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Written by Emma Romney and Casey Hall
LONDON/SHANGHAI (Reuters) – Makers of Chinese liqueur baijiu are reformulating the fiery grain liquid to appeal to a broader customer base including cocktail drinkers in New York, Los Angeles and London, as sales slow at home.
While sales in China are still rising, major baijiu manufacturers like Kuizhou Maotai are facing much slower growth than in the past as younger generations increasingly choose alternatives to the country’s national alcoholic beverage.
Now, in an attempt to find new pockets of growth, some major makers of colorless spirits have begun offering them to Western consumers outside China for the first time.
Baijiu is little known in the US, UK and Europe, however, many Western wine drinkers must learn to love the flavour.
Baijiu, which translates to “white alcohol,” typically 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 according to the region or method of production. Some say it’s similar to vodka. Another well-known type is similar to soy sauce.
The moves by Chinese companies to push Baijiu out of China come as Western beverage groups like Pernod Ricard (EPA:) and Diageo (LON:) is stepping into the sphere of Chinese liquor makers, luring China’s twenty- and thirty-somethings with Irish and Scotch whisky, in particular.
Shede Spirits, based in China’s Sichuan province, sells two baijiu brands in China and to Chinese consumers globally. Its most expensive brand, Shede, costs up to $1,000 per bottle.
The company, controlled by Chinese conglomerate Fosun International, said it was holding tasting sessions to determine flavor modifications to the Shedi brand, in the hope of attracting non-Chinese wine drinkers.
Participants will come from the United States, Australia, Britain and other European countries, as well as places such as Japan and Singapore.
“We have discovered that foreigners taste better,” said Zhou Yingcai, head of sales and marketing at Shedi, adding that compared to baijiu vodka it can be “very heavy and thick.”
Over time, Sheedy believes Westerners will enjoy baijiu, and could steal market share from other spirits, he added.
The company will sell the international version of its Shede baijiu for about $150 starting in September in countries in parts of Europe, the United States and Japan, according to Zhou.
By comparison, New York-based online alcohol retailers are selling 750-milliliter bottles of Diageo’s Johnnie Walker Blue Label whisky, the most expensive version of the brand, for $200 or more on their websites.
“Very fragrant”
Baijiu rival Sichuan Yibin Wuliangye Group, based in Sichuan’s Yibin City, has teamed up with Italian beverage group Campari (LON:) in a partnership aimed at promoting both companies’ brands in China and internationally.
It is still in its “very early stages,” said Campari, whose brands include Aperol aperitif, Espolon tequila and Wild Turkey whisky. Campari’s sales of its own brands in China are currently relatively small.
Campari said the companies will work together on marketing, brand promotion and joint product creation.
They’ve already developed a twist on the Negroni cocktail, which is typically made with gin, using a “special blend” of Wuliangye baijiu. They launched this cocktail in Shanghai in September and named it “Wugroni”.
Wulianji did not respond to a request for comment.
China is the world’s largest alcohol market, thanks in large part to sales of baijiu. The country’s alcoholic beverage makers sold nearly $167 billion worth of baijiu in China alone in 2023, according to estimates from research firm Euromonitor. It said it does not monitor baijiu’s sales outside China, which remain small.
Shede’s international sales were about $5 million in 2023, but it aims to increase it to $100 million within 5 to 10 years, Chu said.
To achieve this, it plans to market on platforms like TikTok, via influencers in the US and Europe, and eventually sponsor sports, perhaps even major events like the Olympics, Zhu said.
At Manhatta’s bar in New York, customers can enjoy a “Berry Me NYC” drink for $21. It contains a small amount of baijiu, along with Pimms and Shiraz.
Baijiu is “very aromatic,” said Patrick Smith, senior beverage director. He added that when you open a box of baijiu bottles, the smell reaches the nose even though it is packaged.
The cocktail was only recently introduced. But the predecessor containing baijiu was “in the middle” in terms of popularity versus other cocktails on the list. Customers who tried it were curious about the flavor, he said.
The Manhata cocktail uses baijiu from Ming River, a company set up by three Westerners in partnership with major Chinese distillery Luzhou Laojiao.
Aiming to develop an international market for the spirit, Ming River sells its spirits in 15 countries including the United States where customers range from bars and restaurants to retailers like Costco (NASDAQ:) and tourists flocking to Disneyland.
($1 = 7.2176 RMB)
