Over 80% of 128 food and beverage companies are profitable: Why is this not equivalent to a full-scale recovery?

In the first half of the year, 128 food and beverage companies listed on the A-share market recorded a total operating revenue of 539.665 billion yuan and a net profit attributable to shareholders of 108.966 billion yuan. Among them, 82.81% of the companies achieved profitability, but only 58.59% posted revenue growth, and the proportion of companies with net profit growth was even lower at 52.34%.

The most notable point of this set of data is not that "over 80% of the companies are making profits", but that the number of profitable companies is significantly larger than that of companies with growing revenue.

Even when selling the same categories of products such as alcohol, beverages, dairy products, condiments or snack foods, some enterprises are still troubled by sluggish sales, while others see little revenue growth but much faster profit growth. The real watershed in the industry is shifting from "whether we can sell more" to "whether we can sell more high-gross-margin products, deliver goods faster, and complete each transaction at lower costs".

The competition in the food and beverage industry no longer only takes place on the shelves in front of consumers, but also in several less noticeable indicators in financial reports.

Over 80% profitability does not mean full-scale recovery

The 82.81% profitability ratio looks quite good, but it only indicates that more than 80% of the companies are not making losses, and does not mean that the operations of all these companies are improving.

Among the 128 companies, 58.59% achieved revenue growth, which means that more than 40% of the companies still saw no revenue increase; 52.34% recorded net profit growth, meaning that nearly half of the companies' profits did not improve year on year.

This is a typical scenario of "wide profitability coverage but narrow growth coverage".

If we compare the food and beverage industry to a large troop, the current situation is not that everyone is accelerating together, but that most enterprises are still above the profitability line, while only a part of them are actually moving forward. Some companies have maintained their profits, some have gained breathing room through cost reduction, and some are widening the gap with others by reconstructing their product portfolios and channels.

Macroeconomic consumption data also shows that this recovery is uneven. In the first half of 2026, the total retail sales of consumer goods increased by 1.3% year on year; the retail sales of grain, oil and food, beverages, tobacco and alcohol of units above designated size increased by 7.4%, 6.0% and 13.2% respectively, but the performance of different business formats diverged: convenience stores and supermarkets saw growth, while department stores and brand specialty stores registered declines.

Consumers are not stopping buying food and beverage products. Instead, changes are taking place in what they buy, where they buy, and what they are willing to pay more for.

Therefore, the fact that over 80% of the companies are profitable cannot be simply interpreted as "a full recovery in demand". Raw material prices, product mix, channel structure, expense allocation and even accounting standards may all lead to improvements in the profit statement earlier than the revenue statement.

To judge whether a consumer goods company has truly recovered, the first step is not to see whether it makes money, but to figure out where the profits actually come from.

Product mix: why do some companies earn more even when selling the same volume?

There is a simple but often overlooked fact in the food and beverage industry: the profit left for the company may be completely different even when selling the same number of products.

A case of mass-market beverages and a case of functional beverages are both counted as one case in sales volume, but they differ in pricing, gross margin and consumption scenarios; a bag of basic snacks and a box of gifting products may consume similar production capacity, but the profits they can contribute can vary greatly.

This is the power of product mix.

When an enterprise increases the revenue proportion of mid-to-high-end products, functional products, small-sized portable packages or new high-value-added products, the average selling price and gross margin may improve even if the total sales volume does not increase significantly. On the contrary, if sales growth mainly relies on low-priced products, discount promotions or low-gross-margin large orders, the revenue will look impressive, but the profit may not increase synchronously.

However, "product premiumization" is not as simple as making the packaging more exquisite and raising the price.

Consumers are becoming more cautious: they are willing to pay for real value, but are not willing to pay for vague concepts in the long run. Health benefits, low sugar, simple ingredients, clear functions and convenient use may generate a premium; if a company only changes the name and packaging, it may attract first-time purchases in the short term, but the repurchase rate will hardly be maintained.

Therefore, when looking at the product mix, we should not only focus on the number of new products and the proportion of high-end products, but also pay attention to three subsequent indicators: whether new products bring sustained revenue, whether the gross margin is truly improved, and whether inventory is piling up along with the launch of new products.

Truly effective structural upgrading does not mean selling products at higher prices, but making consumers feel the price is justified, while the enterprise can sell out all products smoothly.

