China Spirits Rise

Global spirit companies like Pernod Ricard and Diageo are happily tipsy over the prospect of their products becoming the tipple of choice for Chinese consumers.

The category is one area of predicted growth in China as cash continues to flow into the pockets of the country’s ever-expanding upper crust. Many nouveau riche have money to burn, and want to show it off with luxury items, whether it be behind the wheel of an expensive car, strutting in pricey threads or sipping premium alcohols.

Currently, premium foreign spirit sales take just miniscule (about 1%) slice of the market. Though baijiu—literally ‘white alcohol’—is still the tipple of choice for many, foreign spirit brands are hoping to nurse a nascent interest in fine whiskies, bourbons and scotches. Their branding strategies are placing a heavy focus on presence.
 
Diageo, the world's largest spirits company, has invested heavily in marketing China's first vodka, Shanghai White, which it produces through its 20% stake in Sichuan-based Shui Jing Fang, a distiller with roots back to the Ming dynasty.

Diageo CMO Andy Fennel tells CNBC, “Being in the right bars in Shanghai, advertising online, on TV, in print and billboards is vitally important in China as it is in America or Europe."
 
He’s right, but that’s only half the, ahem, bottle. The other half is either teaching people how to drink these premium alcohols, or researching how people are incorporating these alcohols into their regular drinking habits and basing marketing campaigns on these styles.

For example, Chivas Regal currently dominates the scotch market, but rare is the sight of someone sipping on a glass of it splashed on the rocks alone or in a small group at a bar. Walk into any private room at a nightclub or private KTV lounge (karaoke lounge, with private rooms), and you’ll see groups customers pouring three or four glasses into a carafe filled with ice, then topping it off with several bottles of sweet green tea.

It tastes great, but isn’t anywhere near the way people savor fine whiskies in the West. Drinking is very much a social bonding experience, but is mainly done in private groups, in different places and in different ways than in Western countries. A successful marketing campaign will need to take these differences into account. —Laura Fitch, Beijing