China’s Baijiu Makers Adapt to Sober Gen-Z
It’s a fact that Gen-Z worldwide is drinking less alcohol than previous generations, the rise of non-alcoholic or zero proof drinks are clearly a testament to this. How is then baijiu, namely the national spirit of choice for China, expected to adapt to changing consumer behavior? The global economic environment, and clampdown on ostentatious wealth had also dampened liquor sales, forcing baiju makers to innovate in order to survive.
Changing Consumer Preferences
For one, milder versions of the grain-based liquor, which traditionally contains more than 50% alcohol, have been launched. Over the summer, Wuliangye Yibin, launched the “29° Crush On” baiju brand with only 29% of alcohol by volume as response to two consecutive periods of slow sales growth. It also hired singer Gloria Tang to promote the brand, and modernized packaging to appeal to younger consumers. Last September, and less than a month after launching, 29° Crush became the company’s third bestselling product on Wuliangye’s Tmall online store, generating sales for well over USD 800,000.
Ad Campaign For 29 Crush On
Rival distilleries, Anhui Gujing Distillery and Shede Spirits, have also launched new product lines in the 30% alcohol by volume category, and ZJLD Group went a step further and introduced its own brand of beer, Bull Market Super Beer, under the slogan “Open Bull Market, Good Fortune Comes.”
Morningstar Senior Analyst, Jennifer Song, highlights that China’s younger generation generally dislikes how strong baijiu is. This, couple with rising health awareness, have inevitably caused a drop in sales. Even darling brand Moutai is struggling with growth.
Sales Growth Data for Baijiu Distilleries
Challenging Economic Environment
Whilst consumer preferences are constantly evolving and are a key reason behind the slowdown, the global economic environment has also impacted sales. Over 90% of Chinese consumers prefer to buy baiju at a retail price point of USD 70 or lower, a price significantly lower than that of baiju bottles with a high alcohol content. For comparison, a 500ml bottle of 29° Crush On baijiu sells for USD 56, whereas a 52% alcohol content baijiu sells for almost three times as much (USD 140).
As reported in Jing Daily, “A 2022 survey by consulting firm Ries revealed 70% of 2,219 young Chinese interviewed in 25 cities viewed baijiu as unhealthy and its taste unpleasant. Nearly 40% preferred beverages with an alcohol content of around 10%.” Changing consumer preferences have pushed baijiu makers to launch sweeter drinks like fruity wines, or ready-to-drink cocktails.
Wuliangye recently started selling lychee wine, and Moutai launched its UMEET Blueberry Sparkling Wine product line in 2024. Moutai’s UMEET range comes in 5 different flavours, has a 6% alcohol volume content, and is priced at just CNY 118 per 375ml-bottle. It has also collaborated with other well-known national brands like Luckin’ Coffee, Dove, and Mengniu, on unique product propositions like the “Jiangxiang Latte”, “Maoxiaoling Chocolate”, and “Moutai Ice Cream”, respectively.
Wuliangye Lychee Wine
