Why Whiskey Brands are performing so well in China?
The tale of whiskey in China isn’t just about amber spirits poured into a glass. It’s about a market packed with potential, consumer trends, and a clash between Eastern and Western liquors. Let’s dive deep.
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China’s Whiskey Scene: The Numbers
China’s whiskey market, which encompasses the rich range of American, Canadian, Irish, Scotch, and other whisk(e)ys, has seen a roller coaster ride. Between 2015 and 2020, there was a dip at a CAGR of -2.39%, with sales plunging to CNY 5,123.01 Million in 2020 – a significant 23.28% tumble from 2019. But not all was gloom; 2017 sparkled, seeing growth at 7.65%.
The star performer? Irish Whiskey.
It boasted a whopping CAGR of 9.30% between 2015 and 2020. Meanwhile, Scotch Whisky had it rough with a CAGR of -6.50%, though it dominated with a 50.49% market share in 2020.
Despite accounting for merely 1% of China’s spirits market, the future looks golden. China imported a staggering $460 million worth of whiskey in 2021, skyrocketing by 91.7%. By 2025, industry experts predict the market to touch a cool $2.25 billion, a jump from $635 million in 2019.
The Whiskey Revolution: Why China’s Gen Z is All In
Move over, traditional spirits! Young Chinese consumers are tilting their glasses to whiskey. A stunning 47% of whiskey lovers are Gen Z, with 40% ready to splurge over $145 on a bottle. These are not just any drinkers – they’re urban, educated, and keen to explore.
Whiskey offers them a passport to the world, a taste of European heritage, and a symbol of individuality. From friendly gatherings to grand parties, this spirit is making its mark.
Big Players, Bigger Moves
Global giants like Diageo have tuned into the rhythm, witnessing a 20% YoY growth in whiskey sales in Asia Pacific during 2022’s first half. The Macallan even unveiled its largest travel retail boutique in Haikou, China, in December 2022.
However, the market isn’t without its challenges. While whiskey gains traction, baijiu, a local colorless liquor, reigns supreme, making up 69.5% of the alcohol market in 2021. Additionally, whiskey still seems to be a gentleman’s drink, with 88% of Gen-Z consumers being male.
Brands are innovating. Bowmore has blended its whiskey with elements from Chinese mythology, while Johnnie Walker partnered with designer Angel Chen for a Lunar New Year special.
Content Localization: The Game-Changer
The strategy? Go local to go big! International players are setting up shop in China.
Pernod Ricard’s distillery in Emeishan, Sichuan, was the first to be owned by an international group, beginning production in August 2021. Diageo isn’t far behind, announcing a $75 million distillery in Yunnan in November 2021.
Chinese brands are joining the race too. Tsingtao, a prominent beer brand, hinted at adding whiskey to its portfolio in 2020. source Jingdaily
Why Whiskey is the Future Spirit of China?
Baijiu’s grip is strong, but it’s aging. In 2021, the average age of a baijiu consumer was 45. On the other hand, whiskey appeals to the youth, resonating with modern lifestyles.
Whiskey brands need to foster connections with young consumers and educate them on the drink’s legacy. Marrying European traditions with Chinese culture will be their recipe for success.
And that’s the story so far. The final chapter? Only time (and perhaps a neat glass of whiskey) will tell.
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