New Consumption Observation | Foreign Liquors Break Out of Niche Positioning, Chinese and Foreign Liquor Enterprises Compete to Produce Local Whisky

Whisky, whose demand is soaring, is breaking out of its niche positioning in the domestic market. The expansion of its scale is attracting a large number of Chinese and foreign liquor enterprises to enter the market.

On December 13th, French liquor brand Pernod Ricard announced the completion and opening of the Diechuan Malt Whisky Distillery Experience Center in Emeishan City, Sichuan Province, and launched pure malt whisky originally produced in China. According to Guo Binchen, Chief Executive Officer of Pernod Ricard China, this series of whisky products is exclusively developed for the Chinese market, and in the future, it will also cater to the more diversified needs of Chinese consumers for liquor consumption.

Whisky entered China as early as the 19th century and has always been positioned as a high-end and niche product, but it has witnessed high demand and high growth in the Chinese market recently. Statistics from Zhiyan Consulting show that the scale of China's whisky market has grown rapidly from approximately 1 billion yuan in 2015 to nearly 5 billion yuan this year, and has maintained a high growth rate of over 10% in recent years.

The rise of this consumption trend has also made local Baijiu (a traditional Chinese distilled liquor), which has an absolutely dominant market share in China, begin to move closer to whisky. To cater to new market demands, Baijiu enterprise Jingjiu Group has integrated whisky base wine with light-flavor Baijiu and launched the whisky-flavored herbal spirits "Jingshi". In addition, liquor-related enterprises such as Gujinggong Liquor, Yanjing Co., Ltd., and Tsingtao Brewery have all publicly revealed that while focusing on their core businesses (such as Baijiu production), they will also make efforts in the track of whisky and other distilled liquors.

Regarding considerations for the location of distilleries, in addition to proximity to high-quality raw material sources, proximity to the market is also one of the key factors. It is understood that the reason why Pernod Ricard chose Emeishan as the site is not only to produce high-quality liquor, but more importantly, to build a local whisky brand. In fact, Shanghai Bacchus Liquor Industry has already built and put a factory into operation in Qionglai, Chengdu; Langjiu has also established Gaoqiao Whisky Liquor Co., Ltd. in Emeishan.

The fact that domestic and foreign giants have successively entered the market to build whisky distilleries in China essentially stems from their recognition of China's domestic consumption potential. Data from JD.com shows that the transaction volume of single malt whisky increased by 48% year-on-year in the past year. According to Meituan data, since May last year, the scale of nighttime consumption in bars has increased by more than 55% year-on-year, and whisky is undoubtedly the best-selling product in this category.

At present, the whisky market in China presents a landscape where local brands and international brands (such as Pernod Ricard) jointly compete in the blue ocean. In the opinion of Song Shuyu, Chairman of the China Alcoholic Drinks Association, international distilled liquors like whisky have gradually gained popularity among young consumers. Over time, new consumption demands, habits, and cultures have continuously evolved from niche categories to mainstream ones, bringing about a new pattern of diversified development for China's liquor industry.

Insiders in the industry predict that branding and quality improvement are the main driving forces for optimizing the structure of new liquor consumption and enhancing market value. Song Shuyu pointed out that for liquor enterprises, product R&D should integrate local characteristic terroir and accumulated humanistic elements, align well with consumption scenarios, and be based on future market demands. Liquor products that combine "scientific and technological innovation + cultural creativity" will shine brilliantly in the consumer market.