China’s baijiu liquor is the most widely consumed spirit in the world, yet most of the Western world has never heard of it.
That fact has baijiu-maker Luzhou Laojiao Co. eyeing the West. The state-owned distillery in Sichuan province has joined with U.S. and European entrepreneurs in a venture called Ming River, seeking to introduce Americans and Europeans to the popular liquor, one bartender at a time.
It won’t be easy. Usually made from fermented sorghum, a common cereal crop, baijiu is virtually unknown outside China, and its strong alcohol content—typically 50% or more—limits its appeal. Even among China’s younger drinkers, it isn’t exactly considered hip.
‘It’s always associated with drunk older men doing deals or getting wasted at Chinese banquets. It’s not associated with the Western concept of partying.’ Chang Qian, a 28-year-old Beijing resident who grew up in Chengde, in the eastern province of Hebei
Baijiu notched $103 billion in retail sales inside China last year, according to data from Euromonitor, more than double the size of the whiskey market and triple the vodka market globally.
Its sales growth has slumped in China, partly because a corruption crackdown cooled a longtime practice of business people giving expensive bottles of baijiu to government officials.
Luzhou Laojiao’s initial $6 million all-cash investment in Ming River is small for the $9 billion company, but if successful, it could help open new markets for baijiu and help more Chinese consumer products migrate to the West, analysts say.
An expanded version of this report appears on WSJ.com.
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