BRIEF: Moutai shelves ice cream as hype fades

Moutai Ice Cream, once a highly sought product from China’s most famous liquor maker, has sharply cut back or even ceased production as its popularity quickly faded after recent initial hype. Chinese media reports indicate that Moutai Ice Cream stores in many locations have closed, and its online shops on JD.com and Tmall have also been shut down. Kweichow Moutai Liquor (600519.SH) responded with a statement saying that Moutai Ice Cream has achieved success in cultivating a younger consumer base and the company has strategically chosen to scale back.

According to financial media Caixin, only a few stores selling the liquor-flavored ice cream remain open, after the company closed many outlets. Moreover, several Moutai Ice Cream products are listed as out of stock on its “iMoutai” app. Kweichow Moutai said consumers can still purchase ice cream products at offline sales channels such as Moutai-owned hotels and resorts.

Launched in 2022, Moutai Ice Cream was one of the company’s products aimed at a younger generation of consumers. About 2% of the product comes from Moutai’s signature 110-proof liquor and is priced at 55 yuan to 66 yuan, or $7.50 to $9, per cup. In a similar initiative, Moutai collaborated with the coffee chain Luckin (LKNCY.US) in 2023 to introduce a Moutai-flavored Latte. On its launch day, the product sold 5.42 million cups, generating over 100 million yuan ($13.6 million) in sales. However, as the initial hype faded, sales of the Moutai Latte also slumped, and it was gradually removed from stores last year.

“In recent years, Moutai has made many attempts,” said Chairman Zhang Deqin. “If something proves unsuitable, we must adjust immediately. Trust in Moutai’s ability to correct its course.”

Former Moutai Chairman Ding Xiongjun, who spearheaded the launch of several collaborative products, was reassigned to the Guizhou Provincial Market Supervision Bureau in April last year. Earlier this month, Ding was placed under investigation for alleged serious violations of discipline and law, a stock phrase that usually points to a corruption investigation.

By Lee Shih Ta

To subscribe to Bamboo Works weekly free newsletter, click here