Baijiu blues: China’s Gen Z rewriting liquor industry as tastes change, consumption dips
Young Chinese are driving a shift from the traditional white spirit to fruity, lower-alcohol beverages, in a sign of as evolving lifestyles
Selecting which crops to grow each season can be a make-or-break decision for farmers. And in the ancient Chinese town of Baisha, famous for its liquor production, more and more are sowing seeds of change in a bid to capitalise on the evolving tastes of consumers.
Located in the southwestern megacity of Chongqing and home to the distillery of Chinese baijiu distilled-liquor brand Jiang Xiao Bai, the town is seeing its farmland increasingly being used to grow green plums instead of sorghum grain.
Both are key ingredients in producing certain spirits, but unlike sorghum, which is primarily used in traditional fiery baijiu distillation, green plums are used to produce much lighter and fruitier wine.
“Innovative low-alcohol drinks mark a very clear market trend in China,” said Fan Li, PR director of Bottle Planet, which owns Jiang Xiao Bai. “We are embracing changes in the market.”
To ensure their legacy continues, more Chinese liquor brands are innovating their products, with an increased focus on low-alcohol, fruit-flavoured beverages instead of grain-based baijiu, as they seek to expand their consumer base from predominantly middle-aged men to other demographics such as young urban women.
Industry insiders say the younger generation could upend China’s alcohol market, where baijiu, with around 50 per cent alcohol content, has long been the mainstream tipple of choice. In a shift from traditional alcohol consumption, which revolves around social rituals, they say the younger generation is prioritising self-indulgent experiences – with drinking occasions maturing from networking obligations to emotional companionship.
According to a 2022 report from consulting firm Ries, China had 490 million potential young alcohol consumers, and beverages with around 10 per cent alcohol were the most favoured among them.
Thus, the term “new alcoholic beverages” has been trending in the country in recent years, referring to innovative low-alcohol drinks that combine beverage flavours with a mild tipsy experience, including pre-mixed cocktails, fruit wines, infused liquors, sparkling alcoholic drinks, and fruit beers.
Meanwhile, compared with more expensive traditional baijiu, lower prices – usually around 100 yuan (US$14) per bottle – are also appealing to young consumers, according to industry insiders.
China’s low-alcohol beverage market will exceed 74 billion yuan (US$10.3 billion) in 2025, with an annual compound growth rate of 25 per cent, said Wang Qi, executive chairman of the China Alcoholic Drinks Association, according to Chinese media National Business Daily.
Bottle Planet’s plum wine brand, Meijian, has played a leading role in this market since its launch in 2019, Fan said.
In major Chinese cities, the sales of Meijian increased last year by more than 30 per cent, on average, according to the company.
“The revenue of the entire company grew by 16 per cent last year, with the main growth driver being Meijian green plum liqueur,” Fan said.
In contrast, and aligning with an overall consumption decline across China that has led to weakened purchasing power and waning demand for business networking, the growth of traditional baijiu sales has been slowing in recent years.
Some prestigious and luxury baijiu brands – including Kweichow Maotai and Wuliangye – have also introduced their own fruit wines.