Currently, China’s baijiu industry is undergoing a period of deep adjustment, and there is an increasing trend among related enterprises to enter the whisky track. Recently, the publicly listed liquor company Tianyoudejiu officially entered the whisky track by listing three whisky products on the JD platform.
Cai Xuefei, the general manager of Zhiqu Consulting, told Securities Daily that Chinese baijiu enterprises are entering the whisky track to achieve differentiation in marketing categories. They actively embrace the young consumer market and, as complementary products to traditional baijiu, create new opportunities for companies and channels in niche markets, achieving category positioning, and other purposes.
Specifically, in June 2023, at the annual shareholder meeting of Gufengjiu for the year 2022, Liang Jinhui, the secretary of the Party Committee and chairman of Gufeng Group, stated that the company would also make arrangements in the whisky industry while focusing on the baijiu main business. The company has completed the craftsmanship of its whisky products, and product samples are currently in the experimental phase.
According to Tianyancha APP, in April 2023, Emeishan Gaoqiao Whisky Industry Co., Ltd. was established, with Sichuan Langjiu Co., Ltd. holding 85% of the shares. This move also signifies Sichuan Langjiu’s official entry into the whisky field.
Prior to this, several baijiu companies had already entered the whisky track. In July 2022, Luzhou Laojiao collaborated with the UK Kirin Liquor Group to launch several products blended from Scottish whisky and baijiu. In 2021, a subsidiary of Bright Food (Group) Co., Ltd., Bakus Wine, undertook the construction of a whisky and strong liquor base in Qionglai, Sichuan (Qionglai Distillery). In April 2019, Yanghe shares collaborated with the globally renowned liquor group Diageo to launch the first Chinese-style whisky, “Zhongshiji.”
The Chinese whisky market is also continuously improving. In April 2023, the Whisky Professional Committee of the China Alcoholic Drinks Association was established. The association released the group standard content framework for Chinese whisky product certification rules, specifying the basic requirements for Chinese whisky certification procedures and management, filling the gap in domestic whisky product certification.
Xiao Zhuqing, the chairman of Wuhan Jingkui Technology Co., Ltd., told Securities Daily that the homogenization of China’s baijiu industry is very serious, with market share concentrating on top brands and high marketing expenses. Some baijiu companies enter the whisky category using their brand advantages and marketing network resources to seek new growth points and achieve brand rejuvenation.
Currently, China’s baijiu industry is slowing down in development and is in a period of deep adjustment, while the whisky sector is growing rapidly. According to data released by the Wine Import and Export Branch of the China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal By-Products, from January to September 2023, China’s total alcohol imports amounted to $3.47 billion, a year-on-year increase of 9.8%, with a total import volume of 650 million liters, a year-on-year decrease of 10%. Overall, in the first three quarters of 2023, the import volume of spirits was 93.85 million liters, an increase of 12.03%; the import value was $1.983 billion, an increase of 34.04%. Under the substantial growth in volume and value, the first category advantage of imported liquor further expanded, with a market share increasing to 57.2%.
“The whisky market is developing well, and baijiu companies entering the whisky market are beneficial for creating a second growth curve, expanding product lines, and finding new growth points. This is also a manifestation of baijiu companies getting closer to young consumers, which is conducive to exploring new consumer markets,” said Zhu Danpeng, a senior researcher at the China Food Industry Research Institute.
Of course, during this process, liquor companies also face challenges. Cai Xuefei stated that currently, whisky still faces challenges such as insufficient sociality, narrow category culture, inadequate promotion of quality and taste, and weakness in the business and gift market.
In Cai Xuefei’s view, China produced whisky has significant shortcomings in culture and quality, and for a long time, it may only serve as a supplementary product, belonging to a niche market that cannot support large-scale performance growth for enterprises. However, for some distinctive regional brands, it does have breakthrough and positioning value.