Move over tequila, here comes Chinese firewater

Mon Jun 3, 2013 1:32am EDT
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By Pete Sweeney

CHENGDU, China (Reuters) - Chinese baijiu, a flammable, pungent white liquor averaging a 110-proof wallop, is the world's most consumed form of liquor thanks to its popularity in China, but for the first time distillers are looking to develop export markets.

According to data from International Wine & Spirit Research, Chinese people drank over 11 billion liters of baijiu in 2012; the spirit, distilled from sorghum, wheat or rice, accounted for more than one-third of all spirits consumed in the world.

But as a new generation of Chinese drinkers discovers the imported spirits that were unavailable to their parents, baijiu risks losing that market share unless it creates new markets overseas.

"Baijiu hasn't been marketed to the West yet but I think it can be," said James Rice, managing director of Sichuan Swellfun Co Ltd, a baijiu maker in Chengdu, western China, in which London-based beverage multinational Diageo has taken a sizeable stake.

"People are interested in China and here's a piece of Chinese culture that can go right to your dinner table."

The opportunity has also attracted small entrepreneurs like David Zhou, who founded Everest Spirits LLC in the Washington D.C. metro area to import a Chinese baijiu and rebrand it for sale locally.

"We really want to go for mainstream U.S. consumers and we do believe they can accept it."

But Rice, and other distillers, have to deal with a major challenge: baijiu tends to make a terrible first impression.   Continued...