Channel efficiency: sales volume being the same, expenses can vary greatly

In the past, the consumer goods industry had a common growth path: distribute more products, recruit more distributors, invest more in advertising, and then drive up sales through promotions.

This model was very effective when the market was expanding rapidly, but problems began to emerge after the industry entered the stock competition stage. More channels do not necessarily lead to more sales; more frequent promotions do not necessarily leave more profits.

Food and beverage companies do not only pay for production costs, but also a series of other expenses including distributor discounts, supermarket entry fees, platform commissions, live-streaming traffic investment, brand advertising, terminal display and promotion staff costs. Every inefficient link the goods pass through from the factory to consumers will cut a piece of the profit.

Therefore, to judge the quality of channels, we should not only look at the number of directly-operated outlets, the number of distributors or the growth rate of online sales, but also pay attention to the sales expense ratio.

If a company's revenue grows by 10% but its sales expenses grow by 30%, it may be spending more money to purchase short-term sales; if the revenue does not grow fast, but the sales expense ratio continues to decline while terminal sales and market share remain stable, it indicates that the channel efficiency may have been truly improved.

Online channels are not inherently cheaper.

E-commerce can reduce some intermediate links, but it may add costs such as platform deductions, traffic procurement, influencer commissions and return costs. Selling a large number of products in the live-streaming room in one night looks very prosperous, but if it mainly relies on low-price subsidies and high traffic investment, it may just replace offline channel costs with online traffic costs in the end.

Truly valuable channel reform means that enterprises have a clearer picture of where the goods are sold, who is buying them and when restocking is needed, rather than simply moving products from supermarket shelves to live-streaming rooms.

For consumers, this competition will also bring changes. Enterprises will reduce ineffective product distribution, increase the supply of small packages, instant retail and scenario-based products; promotions may become more precise, but the extensive strategy of "low prices across the board" will be increasingly unsustainable.

Cost reduction makes profits grow ahead of revenue

Less than 60% of the companies posted revenue growth, but over 80% of the companies are profitable. Another important explanation comes from the cost side.

The cost sheet of food and beverage enterprises covers grain, sugar, oil, meat, milk sources, fruits, packaging materials, energy and logistics. Price changes of any bulk raw material may affect the gross margin.

When raw material prices fall while terminal selling prices do not decline synchronously, the profit per unit product of the enterprise will improve. Even if the sales volume remains flat, the gross profit and net profit in the financial report may rise. This is also why in some stages, the profit growth rate is significantly faster than the revenue growth rate.

However, the cost dividend needs to be understood prudently.

First, different enterprises have different procurement cycles. Large enterprises may lock in costs through long-term agreements, hedging or advance stockpiling, so the decline in raw material prices may not be immediately reflected in the current period's profits; small and medium-sized enterprises have more flexible procurement, which may allow them to benefit faster, but also make them face greater pressure faster when prices rebound.

Second, cost reduction is not a permanent capability. Once raw material prices rise, if enterprises lack brand pricing power and cannot smoothly raise prices for consumers, their gross margin may be squeezed again.

Finally, profit growth may also be affected by non-recurring factors such as asset disposal, government subsidies, investment income and changes in impairment. Therefore, when seeing a sharp increase in net profit, we still need to refer to the non-recurring profit and loss deducted net profit and the notes to the profit statement to judge whether the growth comes from main business operations or one-off items.

Good profits should be replicable. Profits earned only from cheap raw materials are more like a weather-related dividend; profits earned through products, brands and efficiency are closer to real operational capabilities.

Nearly 70% of the 108.9 billion yuan profit comes from the Baijiu sector

The 128 companies recorded a total net profit attributable to shareholders of 108.966 billion yuan, which looks like a huge industry cake, but the distribution of the cake is very uneven.

In the first half of the year, 20 listed Baijiu companies achieved a total operating revenue of 206.45 billion yuan, accounting for 38.26% of the total revenue of the 128 companies; their total net profit reached 75.265 billion yuan, accounting for 69.07% of the total industry profit.

In other words, less than one sixth of the companies contributed nearly 70% of the total profits.

This shows that the overall profitability of the food and beverage industry is significantly affected by the Baijiu sector. Baijiu boasts high gross margins, brand barriers and a stable price system, and its business model is very different from that of the mass food, dairy and meat product industries.

Calculating the net profit margin of all food and beverage companies together is likely to lead to an overly optimistic average figure.

