Yes, the world is in the midst of a global pandemic.
Times are tough, and many businesses are feeling the pinch.
But for Allen Peng, owner of the Adash Bar in downtown Shanghai, business is actually better than last year.
He’s been a bartender for nearly eight years and believes that younger people are driving sales — but not where you might think.
According to CGTN.com, instead of traditional Chinese beer, or baijiu, they are exploring the concept of cocktails.
Data by online shopping website Tmall shows that consumers between 18 and 29 are responsible for half of the spirit sales on its platform – intoxicating news for foreign liquor makers.
The pandemic might have brought some challenges to the alcohol market at the beginning of the year, but consumption of spirits has now fully recovered, especially with the rising purchasing power of the young, CGTN.com reported.
“Most people come for a cocktail,” says Peng. “Younger consumers like something that looks interesting, something that smokes or that looks garish. Other consumers may only pay attention to the taste, no matter how it looks.”
But why are young people growing an appetite for spirits?
Some say social media might have a hand, while others believe the demand is driven by the idea of trying something fresh and modern, CGTN.com reported.
“It depends on where you are. It’s better to drink spirits with close friends. Baijiu is a Chinese tradition just for special occasions, and I seldom drink beer because it fills me up,” a young bar visitor told CGTN in Shanghai.
All this is heady news for foreign liquor makers.
Whiskey maker Beam Suntory, for example, saw its sales jump by nearly 50% year-on-year during the just-ended Double 11 shopping spree. And there is a surprising number of bartenders who have become very popular on Chinese social media, CGTN.com reported.
After weeks-long lockdowns, people are excited about getting out for a good time, driving up Suntory’s China sales.
“Social media helps us to have more communication,” said Daisuke Aso, managing director at Beam Suntory China.
“People can talk and post information. Basically, younger consumers are interested in new products, especially those that feature high quality and good brands. That’s the fundamental value that we see now in China.”
But these trends are not as new as one might think. A report by Tencent last year found that consumers aged between 18 and 24 increasingly prefer spirits and whiskey.
Data by food delivery platform Eleme shows that in the first half of 2019, cocktail orders in the southwestern city of Chengdu saw a year-on-year increase of more than 150%, CGTN.com reported.
“Regardless of the pandemic, China is very attractive. The economy is growing very strong. A lot of new things are happening here. China is definitely one of the markets leading the future trend. For us, it’s also very important,” said Beam Suntory’s Aso.
Jean-Etienne Gourgues, general manager of French wine and spirits company Pernod Ricard in China, said the company is planning to offer more promotions through social media platforms to boost online sales, China Daily reported.
“Whiskey is becoming increasingly popular in the China market. The biggest demographic worth paying attention to is millennials,” said Ryan Christianson, owner of Xanthos Wines, a winery in Napa Valley, California, and an industry expert.
“Now, the leaders in the China market are Japanese whiskey and then Scotch and to a lesser extent Irish whiskey. American whiskey has several industry leaders that have done very well in the Chinese mainland, such as Jack Daniels,” he said.
He added that US premium brands are gaining popularity in the Chinese mainland, as Chinese consumers are preferring more high-quality products.
By 2022, whiskey sales in China are expected to be about 19.13 billion yuan, up 38.6%, Euromonitor said.