China Will Need Alcohol Awareness Classes (Part 2)

by: Mike Miller

In my previous blog entry, I noted that it seems like everything is booming in China–the population, the economy, even booze consumption. The growing Chinese middle class is quickly joining its Western counterparts as a group who enjoys alcoholic libations. But as with many things in this ever-so-secretive country, we like to know what they are drinking.

Chinese Like the Hard Stuff

China has long been fond of hard-core grain alcohol. Usually they potent concoctions are made from sorghum, rice, wheat, or barley and baijiu is most commonly served during traditional occasions. These beverages are between 100 and 120 proof.

Being the national drink of China, baijiu accounts for almost the entire spirits market. For most Chinese men, it is strength that qualifies an alcoholic beverage as a "man's drink." The high potency is what keeps baijiu as the preferred drink among Chinese men during private and business drinking occasions.

FABs Dominate Chinese Market

In recent years, beer, hard cider, and flavored alcoholic beverages (FABs, which are sweet, relatively low-alcohol content beverages such as wine coolers) have dominated the Chinese alcoholic beverage sector, however, accounting for roughly 90 percent of the market's sales by volume in 2009 and 2010. Standard lager is the preferred beer in China, but sales of low-and no-alcohol beers are rising faster than those of lager.

Alcohol Sales Skyrocket

Spirits and wine share the remaining 10 percent of China's sales volume, with spirits contributing the larger proportion. In terms of spirits, baijiu, brandy, whiskey, and vodka have the highest sales volumes. Recently, an expanding elite consumer segment in China has boosted sales of premium spirits such as whiskey. Experts predict that whiskey sales will increase by 24 percent in the next five years.

Rising demand for premium whiskey is also prompting companies such as Diageo plc to boost its sales through exclusive retail stores in upscale areas of major Chinese cities.

Wine has recorded big increases in sales volume growth rates, with a 32 percent jump during 2008-09 and an estimated 24 percent jump during 2009-10. In comparison, the sales volume of China's beer, cider, and FABs market and spirits market expanded about 6 percent and 3 percent, respectively, during 2008-09 and 2009-10. Red wine contributes nearly 62 percent of total wine sales by volume, and white wine contributes another 38 percent.

Globally, China ranked first in both population of legal drinking age and overall alcoholic beverage sector sales volume in 2009.

With the growing drinking culture, China must also look to alcohol awareness. In a country that tightly controls virtually every facet of its citizens’ actions, perhaps mandatory alcohol awareness classes are in order before things get out of control.