Lift­ing spir­its

Young, so­phis­ti­cated con­sumers boost sales of for­eign al­co­hol

China Daily (Hong Kong) - - FRONT PAGE - By XU JUNQIAN in Shang­hai xu­jun­qian@chi­nadaily.com.cn

For Huang Qi­fang, the high­light of her wed­ding ban­quet in 2015 was not the lux­u­ri­ous feast at the JW Mar­riott ho­tel in Shang­hai, nor show­ing off the Korean-style wed­ding pho­tos she spent tens of thou­sands of yuan on.

Rather, it was the sight of a soli­tary bot­tle of Ma­callan 12 Year sin­gle malt whisky that was on one of the 20 ta­bles. It is cus­tom­ary for the new­ly­weds to demon­strate their grat­i­tude to their guests by serv­ing pre­mium al­co­hol at the ban­quet. The most com­mon op­tion is bai­jiu.

“Every­one was tak­ing pho­tos of the bot­tle and post­ing it on their so­cial net­works, call­ing me the first and coolest bride they have seen to of­fer whisky to guests,” said Huang.

“And it was only priced at 380 yuan ($56) a bot­tle back then, much cheaper than the Wu­liangye (Chi­nese liquor) I put on the other 19 ta­bles,” added the 33-yearold Shang­hai na­tive.

Huang and her hus­band — they both used to work in the food and bev­er­age in­dus­try in Shang­hai — are avid drinkers, spend­ing an av­er­age of 6,000 yuan on wine and spir­its ev­ery month, with whisky ac­count­ing for the lion’s share.

“Some men splurge on cars. Some women splurge on shoes. We hap­pen to share an in­ter­est in al­co­hol,” said Huang, who ad­mit­ted that she en­joys sip­ping “what­ever gets her tipsy” with her hus­band ev­ery night since they got mar­ried.

In their home, their al­co­hol col­lec­tion com­prises craft beer, wine, gin and whisky.

“The tougher the day is, the pricier the drink we have. And whisky is def­i­nitely on the top,” she added.

The cou­ple is among the horde of young con­sumers to­day who are driv­ing growth in the Chi­nese liquor mar­ket which has been stag­nant since 2015 fol­low­ing the in­tro­duc­tion of the anti-cor­rup­tion cam­paign two years be­fore. Sales of pre­mium liquors like Chi­nese bai­jiu and brandy were se­verely af­fected by the crack­down as govern­ment of­fi­cials were banned from gift­ing lux­ury items.

A 2014 re­port by Di­a­geo, the world’s big­gest pro­ducer of spir­its, showed that the com­pany’s rev­enue in China dropped by 14 per­cent that year, a re­sult of the anti-cor­rup­tion cam­paign.

But many for­eign spirit brands and man­u­fac­tur­ers have man­aged to weather the sit­u­a­tion by read­just­ing their strate­gies in China to fo­cus on the younger gen­er­a­tion. In 2017, whisky sales in China soared by 19.5 per­cent year-on-year to hit 17.4 mil­lion liters in terms of im­ports, ac­cord­ing to the Fi­nan­cial Times. Chi­nese lux­ury in­dus­try watcher Ru­pert Hoogew­erf, the founder and pub­lisher of Hu­run Re­port, once said that more than 80 per­cent of the young gen­er­a­tion in China has in­creased their whisky con­sump­tion since 2015, with about 70 per­cent in­di­cat­ing that they would con­tinue to drink more whisky over the next three years.

Ac­cord­ing to re­search by Hu­run Re­port, a lux­ury pub­lish­ing group based in Shang­hai, the av­er­age re­tail price of a bot­tle of whisky in China is now 520 yuan, while about 30 per­cent of the con­sumers they sur­veyed said they are ready to spend more than 1,000 yuan on a pur­chase.

Di­a­geo said that its sales in China in the first half of this year had grown 32 per­cent from the same pe­riod last year.

“In China, the con­sump­tion of brown liq­uids such as cognac and whisky has yet to grow. But we think the po­ten­tial is great. Right now pen­e­tra­tion is only at less than 1 per­cent. This means there is a lot more room for growth,” said Jeff Lin, mar­ket­ing direc­tor of Di­a­geo China. In China, the world’s largest al­co­hol con­sumer, the sale of lo­cal white grain liquor, or bai­jiu, still far ex­ceeds that of im­ported spir­its. Ac­cord­ing to data from IWSR, an in­ter­na­tional al­co­hol bev­er­age mar­ket data and anal­y­sis provider, im­ported spir­its ac­count for less than 2 per­cent of the over­all al­co­hol mar­ket in China.

In July, lux­ury ho­tel brand Penin­sula Shang­hai part­nered Scot­tish la­bel Ma­callan to launch an ex­clu­sive 1991 vin­tage sin­gle malt whisky. There are only 220 bot­tles of this limited edi­tion liquor which was aged in sherry oak casks. The price of the bot­tles range from 18,888 to 88,888 yuan, de­pend­ing on the “aus­pi­cious­ness” of their se­rial num­bers.

