A cock­tail made with

In­di­vid­u­als, groups and small firms are spread­ing the Chi­nese liquor cul­ture over­seas

China Daily (Canada) - - DEPTH - By EM­MAGON­ZA­LEZ em­magon­za­lez@ chi­nadaily.com.cn

Bai­jiu, the Chi­nese liquor dis­tilled from grains in­clud­ing sorghum, wheat and rice, is the most con­sumed spirit in the world. Yet, the col­or­less drink re­mains vir­tu­ally un­known out­side China.

Sev­eral for­eign en­trepreneurs have been try­ing to pop­u­lar­ize the spirit glob­ally.

In the sum­mer of 2014, four ex­pa­tri­ates — Wil­liam Isler, Si­mon Dang, Matthias Heger and Jo­hannes Braun — opened a small bar in a his­toric hu­tong in cen­tral Bei­jing, and claimed it is the world’s first bar ded­i­cated to bai­jiu.

Named Cap­i­tal Spir­its, it has soon be­came a hotspot among the ex­pa­tri­ates, thus chal­leng­ing the no­tion that bai­jiu is fail­ing to at­tract for­eign­ers and young Chi­nese.

This it did by sim­ply chang­ing the way the tra­di­tional liquor is con­sumed. In­stead of of­fer­ing the drink by the bot­tle as is cus­tom­ary, Cap­i­tal Spir­its sells the fiery liquor by the glass and mixed in stylish cock­tails.

The bar cre­ated such a buzz in the cap­i­tal that ex­ec­u­tives from the coun­try’s main bai­jiu pro­duc­ing re­gions in Sichuan and Guizhou prov­inces trav­elled to Bei­jing to see the phe­nom­e­non with their own eyes.

“Sev­eral bai­jiu ex­ec­u­tives came here to ask if we could repli­cate what we do here on a larger scale, es­pe­cially out­side China,” ex­plained Isler, co-founder of Cap­i­tal Spir­its. “The funny thing is that the bar started as a hobby and now we see a real busi­ness op­por­tu­nity here.”

The quar­tet de­cided to setup a con­sult­ing com­pany to help Chi­nese bai­jiu com­pa­nies with their in­ter­na­tion­al­iza­tion plans so that the clear liquor could start the conquest of for­eign mar­kets.

Their main fo­cus is to se­lect bai­jiu brands with taste pro­files that are more ac­cept­able to theWestern palate and then re­brand them for the in­ter­na­tional­mar­ket. The con­sul­tancy also helps pro­duc­ers to es­tab­lish an ac­ces­si­ble mar­ket price to lure novice drinkers in the West.

“Bai­jiu can be a very suc­cess­ful in­ter­na­tional drink. In fact, the cur­rent trend in the global spir­its mar­ket is sell­ing craft pre­mium prod­ucts with un­usual fla­vors,” added Isler. “Bai­jiu ticks all the boxes but you still need some­one that presents the prod­uct toWestern­ers.”

Although they refuse to dis­close the names of the com­pa­nies they have signed con­tracts with, they hint that big bai­jiu pro­duc­ers are ready to ex­pand to new­mar­kets.

“We are in a very cru­cial phase of the busi­ness. We are ex­plor­ing to have own­er­ship rights to the new­bai­jiu brands that we are cre­at­ing to­gether with the pro­duc­ers,” noted Heger, co-founder at Cap­i­tal Spir­its.

Last year, to­tal re­tail sales of bai­jiu reached508­bil­lionyuan ($78.7 bil­lion), ac­cord­ing to mar­ket re­search fir­mMin­tel.

The huge size of the do­mes­tic de­mand has tra­di­tion­ally dis­cour­aged lo­cal pro­duc­ers to pur­sue other mar­kets.

How­ever, a na­tion­wide aus­ter­ity cam­paign that started in 2012 had im­pacted sales of the high-end liquor in the do­mes­tic mar­ket, forc­ing man­u­fac­tur­ers to look at for­eign mar­kets. Ad­di­tion­ally, the do­mes­tic mar­ket is ex­pected to shrink in the com­ing years as young Chi­nese tend to pre­fer im­ported spir­its such as whiskey.

Although grow­ing slowly, ex­ports of the dis­tilled drink are still in­signif­i­cant com­pared with na­tional con­sump­tion.