A Baijiu enterprise can maintain high profits relying on its brand and inventory age, while a low-temperature dairy enterprise has to face cold chain loss, shelf life restrictions and regional distribution issues; a beverage enterprise may rely on peak seasons and channel distribution, while a meat product enterprise is more vulnerable to the raw material price cycle.

Therefore, the aggregated industry data is suitable for observing the overall picture, but cannot replace the comparison between different segmented tracks.

When looking at the financial reports of consumer goods companies, it is better to compare them with enterprises in the same category, with similar channels and similar price ranges first. Otherwise, comparing the net profit margin of a mineral water company with that of a high-end Baijiu company will only get accurate figures but meaningless conclusions.

Improved cash flow also depends on how the money is received

In the first half of the year, the net cash flow generated by operating activities of the 128 food and beverage companies totaled 120.365 billion yuan, up 27.40% year on year, among which 70 companies saw their operating cash flow increase year on year.

Cash flow is usually harder to "manipulate" than net profit, because it directly reflects whether the enterprise has actually received money. But even for cash flow, we cannot only look at the aggregated value.

For example, some large groups have finance subsidiaries, and financial activities such as absorbing deposits from affiliated member units will affect operating cash flow. Kweichow Moutai's net operating cash flow reached 70.691 billion yuan in the first half of the year, which was affected by factors such as the increase in deposits absorbed from group member units by its finance subsidiary and the decrease in non-withdrawable interbank deposits.

This means that the sharp increase in operating cash flow does not all come from consumers buying more products.

For ordinary food and beverage enterprises, it is more worthy of observing the cash received from selling goods, accounts receivable and contract liabilities. If the revenue grows but accounts receivable increases rapidly, it may mean that the goods have been sold out but the payment has not been received yet; if the contract liabilities drop significantly, we need to pay attention to whether there are changes in distributor prepayments and channel confidence.

In addition, inventory is also a factor that cannot be bypassed.

Consumer goods companies can recognize revenue in advance by pushing overstock to distributors, but whether end consumers have actually bought the products still needs to be verified by inventory turnover, distributor inventory and subsequent payment collection. Only when revenue growth, cash flow improvement and reasonable inventory mutually confirm each other can the growth quality be more credible.

When looking at consumer goods financial reports, break down these five accounts first

For ordinary consumers and industry practitioners, the fact that over 80% of the 128 companies are profitable is certainly a positive signal. But it does not convey the message that "the entire food and beverage industry has recovered", but that the industry has entered a more refined competition stage.

In the future, when evaluating a consumer goods company, we can break down five accounts in sequence.

The first is sales volume: does the growth come from selling more products, or changes in statistical caliber and mergers and acquisitions?

The second is average price: does the increase in average selling price come from product upgrading, or simply raising prices?

The third is gross margin: does the profit improvement come from brand premium and product mix optimization, or phased raw material price reduction?

The fourth is sales expense ratio: is the company improving channel efficiency, or spending more promotion fees in exchange for sales volume?

The fifth is inventory turnover: do the products finally reach consumers, or are they still piled up in the warehouses of enterprises and distributors?

Who benefits? Enterprises with brand pricing power, product innovation capabilities and efficient channels, as well as companies that can convert raw material cost dividends into stable profits.

Who faces pressure? Enterprises that rely on low-price promotions, have slow inventory turnover, too many channel levels, and lack differentiated products.

Under what circumstances may the current judgment fail? If raw material prices rise again, consumer demand weakens, or channel inventory continues to accumulate, the profit improvement may lose its support.

The fact that over 80% of the companies are making profits is the result, while the fact that less than 60% of the companies have revenue growth is the real clue. It tells us that the competition in the consumer goods industry is no longer just about putting more goods on the shelves, but about using more appropriate products, shorter channels and lower costs to turn every revenue into profits that can be retained.

References:

1. Wind, Securities Daily: Over 80% of Listed Food and Beverage Companies Achieved Profitability in the First Half of the Year, September 1, 2026

2. National Bureau of Statistics: The Total Retail Sales of Consumer Goods Increased by 1.3% in the First Half of 2026, July 15, 2026

3. Shanghai Securities News: Competing in Products, Scenarios and Channels — The Performance of Food and Beverage Companies in the First Half of the Year is Impressive, July 24, 2026