“We have al­ready ven­tured into col­lab­o­ra­tions with pres­ti­gious cham­pagne and wine houses so we felt that it is now time for us to try to move into the world of spir­its, es­pe­cially whisky,” said Fred­erik Van den Borre, the ho­tel’s food and bev­er­age man­ager.

“I don’t think there is a par­tic­u­lar trig­ger event that has boosted whisky con­sump­tion in China. It’s just that with the ed­u­ca­tion of dif­fer­ent brands, and the in­tro­duc­tion of the Miche­lin restau­rant guide, young lo­cal con­nois­seurs have grown more so­phis­ti­cated and are look­ing for a dif­fer­ent ex­cite­ment on the palate,” he added.

An­drew Khan, vice pres­i­dent of LVMH’s Moet Hen­nessy Di­a­geo China mar­ket­ing de­part­ment, agreed that tar­get­ing the young crowd is the way to go these days. The brand’s two key growth en­gines, he said, are the US and China mar­kets.

Sales of for­eign al­co­hol brands used to be se­verely af­fected by the na­tional an­ti­cor­rup­tion cam­paign, but many la­bels are now mak­ing a resur­gence thanks to young and so­phis­ti­cated con­sumers who are eager to ex­plore new tastes

In April, Moet Hen­nessy, which has been in China as early as 1869, launched its 12-day “Hen­nessy De­clas­si­fied” cam­paign in Xi­a­men, Fu­jian prov­ince, that mim­icked the set­tings of the pop­u­lar the­atri­cal pro­duc­tion Sleep No More by of­fer­ing young con­sumers an im­mer­sive ex­pe­ri­ence about the pro­duc­tion process of its cognac. The event re­ceived nearly 4,000 vis­i­tors, with about 1,400 sign­ing up for the brand’s tast­ing classes.

“I think the op­por­tu­nity for spir­its is enor­mous. It’s a long game for us, which means that we are only at the be­gin­ning de­spite hav­ing been in China for many years now,” said Khan.

“There are a lot of peo­ple out there who have lit­tle knowl­edge about Hen­nessy and we be­lieve that is why they are not drink­ing it. So it’s very im­por­tant for us to share knowl­edge so that we can in­tro­duce our cognac to the new gen­er­a­tion of con­sumers.”

Part of Moet Hen­nessy’s ef­forts to drive brand aware­ness in­volve work­ing with Chi­nese restau­rants where chefs de­sign dishes that pair well with X.O. and V.S.O.P cognac. The first din­ing es­tab­lish­ment the brand has part­nered with in Shang­hai is Can­tonese restau­rant Yant­ing, which is lo­cated in the St Regis Shang­hai Jing’an.

There, Liu Jun­ping, the restau­rant’s chef, has paired the cognac with Shunde cui­sine, which is be­lieved to be the source of Can­tonese cui­sine. Shunde cui­sine is de­fined by its fo­cus on pre­serv­ing the orig­i­nal fla­vors of the in­gre­di­ents. Dishes are never deep fried or slathered with heavy gravy or sauces.

For the cognac pair­ing menu, which is avail­able till the end of the year, eight dishes, rang­ing from cold ap­pe­tiz­ers to the cui­sine’s sig­na­ture fish soup, are com­ple­mented with two types of spir­its.

“Most of the dishes we have picked fea­ture very light fla­vor­ing so that din­ers can still sa­vor the taste of the two spir­its af­ter en­joy­ing the food,” said Liu, who ad­mit­ted this is also his first time pair­ing his cre­ations with Western spir­its.

“I think for who­ever is in­ter­ested in food and bev­er­age, the sur­prise al­ways lies in the con­flict or con­trast be­tween dif­fer­ent fla­vors and tex­tures. What na­ture has gifted us has in­spired us to cre­ate a va­ri­ety of tricks on the palate,” he added.

In China, the con­sump­tion of brown liq­uids such as cognac and whisky has yet to grow. But we think the po­ten­tial is great. Right now pen­e­tra­tion is only at less than 1 per­cent. This means there is a lot more room for growth.”

Jeff Lin mar­ket­ing direc­tor of Di­a­geo China

PHO­TOS PRO­VIDED TO CHINA DAILY

With the ed­u­ca­tion of dif­fer­ent brands, and the in­tro­duc­tion of the Miche­lin restau­rant guide, young lo­cal con­nois­seurs have grown more so­phis­ti­cated and are look­ing for a dif­fer­ent ex­cite­ment on the palate.

PHO­TOS PRO­VIDED TO CHINA DAILY

Liu Jun­ping (top left), chef of the Can­tonese restau­rant Yant­ing in Shang­hai, has paired the cognac with Shunde cui­sine, which is be­lieved to be the source of Can­tonese cui­sine.

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