Focus: Chinese liquor makers endeavour to give Westerners a taste for baijiu
26/06/2024 06:00
*
Baijiu, a fiery white spirit, is little known outside of
China
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China's liquor makers look overseas as growth slows at
home
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Producers tweak spirit's taste, plan marketing push in
West
By Emma Rumney and Casey Hall
LONDON/SHANGHAI, June 26 (Reuters) - Makers of the
Chinese liquor baijiu are reformulating the fiery grain liquid
to appeal to a wider client base, including cocktail drinkers in
New York, Los Angeles and London, as sales at home slow.
While sales in China are still rising, top baijiu makers like
Kweichow Moutai 600519.SS face far slower growth than in the
past as younger generations increasingly opt for alternatives to
the country's national liquor.
Now, in a bid to find new pockets of growth, some major
makers of the colourless liquor are starting to pitch it to
Western consumers outside of China for the first time.
Baijiu is little known in the United States, United
Kingdom and Europe, however, so many Western drinkers would have
to learn to like the flavour.
Baijiu, which translates as 'white alcohol', usually has
between 40% and 60% alcohol content. It is generally distilled
from sorghum, although wheat, barley, millet or glutinous rice
are also used.
Its taste varies depending on the region or way it is
produced. Some say it is similar to vodka. Another well-known
type is likened to soy sauce.
Chinese companies' moves to push baijiu outside of China
come as Western drinks groups like Pernod Ricard PERP.PA and
Diageo DGE.L muscle in on Chinese liquor makers' turf,
tempting China's twenty and thirty somethings with Irish and
Scotch whiskies in particular.
Shede Spirits 600702.SS , based in China's Sichuan
province, sells two baijiu brands in China and to Chinese
consumers globally. Its more expensive brand, Shede, goes for up
to $1,000 per bottle.
The company, controlled by Chinese conglomerate Fosun
International 0656.HK , said it is holding tasting sessions to
identify tweaks to the flavour of the Shede brand, in hopes of
appealing to non-Chinese drinkers.
The participants will come from the United States,
Australia, Britain and other European countries, as well as
places like Japan and Singapore.
"We figured out that the foreigners, their taste is finer,"
said Zhu Yingcai, Shede's head of sales and marketing, adding
that compared to vodka baijiu can be "heavy and very thick".
Over time, Shede believes Westerners will come to enjoy
baijiu, and it could steal market share from other spirits, he
said.
The company will sell the international version of its Shede
baijiu for around $150 from September in countries in parts of
Europe, the United States and Japan, according to Zhu.
In comparison, online alcohol retailers based in New York
sell 750 millilitre bottles of Diageo's Johnnie Walker Blue
Label whisky, the most expensive version of the brand, for $200
or more on their websites.
'EXTREMELY AROMATIC'
Rival baijiu maker Sichuan Yibin Wuliangye Group,
headquartered in Yibin city in Sichuan, has teamed up with
Italian drinks group Campari CPRI.MI in a partnership aimed at
promoting both companies' brands in China and internationally.
The partnership, announced in November, is still in its
"very early stages", said Campari, whose brands include the
Aperol aperitif, Espolon tequila and Wild Turkey whiskey.
Campari's sales of its own brands in China are currently
relatively small.
The companies will work together on marketing and brand
promotion and co-create products, Campari said.
They have already developed a twist on the negroni cocktail,
usually made with gin, using a "special blend" of Wuliangye's
baijiu. They launched this cocktail in Shanghai in September and
dubbed it the "Wugroni".
Wuliangye did not respond to a request for comment.
China is the world's largest alcohol market, largely thanks
to baijiu sales. The country's liquor makers sold roughly $167
billion of baijiu in China alone in 2023, estimates research
firm Euromonitor. It said it does not monitor baijiu sales
outside of China, which remain small.
Zhu said Shede's international sales stood at around $5
million in 2023, but it aims to increase them to $100 million
within 5-10 years.
To get there, it plans marketing on platforms like TikTok,
via influencers in the United States and Europe and eventually
sports sponsorships, perhaps even of major events like the
Olympics, Zhu said.
At the bar of the Manhatta restaurant in New York, customers
can enjoy a "Berry Me NYC" for $21. It contains a small amount
of baijiu, alongside Pimms and shiraz.
Patrick Smith, senior beverage manager, said baijiu is
"extremely aromatic". When opening a box of baijiu bottles, the
smell hits the nose even though they are shrink wrapped, he
said.
The cocktail was only recently introduced. But a
baijiu-containing predecessor was "in the middle" in terms of
popularity versus other cocktails on the menu. Customers who
tried them were curious about the flavour, he said.
Manhatta's cocktail uses baijiu from Ming River, a company
created by three Westerners in partnership with major Chinese
distillery Luzhou Laojiao.
Aiming to develop an international market for the
spirit, Ming River sells its baijiu in 15 countries including
the United States where clients range from bars and restaurants
to retailers such as Costco and tourists flocking to Disneyland.
($1 = 7.2176 Chinese yuan renminbi)
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(Reporting by Emma Rumney in London and Casey Hall in Shanghai;
Additional reporting by Elisa Anzolin in Milan; Editing by
Vanessa O'Connell and Susan Fenton)
((Emma.Rumney@thomsonreuters.com; +447391409253;))