hongyingzi was founded on March 10, 2022, and was registered and changed from a company. Maotai Group holds 67% of the shares. The company now has 28 employees, 48 science popularization workers, more than 1000 seed production farmers, a breeding area of more than 7000 mu, and produces more than 1800 tons of sorghum seeds.
Li Jingren, general manager of Maotai Group, said that the development of agricultural science and technology industry focusing on sorghum and wheat seed industry is the basis of Maotai’s high-quality development and the internal need to reserve strategic resources and ensure the source of Maotai liquor quality.
Those enterprises that are developing upstream
In the context of “sauce and liquor fever”, in addition to Maotai, many sauce and liquor enterprises are also arranging the seed industry market. According to Cai Xuefei, general manager of Zhiqu consulting, there is a layout of raw material planting and R & D, including beipai Maotai flavor, Fujian Maotai flavor, Sichuan Maotai flavor, and even northwest Maotai flavor.
Not only sauce Baijiu enterprises, as early as 2010, with the liquor (cattle Hill Erguotou), slaughtering and meat processing (Pengcheng food) as the main industry of Shun Xin agriculture, the establishment of Beijing Shun Xin International Seed Company.
Jiangxiaobai also has the layout of the whole industrial chain. Its business covers sorghum breeding, ecological agricultural planting, technology research and development, brewing and distillation, sub packaging production, brand management, marketing, logistics and e-commerce. Jiangxiaobai sorghum Industrial Park was established at the end of the North vein of Dalou mountain on the Yunnan Guizhou Plateau; In Huangzhuang village, Yongxing Town, 5km away from Jiangji winery, its own winemaking base, there is a planting land of nearly 10000 mu of red peel waxy sorghum as the raw material for brewing; The industrial park also cooperates with the rice sorghum Research Institute of Sichuan Academy of Agricultural Sciences and Chongqing Academy of Agricultural Sciences to realize large-scale planting by introducing excellent varieties and large-scale planting.
Entering the seed industry is not only a necessary step for large-scale liquor enterprises to continue to deepen the industrial chain and enhance market competitiveness. After establishing their brands, many food enterprises began to extend their layout from the downstream consumer end to the upstream planting end.
Yike food of agriculture and animal husbandry food group is the second largest meat and duck supply enterprise in the world and the top three meat and poultry supply enterprises in China. Its business runs through the whole industry value chain of poultry (broiler and duck) variety breeding, breeding poultry breeding, feed, slaughtering, conditioning products, cooked food chain, agricultural Internet of things, agricultural big data and analysis. In 2022, in terms of breeding, the company and Yangzhou University carried out independent breeding of high-quality ducks and established the “China high-quality duck Germplasm Resources Innovation Center”.
Guangming Seed Industry Co., Ltd., a comprehensive food group, was established in August 2011. Its Guangming home port has a modern agricultural seed industry innovation zone. Using the scientific and technological achievements of Guangming Israel innovation center, China imported food research institute and other centers, Guangming Food is committed to building a seed industry innovation incubation zone integrating commercial breeding, resource protection and utilization, variety test and identification, achievement display and trading and product creative development.
Starbucks, hi tea and other new coffee and tea brands are also distributed upstream. In order to meet the needs of the Chinese market and reduce the cost loss in the process of overseas transportation, Starbucks has opened a coffee plantation in Yunnan, set up a Starbucks Yunnan grower support center and Starbucks Aini coffee (Yunnan) factory locally, and improved the construction of upstream production.
Emperor tea, the predecessor of Xi tea, was founded in 2012 and officially changed its name to Xi tea in 2016. In the second year of becoming Xi tea, it built a 500 mu self owned tea garden in Fanjing Mountain, trying to control the quality of tea from the source and go deep into every link of tea garden environmental assessment, soil cultivation, tea tree cultivation, natural growth of tea, manual picking and tea matching. In 2020, we will start to develop strawberry varieties by ourselves. On the one hand, we will investigate, cultivate and develop new varieties. On the other hand, we will select appropriate regional strawberry bases to build our own strawberry bases through the development of seedling raising, cultivation and maintenance test bases.
