Hit me with your best shot (of Moutai)

In the small town of Moutai in southern China’s Guizhou province, liquor manufacturer Kweichow Moutai teamed up with Huawei in 2020 to achieve a digital transformation. Three years on, results are showing. 

Fierce and pungent, with an alcohol content of more 50%, Moutai is arguably China’s most famous baijiu – a word translated as “white liquor.” There are different types of Moutai, but the higher-end products can go for several thousand dollars a bottle. Because it is so expensive, people often serve it at special occasions such as weddings, diplomatic functions, or high-end business dinners. Similar to France’s Appellations d'Origine Contrôlée, only wines made in the town of Moutai can use the Moutai name.

To create its prized nectar, Kweichow Moutai follows strict manufacturing processes and tightly controls its supply chain. Key ingredients like water, sorghum, and qu (a mix of yeast and mold) are sourced locally. Surrounded by a range of mountains, the Moutai valley has an unusual micro-climate with low rainfall but high humidity. Summers are hot and winters mild.

Making Kweichow Moutai is complex. The wine is distilled nine times, filtrated eight, and fermented seven. It’s labor-intensive work.

Then there’s storage. It takes five years to make the most basic bottle of Kweichow Moutai, which sells for several hundred dollars (if it can be found at all, since demand far outstrips supply). The most promising vintages are aged in earthenware jars for up to 80 years and eventually are sold for tens of thousands of dollars per bottle. 

A lot can go wrong before a bottle of Moutai is produced. With so much human labor involved, it’s hard to control for errors. When wine is aged for decades, it requires constant monitoring to ensure that temperatures never change. Then there is the risk of pilferage from visitors, contractors, or even employees succumbing to temptation: sneak a bottle out of the factory, and you could re-sell it on the black market for hundreds or even thousands of dollars.

Digital transformation to the rescue

Deploying a fully-fledged IoT infrastructure keeps managers aware of even small changes in warehouse conditions. When a quality problem is found, it can easily be traced back to ingredient sourcing, failure to comply with manufacturing standards, or some other root cause.

In April 2020, Moutai and Huawei agreed to cooperate in the areas of digitization, new infrastructure construction, and the development of industrial internet platforms.

The outcome will eventually be “Smart Moutai” wine produced with the help of Huawei technologies including 5G, AI, and cloud computing. 

Digital transformation is a long journey. But walking into Moutai's production area, a visitor can already see that almost all of the wine-making procedures are under digital monitoring. A new system supports wine storage safety, manufacturing process management, security of premises, fire prevention and response, emergency management, and administrative operations management. 

The digital transformation of Kweichow Moutai is well under way, illustrating that resting on one’s laurels is not the only option – even when you’re already at the top of the market.