Emma Rumney and Casey Hall
LONDON/SHANGHAI (Reuters) – Makers of China’s Baijiu liqueur are reformulating the fiery grain liquid to attract a wider customer base, including cocktail lovers in New York, Los Angeles and London, as sales slow at home.
While sales in China are still rising, leading baijiu producers such as Kweichow Moutai are facing much slower growth than in the past as younger generations increasingly opt for alternatives to the country’s national liquor.
Now, seeking new growth opportunities, some major producers of clear spirits are starting to offer them to Western consumers outside China for the first time.
Baijiu is little known in the US, UK and Europe, but many Western lovers will have to learn to love its taste.
Baijiu, which translates to “white alcohol,” typically contains between 40% and 60% alcohol. It is usually distilled from sorghum, although wheat, barley, millet or glutinous rice are also used.
Its taste varies depending on the region and production method. Some say it tastes like vodka. Another famous type is compared to soy sauce.
Efforts by Chinese companies to push baijiu outside of China come as Western beverage groups such as Pernod Ricard (EPA:) and Diageo (LON:) is making inroads into Chinese spirits territory, tempting Chinese twenty- and thirty-year-olds with Irish and Scotch whiskeys in particular.
Shede Spirits, based in China’s Sichuan province, sells two brands of baijiu in China and to Chinese consumers around the world. Its more expensive brand, Shede, costs up to $1,000 a bottle.
The company, controlled by Chinese conglomerate Fosun International, said it was holding taste tests to identify changes in the taste of the Shede brand in hopes of attracting the attention of non-Chinese drinkers.
Participants will come from the US, Australia, UK and other European countries, as well as places such as Japan and Singapore.
“We found that foreigners have a more subtle taste,” said Zhu Yingcai, head of sales and marketing at Shede, adding that compared to vodka, baijiu can be “heavy and very thick.”
Over time, Schede said, Westerners will begin to enjoy baijiu, and that could take market share away from other spirits, he said.
The company will sell an international version of its Shede baijiu for about $150 starting in September in Europe, the United States and Japan, Zhu said.
By comparison, online liquor retailers based in New York sell 750-ml bottles of Diageo’s Johnnie Walker Blue Label whiskey, the brand’s most expensive version, on their sites for $200 or more.
“VERY FLAVORABLE”
Rival baijiu maker Sichuan Yibin Wuliangye Group, headquartered in the city of Yibin in Sichuan province, has teamed up with Italian drinks group Campari (LON:) in a partnership aimed at promoting both companies’ brands in China and abroad.
The partnership, announced in November, is still in the “very early stages,” said Campari, whose brands include Aperol aperitif, Espolon tequila and Wild Turkey whiskey. Sales of Campari’s own brands in China are currently relatively small.
According to Campari, the companies will work together on marketing and branding, as well as jointly create products.
They’ve already developed a new version of the normally gin-based Negroni cocktail using Wuliangye’s “special blend” of baijiu. In September, they launched this cocktail in Shanghai and called it “Wugroni”.
Wuliangye did not respond to requests for comment.
China is the world’s largest alcohol market, thanks in large part to baijiu sales. Research firm Euromonitor estimates that the country’s liquor makers sold about $167 billion worth of baijiu in China alone in 2023. The company said it does not track baijiu sales outside China, which remain small.
Zhu said Shede’s international sales in 2023 will be about $5 million, but the company plans to increase them to $100 million within five to 10 years.
To achieve that goal, the company plans marketing on platforms like TikTok, through influencers in the U.S. and Europe, and eventually sports sponsorships, perhaps even major events like the Olympics, Zhu said.
At the Manhatta restaurant bar in New York City, customers can enjoy “Berry Me NYC” for $21. It contains small amounts of baijiu, along with pimms and shiraz.
Patrick Smith, senior beverage manager, said the baijiu is “extremely flavorful.” According to him, when you open a box of baijiu bottles, the smell hits your nose, even though they are shrink-wrapped.
The cocktail appeared quite recently. But the baijiu-containing predecessor was “in the middle” in popularity among other cocktails on the menu. Customers who tried them were curious about the taste, he said.
Manhatta’s cocktail uses baijiu from Ming River, a company created by three Westerners in partnership with large Chinese distillery Luzhou Laojiao.
In an effort to develop the international liquor market, Ming River sells its baijiu in 15 countries, including the United States, where customers range from bars and restaurants to retailers such as Costco (NASDAQ:) and tourists flocking to Disneyland.
($1 = 7.2176 yuan)