BEIJING: Premium baijiu brands are tapping new markets in China, aiming to reach younger, middle class consumers with new products while also anticipating that a younger generation attracted to foreign spirits will eventually come back to the local favourite.
Data from drinks analyst Bernstein suggests that in the five years since the Chinese government’s crackdown on official corruption and extravagance was launched, the top end of the baijiu market has completely changed.
Where government and army officials once accounted for 70% of sales, that proportion has plunged to 10%, while individuals now take 70%, with the remaining 20% being business based.
Bernstein observed a “new affordability” that it said would boost volume sales in the ultra-premium segment by 15% a year to 2020, just-drinks reported.
Baijiu makers are also developing variants designed to appeal to younger consumers, such as a sparkling, ready-to-drink single-serve bottle and new blends that are less strong than the traditional 53% ABV product.
In addition to making a play for the affections of the current generation of 20-35 year olds, manufacturers believe that over the longer term this age group will in any case shift away from drinks like whisky and back to baijiu.
“As time goes by, the new generation will go back to Chinese spirits, especially as our country becomes stronger and stronger and they become more proud of being Chinese,” said Liao Bing, marketing director at Wuliangye Yibin, the second biggest baijiu producer.
At the other end of the scale is Diageo-owned Shuijingfang, whose company secretary Tian Jidong, holds a similar outlook.
“When the younger generation step into society, they will follow their leaders in the business occasion and they will drink baijiu,” he told just-drinks. “It happens naturally; we don't have to push it very hard.”
Meanwhile, Kweichow Moutai Group, China’s biggest baijiu producer, is cutting its total number of brands from 214 to 59, Caixin reported, and has told its subsidiary businesses to dispose of inventories of discontinued brands by the end of the year.
The move is intended to prevent them from both passing off poor quality drinks under the Moutai brand name and overusing the label in promotional activities.
Sourced from just-drinks, Caixin; additional content by WARC staff