Diageo has announced a new joint venture in China with Jiangsu Yanghe Distillery, inaugurating the partnership with the release of a new whisky.
Zhong Shi Ji is billed as “a premium taste of East and West”, a new-to-world whisky specially crafted by master blenders and distillers from both Scotland and China.
According to the IWSR, China is the world’s largest total beverage alcohol market, delivering retail sales value of $178 billion per year. The largest category is Baijiu, also known as Chinese white spirit. International spirits currently make up around 3% of the market, with Scotch being the second largest international category.
The product is a collaboration between Diageo’s Scotch Whisky blender Craig Wallace and Zhou Xinhu, a Chinese Baijiu master at the China Alcoholic Drinks Association.
CH Chu, managing director of Diageo Greater China, said: “Diageo has long regarded China as one of the world’s most important emerging markets for whisky. With accelerated urbanisation and a fast-growing middle class, Chinese consumers are demanding both choice and quality. We believe that Zhong Shi Ji can play an important role in the Chinese dining occasion, launching a new era for whisky drinkers in China. Through our new partnership with Yanghe, we are well placed to leverage our strengths in craftsmanship, brand building and distribution.”
Diageo is mainly targeting the whisky at meal occasions, with McKinsey research suggesting that 80% of alcohol consumption in China takes place at mealtimes.
Although many Western European countries are drinking less alcohol today than they were 20 years ago, consumption in China has actually increased since the start of the century, not least because of its prosperous economy and emerging middle class.
According to the Organisation for Economic Co-operation and Development (OECD), China consumed 3.1 litres of pure alcohol per person in 2000 and 5.7 litres per person in 2016 – the most recent year for which the OECD has figures. There are similar consumption patterns in Brazil and India – two other members of the so-called ‘BRIC’ economies.
Zhu Wei, vice-president of Jiangsu Yanghe Distillery, was optimistic for the new joint venture and its first product release: “Zhong Shi Ji is a gift from both Yanghe and Diageo. The two companies are committed to this exciting new partnership and to leveraging our combined expertise in supply chain, distribution and brand marketing. I firmly believe Zhong Shi Ji will quickly become Chinese consumers’ new favourite, with its ultra-smooth taste and superior quality, created through unique processes and craftsmanship from both China and the West.”