Moutai: Stock Story

As with any investment, your capital is at risk.

Tell us about the company

Ben Buckler: If you haven’t visited China you likely haven’t poured a glass of Baijiu at dinner, so it’ll surprise you to know it sells more in volume terms than vodka, whisky, gin, rum and tequila combined. 
 
It’s China’s national drink with a history that goes back over 2000 years. The market is big, fragmented and complex. Brand value and cultural importance are key, particularly in the high end, where bottles sell for hundreds of dollars. And this is where Moutai operates, with the most iconic, and arguably the most valuable, Chinese consumer brand.

What makes this stock special?

Moutai is the leading premium brand in a market where a growing middle class and rising wealth is set to drive growth for many years.
 
The long-term potential lies in the enduring value and heritage of a luxury brand, which can be missed by a market focused on short-term outcomes. Baillie Gifford's experience in holding global brands over extended periods demonstrates the potential benefits for patient, long-term investors.
 
And while we pride ourselves on our investment horizons, our focus on the next 5-10 years is put to shame when listening to management talk about their vision for the next hundred years. 
 
So while tradition, culture and heritage are key ingredients that make up the brand, the company isn’t standing still. It has a big opportunity to boost growth by restructuring its distribution, and its direct-to-consumer app is already showing promise, helped in part by initiatives like aligning with China’s leading coffee and ice cream companies to appeal to a wider customer base.

What could the future hold?

This is a unique brand and product, with Moutai controlling the whole supply chain to protect the local ecosystem and ensure consistent quality. When we visited the town where Moutai is made, locals kept telling us, the drink is inseparable from its natural environment: the soil, the water and the air, none of which can be replicated elsewhere. That’s why the local government are so supportive. 
 
So Moutai is now the biggest drinks company in the world. With scarce supply, a loyal customer base and limited competition, Moutai can price at a premium, making it a highly profitable business. 

Risk factors

This communication was produced and approved in March 2025 and has not been updated subsequently. It represents views held at the time and may not reflect current thinking.

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