Dayone invests $63m in China liquor brand

Founded in 2021, Zhengong is located in Maotai, Guizhou province, which gives its name to China's most prestigious liquor, or baijiu, brand. While Maotai typically sells for more than CNY 2,000 a bottle, Zhengong is in the CNY 300-CNY 500 per bottle range. Its first product has already launched, priced at CNY 480.

China’s liquor market is worth around CNY 600bn per year, with 45% of sales made by listed companies. Dayone - a consumer-focused private equity firm, which closed its debut fund last year on USD 630m - noted that the industry is still fragmented, creating opportunities for PE investors to back potential consolidators.

In April, Zhengong acquired an 80% stake in Huaizhuang Wine Business, which was established in 1983 and claims to be one of the first privately owned brewing enterprises set up in Maotai county. The acquisition boosted Zhengong’s annual production capacity to 3,000 tonnes. It also assumed control of a reserve of vintage wines amounting to more than 10,000 tonnes.

Zhengong has promised to produce all its liquor in Maotai county, strictly adhering to traditional processes. All products will be held in storage for five years prior to release, allowing time for maturation.

Other investments in China's liquor space include a CNY 600m Series B for Forty-Nine Union, another sauce-flavoured specialist based in Maotai county, last year. CMC Capital Group was the sole investor.

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• Topics
• Greater China
• Consumer
• China
• Dayone Capital
• food & beverage