Baijiu, World's Most Popular Liquor, Could Find International Market Outside China

It's The World's Most Popular Liquor. And It Tastes Like Paint Thinner
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By Pete Sweeney

CHENGDU, China, May 29 (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 litres 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 Washington-based Everest Distillery 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.

"I thought it tasted like paint-thinner and felt like a liquid lobotomy," said Michael Pareles, manager at the U.S. Meat Export Federation in Beijing. "However, like many other things in China, I eventually grew to like it."

Torsten Stocker, head of Greater China consumer practice at Monitor Group in Hong Kong, was skeptical about prospects for overseas expansion.

But he suggested the liquor could be better distributed to the swelling overseas Chinese community, which now depends on duty-free stores in airports to stay stocked.

Baijiu's punch makes it a tough sell in Western bar culture where people drink on an empty stomach. So does its fuel-like odour and its aftertaste. But the history of alcoholic beverages shows that nearly any taste can be acquired.

"Tequila has a very unusual flavour compared to more popular spirits," said Derek Sandhaus, industry consultant and author of a forthcoming book on baijiu appreciation.

"But through clever marketing, good cocktails, and good management, it's earned a place on the bar shelf. I see no reason why the world's most popular spirit can't do the same."

MAKING THE ADJUSTMENT

But an adjustment is still probably necessary.

Matt Trusch, a former China resident, founded a distillery called Byejoe USA that imports baijiu base from China, then re-filters it to make it more drinkable.

"We've made it much more palatable to American tastes."

Vinn Distilleries in Portland, Oregon, founded by a family of ethnic Chinese immigrants from Vietnam, is reproducing a generation-old baijiu recipe, and Vinn president Michelle Ly has marketed it - in very small volumes - to non-Chinese consumers.

Curiously enough, she said a group of investors had approached her with an idea to export her U.S.-made baijiu back to China, advertising it as a product of high quality control - an issue domestic baijiu brands have struggled with.

Baijiu expert Sandhaus thinks the best avenue for developing drinkers overseas is to follow the model of Japanese sake and market baijiu as the alcohol to drink with Chinese food. But he added that there is no need for distillers to rush.

"It will still be a very long time before baijiu stops being a very lucrative business in China."

Before You Go

Argentina's Political Beer
(01 of15)
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Bottles of Argentine craft beers 'Evita' and 'Montonera' are seen on a table at Peron Peron bar and restaurant, in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(02 of15)
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Bottles of Argentine craft beer 'Hipolita', in its three flavors, lager, dark and red, are displayed at the local headquarters of the Radical Party in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(03 of15)
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View of shelves displaying beer bottles including Argentine craft beers 'Hipolita', 'Doble K' and '17 de Octubre' (bottom shelf) in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(04 of15)
Open Image Modal
Bottles of Argentine craft beer 'Hipolita', in its three flavors, lager, dark and red, are displayed at the local headquarters of the Radical Party in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(05 of15)
Open Image Modal
Bottles of Argentine craft beers 'Evita', 'Montonera' and 'Doble K' are seen at Peron Peron bar and restaurant, in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(06 of15)
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A shrine for Eva Peron is lit with candles at the Peron Peron Bar in Buenos Aires, Argentina, Friday, April 12, 2013. Argentina is famous for its bare-knuckled politics, with iconic figures like General Juan Domingo Peron and his wife Evita, and a history of union battles and leftist guerrilla uprisings. Now beer-makers in Buenos Aires are capitalizing on this culture, brewing and selling artisan brands that celebrate the countrys political icons. The Peron Peron bar started the trend when it released its blonde beer, Evita. (AP Photo/Victor R. Caivano) (credit:AP)
(07 of15)
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In this Feb. 23, 2013 photo, political activists from the Radical Party produce artisan beer named after President Hipolito Yrigoyen at their committee center in Buenos Aires, Argentina. Argentina is famous for its bare-knuckled politics, with iconic figures like General Juan Domingo Peron and his wife Evita, and a history of union battles and leftist guerrilla uprisings. Now beer-makers in Buenos Aires are capitalizing on this culture, brewing and selling artisan brands that celebrate the countrys political icons. (AP Photo/Victor R. Caivano) (credit:AP)
(08 of15)
Open Image Modal
Bottles of Argentine craft beers 'Evita', 'Montonera' and 'Doble K' are seen at Peron Peron bar and restaurant, in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(09 of15)
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Artisan beers named after political figures are displayed at the Peron Peron Bar in Buenos Aires, Argentina, Friday, April 12, 2013. Argentina is famous for its bare-knuckled politics, with iconic figures like General Juan Domingo Peron and his wife Evita, and a history of union battles and leftist guerrilla uprisings. Now beer-makers in Buenos Aires are capitalizing on this culture, brewing and selling artisan brands that celebrate the countrys political icons. The Peron Peron bar started the trend when it released its blonde beer, Evita. Now it also offers Montonero, a dark ale named after the 1970s guerrilla group, and the Double K, in honor of Argentine leader Cristina Fernandez and her late husband, President Nestor Kirchner. (AP Photo/Victor R. Caivano) (credit:AP)
(10 of15)
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In this Feb. 23, 2013 photo, beer named after Argentina's former President Hipolito Yrigoyen sits on display at the committee center of the Radical Party in Buenos Aires, Argentina. Argentina is famous for its bare-knuckled politics, with iconic figures like General Juan Domingo Peron and his wife Evita, and a history of union battles and leftist guerrilla uprisings. Now beer-makers in Buenos Aires are capitalizing on this culture, brewing and selling artisan brands that celebrate the countrys political icons. (AP Photo/Victor R. Caivano) (credit:AP)
(11 of15)
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In this Feb. 23, 2013 photo, political activists from the opposition Radical Party brew blonde, red and black beers named after President Hipolito Yrigoyen at their committee center in Buenos Aires, Argentina. Argentina is famous for its bare-knuckled politics, with iconic figures like General Juan Domingo Peron and his wife Evita, and a history of union battles and leftist guerrilla uprisings. Now beer-makers in Buenos Aires are capitalizing on this culture, brewing and selling artisan brands that celebrate the countrys political icons. (AP Photo/Victor R. Caivano) (credit:AP)
(12 of15)
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A bartender serves 'Montonera' draft beer at Peron Peron bar and restaurant, in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(13 of15)
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A man grinds malt to make Argentine craft beer 'Hipolita' at the local headquarters of the Radical Party in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(14 of15)
Open Image Modal
Bottles of Argentine craft beer 'Hipolita', in its three flavors, lager, dark and red, are displayed at the local headquarters of the Radical Party in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)
(15 of15)
Open Image Modal
Bottles of Argentine craft beers 'Evita', 'Montonera' and 'Doble K' are seen at Peron Peron bar and restaurant, in Buenos Aires on February 19, 2013. The major political parties of Argentina produce craft beers. The Peronist Party (ruling) offers a lager called 'Evita', a red beer called 'Montonera', a stout beer called '17 de Octubre' and a strong beer called 'Doble K', which can be tasted at 'Peron Peron' bar and restaurant. On the other hand, the Radical Party offers 'Hipolita' in three flavors: lager, dark and red, in the local headquarters. AFP PHOTO / JUAN MABROMATA (Photo credit should read JUAN MABROMATA/AFP/Getty Images) (credit:Getty Images)