Is the layout of the whole industrial chain a new trend?
A change seems to be taking place. Companies that make downstream consumer food layout upstream. Everyone wants to firmly grasp the core technology in their own hands.
Food industry analyst Zhu danpeng told 35dou that a core point of enterprise competition in the future lies in the integrity of the industrial chain. More and more top 500 companies, listed companies and leading enterprises take the integrity of the industrial chain as the core focus of future development.
Some benefits of controlling the upstream layout are obvious.
The first is cost control. After the upstream layout is completed, the large-scale and standardized production of raw materials can reduce the raw material collection cost of enterprises, and enterprises will have greater profit space and thicker industry barriers.
Taking Maotai as an example, its business model is: purchasing raw materials – producing products – selling products. The production process of the product is: koji making – wine making – storage – blending – packaging. Purchase and sell raw materials to Guizhou Maotai according to the company’s production plan. In 2020, Guizhou Maotai purchased more than 2.95 billion yuan of brewing raw materials, accounting for more than 52% of the total raw material procurement.
In addition to the cost, the upstream layout can bring stable and reliable output supply for enterprises and grasp the quality.
Li Jing, a senior researcher at 35dou, analyzed that when the enterprise reaches a certain scale, there will be many risks if there is no stable and reliable upstream supplier. For example, if the demand of enterprises is large enough, they need to purchase from different suppliers, and the uncertainty of output and quality is greater. When signing a contract with a supplier, it is usually signed for one year, which means that the price and even partners are changing every year.
Enterprises grasp raw materials from the source and are also ensuring quality and safety. Recent incidents about food hygiene and safety are emerging one after another. Consumers will pay more attention to the possible problems of goods from the source to the sales market. Food enterprises must ensure the stability of product quality, and the control of product quality is not only to control the production and processing end, but also include standardized collection, standardized breeding and other links.
Whether in terms of cost control, quality control or safety control, the upstream layout is very important for the long-term development of the company, but not all enterprises are suitable.
Starting from the downstream and distributing the upstream, a large amount of cost needs to be invested in the early stage, which is a great challenge for the company. It is necessary to consider the company’s scale, demand stability, capital strength, etc.
Li Jing believes that when the enterprise volume is large enough, there is a great demand for upstream raw materials. It is a better choice to control the upstream. While ensuring business development, controlling the quality of raw materials and reducing procurement costs. However, if the downstream business volume is not large enough and the enterprise demand can be met through high-quality and stable upstream suppliers, the premature layout of the upstream supply side may affect the profitability of the enterprise due to heavy asset investment. The upstream layout of the industrial chain is entirely determined by the enterprise’s own development stage.
In addition to extending from the downstream consumer end to the upstream planting end, many enterprises also start from the seed industry to develop consumer brands and seek the layout of the whole industrial chain.
Starting with raising quails and chickens, new hope has now become a comprehensive enterprise group with agriculture, animal husbandry and food as the leading industry; When Chu Shijian began to cultivate rock sugar orange in Yunnan, he didn’t expect “Chu orange” to become a household name of a major fruit consumption brand.
It can be seen that from upstream to downstream, from downstream to upstream, more and more companies seek the layout of the whole industrial chain, and the integration trend of agriculture, food and consumption is becoming more and more obvious.
This is also in line with the investment and development logic in the field of agricultural food, and companies that open up the whole industrial chain are more competitive.
Author: Hu Xiaofeng; Source: 35dou (ID: vcearth), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246); Foodaily Expo 2022] in line with the original intention of providing the whole value chain and one-stop industrial innovation services for the industry, foodaily Expo 2022 (2022.05.31-06.02, Shanghai) is further upgraded. In addition to the upstream and downstream of the food industry, it also covers and gathers multiple resources such as e-commerce, social media, traffic, channels and capital, aiming to bring you an annual innovation feast. Here, products, content, technology, marketing and other aspects related to food & brand innovation will be presented in the form of “professional exhibition + innovative content + interactive experience”, breaking through and differentiating in the consistent form of industry exhibition.
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