In the Jan­uary-Septem­ber pe­riod of 2015, China ex­ported bai­jiu worth 2.9 bil­lion yuan, ac­cord­ing to na­tional sta­tis­tics. It mainly ex­ports to coun­tries in North­east Asia and South­east Asia through dis­tri­bu­tion cen­ters in Hong Kong and Sin­ga­pore. In­dus­try ex­perts cal­cu­late that ex­ports of the fiery drink rep­re­sent only 1 per­cent of the to­tal pro­duc­tion.

Mak­ing the drink pop­u­lar in the West re­mains a cru­cial strat­egy for bai­jiu pro­duc­ers to win the hearts of Chi­nese mil­len­ni­als back home.

“The end-goal is cer­tainly to sell some vol­ume of bai­jiu out­side China,” ex­plained Isler. “The real op­por­tu­nity still lies here in China. They want the drink to be cool in­ter­na­tion­ally so that young con­sumers here will pur­chase it.”

Matt Tr­usch, CEO of Bye­joe, an Amer­i­can pro­ducer and dis­trib­u­tor of bai­jiu mix drinks, is among the in­creas­ing num­ber of for­eign­ers in­volved in spread­ing the bai­jiu cul­ture over­seas.

Tr­usch se­tuphis­com­pany in 2013 to take on the mis­sion of plac­ing the high-al­co­hol drink in ev­ery in­ter­na­tional bar.

“I look at a bar as a mini United Na­tions. Ev­ery coun­try has its own rep­re­sen­ta­tive. There isMex­i­can Tequila, Rus­sian Vodka and French Cham­pagne,” pointed out Tr­usch. “Then, how come Chi­nese cul­ture with 5,000 years of in­flu­ence on the world stage is miss­ing in the bars?”

Tr­usch, who lived in Asia for 15 years, im­port­sa­light red sorghum bai­jiu base from China and then re-fil­ters it in a dis­tillery in Hous­ton to take away im­pu­ri­ties and to mix it with other in­gre­di­ents.

The com­pany’s best­seller is Dragon Fire, a bai­jiu drink con­tain­ing dragon fruit, ly­chee and hot chilies.

Although Bye­joe’s ini­tial goal was to con­vince West­ern­ers to drink bai­jiu, Tr­usch re­al­ized that many young Chi­nese con­sumers were also in­ter­ested in try­ing the mix drink.

For this rea­son, Bye­joe started in­tro­duc­ing its cre­ations into Chi­na­towns across Amer­ica. Nowa­days, 50 per­cent of its cus­tomers are Chi­nese liv­ing over­seas.

Although Bye­joe re­fuses to dis­close an­nual rev­enues, the com­pany says the busi­ness is ex­pand­ing quickly, reg­is­ter­ing an an­nual av­er­age growth of 300 per­cent.

Their drinks are now dis­trib­uted to restau­rants, bars and liquor stores in 15 states in the US, in­clud­ing a sup­ply agree­ment with Dis­ney World in Florida. The com­pany is also reach­ing 50 states in the coun­try, thanks to online sales.

Bye­joe, which has al­ready ex­pand­ed­toHongKong, says it hasalso re­ceived ex­pres­sions of in­ter­est from im­porters in Switzer­land, the United King­dom and Spain.

Los An­ge­les-based CNS Im­ports, one of the old­est and largest bai­jiu sup­pli­ers in the US, has been im­port­ing top bai­jiu brands from China for over 35 years.

The im­porter prides it­self in hav­ing more than 200 prod­ucts in its port­fo­lio, from the ul­tra pre­mium Moutai brand to HKB, a spe­cial blended mix drink de­signed for Western palates.

Steaven Chen, COO at CNS Im­ports, ex­plains that when his par­ents started the com­pany in the 1980s, they mainly fo­cused on sell­ing the liquor within Chi­na­towns.

Chen and his sis­ter took up the ba­ton to fo­cu­sone­d­u­cat­ing the West on the high-proof spirit, not­ing that US con­sumers are in­creas­ing­ly­keenon­the drink.

CNS an­tic­i­pates pos­i­tive sales growth of the liquor among both the Chi­nese com­mu­nity over­seas and the mass mar­ket, with the gen­eral mar­ket car­ry­ing a much higher long-term po­ten­tial.

“From our sales, we do know that bai­jiu is ex­pand­ing in the United States,” ar­gued Chen. “The largest spirit cat­e­gory in the world cer­tainly has a place in Amer­ica.”


A bar­tender mixes a bai­jiu- based cock­tail at Cap­i­tal Spir­its in Bei­jing.

Source: Min­tel CHINA DAILY

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