Table of Contents
Overview
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- What you need to know
- Covered in this Report
- Definition
Executive Summary
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- The market
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- Figure 1: Retail market volume of Western spirits in China, 2013-17
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- Figure 2: Retail market value of Western spirits in China, 2013-17
- Companies and brands
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- Figure 3: Market share of leading Western spirit players, by value, China, 2015 and 2016
- The consumer
- Penetration declines but category rankings remain stable
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- Figure 4: Penetration on different alcoholic drinks, April 2017 vs February 2016
- Gin is the most frequently drunk Western spirit type
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- Figure 5: Drinking frequency on different alcoholic drinks, April 2017
- Festivals and special events have the biggest consumption increase
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- Figure 6: Consumption occasions in the last 12 months, April 2017 vs February 2016
- History of winery and brand reputation associated more with premium
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- Figure 7: Perceptions towards premium, April 2017
- What we think
Issues and Insights
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- How companies and brands can optimise their portfolios?
- The facts
- The implications
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- Figure 8: Mid-price-range whisky or brandy brands, UK and US, 2014-17
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- Figure 9: Selected limited Western spirit premium extension, international market, 2016 and 2017
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- Figure 10: Bombay Sapphire Distilled London Dry Gin, Germany (imported from UK), 2015 and 2017
- What opportunities are there for female drinkers?
- The facts
- The implications
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- Figure 11: Selected spirits with limited or health claims, international markets, 2014-17
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- Figure 12: Selected flavoured Western spirits, international market, international market, 2016 and 2017
- What brands could do to encourage higher consumption frequency?
- The facts
- The implications
The Market – What You Need to Know
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- Western spirits market is small in China
- Lack of knowledge suppresses Western spirits consumption
- Premiumisation and desire for new experiences may drive consumption
- Stability remains across segments
Market Size and Forecast
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- Western spirit is a niche alcohol type in China
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- Figure 13: Total consumption/volume sales, Chinese baijiu vs Western spirits, China, 2012-17
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- Figure 14: Spirits – Total market volume consumption per capita (population), China vs international markets, 2012-17
- Retail volume and value of Western spirits are recovering slightly
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- Figure 15: Retail market volume of Western spirits in China, 2013-17
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- Figure 16: Retail market value of Western spirits in China, 2013-17
Market Factors
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- Lack of knowledge is the limitation for Western spirits consumption
- Premiumisation and desire for new experiences
- Geographic coverage could be expanded
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- Figure 17: Haiguan import volume, by segment, top five regions, China, 2016
Market Segmentation
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- Overall stable across all segments in retail market volume and value
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- Figure 18: Retail volume segmentation of Western spirits, China, 2013-16
- Figure 19: Retail value segmentation of Western spirits, China, 2013-16
- Brandy/cognac and whisky/bourbon are the leading segments
- Rum, gin and liqueur’s overall segment increases thanks to innovation
- Vodka and tequila may want to target Chinese baijiu drinkers
Key Players – What You Need to Know
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- Top four players have the majority share in volume and value
- Various competitive strategies from campaign to online shopping
- Chinese food pairing with Western spirits
- Global premium gin innovations that can inspire China
Market Share
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- Pernod Ricard remains the category leader yet had market share loss
- Diageo had lost more volume share than value share
- Rémy Cointreau had both volume and value share win
- LVMH had better performance and market share increase in 2016
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- Figure 20: Market share of leading Western spirit players, by volume, China, 2015 and 2016
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- Figure 21: Market share of leading Western spirit players, by value, China, 2015 and 2016
Competitive Strategies
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- Pernod Ricard: via a massive brand portfolio and acquisition
- Pernod Ricard: successful prevention campaign and cultural education
- Rémy Cointreau: driving online sales
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- Figure 22: Price comparison of selected Rémy Martin ranges before and during 6.18 JD and Tmall shopping festivals, China, 2017
- Figure 23: Rémy Martin official Tmall 6.18 promotion, China, 2017
- Compete on food pairing – Martell Distinction and Moët Hennessy
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- Figure 24: Hennessy’s “Re-discover Chinese Taste”
- LVMH: Hennessy’s strategy to target younger consumers
Who’s Innovating?
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- Global: Flavour becomes a key driver for spirits
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- Figure 25: Top flavours of new spirits, global, 2015-16
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- Figure 26: Selected spirits with herbs/herbal or spice/spicy flavours, global, 2016
- Global: Premium and premium extensions
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- Figure 27: Diageo Haig Club Clubman, UK, 2016
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- Figure 28: Famous Grouse range, international markets, 2015-17
- Global and China: premium gin
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- Figure 29: Selected premium gin, international market, 2016
- China: Pernod Ricard – fighting counterfeits
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- Figure 30: A “scannable bottle” of Pernod Ricard, China, 2017
- China: Rémy Cointreau – Tech-savvy with local social media
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- Figure 31: Rémy Cointreau Club connected bottle, China, 2016 and 2017
The Consumer – What You Need to Know
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- Brandy/cognac is the most penetrated Western spirit
- High earners make the majority heavy and medium users of Western spirits
- North region enjoys more on social, festivals and special occasions
- Men associate “premium” with technical product aspects
- Men and women have different learning preference about Western spirits
- Visiting the Western spirit factory/winery abroad most desired
Penetration on Different Alcoholic Drinks
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- Brandy/cognac is the most penetrated Western spirit but needs to drive more frequent consumption
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- Figure 32: Penetration on different alcoholic drinks, April 2017
- Penetration declines but category rankings remain stable
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- Figure 33: Penetration on different alcoholic drinks, April 2017 vs February 2016
- Liqueur remains the type that is preferred by women
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- Figure 34: Penetration on different alcoholic drinks, by gender, April 2017 vs February 2016
Drinking Frequency on Different Alcohol Drinks
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- Gin is the most frequently drunk Western spirit type
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- Figure 35: Drinking frequency on different alcoholic drinks, April 2017
- High earners make the majority of heavy and medium users
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- Figure 36: Drinking frequency on different alcoholic drinks, by monthly household income, April 2017
Consumption Occasions
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- Festivals and special events have the biggest consumption increase
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- Figure 37: Consumption occasions in the last 12 months, April 2017 vs February 2016
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- Figure 38: Consumption occasions in the last 12 months, cross penetration on different Western spirits, April 2017
- North region enjoys more on social, festivals and special occasions
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- Figure 39: Consumption occasions in the last 12 months, by regions, April 2017
- Figure 40: Selected Western spirits, China and international market, 2016 and 2017
Perceptions towards Premium
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- History of winery and brand reputation associated more with premium
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- Figure 41: Perceptions towards premium, April 2017
- Men predominantly hold the technical view on premium
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- Figure 42: Perceptions towards premium, by gender, April 2017
Western Spirits Knowledge of Interest
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- Branding and product specification are most needed for improving Western spirits knowledge
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- Figure 43: Western spirits knowledge of interest, April 2017
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- Figure 44: Perception of Western spirits knowledge, cross penetration on different types of Western spirits (drinkers), April 2017
- Men and women have different learning preference about Western spirits
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- Figure 45: Western spirits knowledge of interest, by age and gender, April 2017
Interest in Different Types of Marketing Activities
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- Visiting the Western spirit factory/winery abroad most desired
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- Figure 46: Interest in different types of marketing activities, April 2017
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- Figure 47: Interest in different types of marketing activities, by gender, age, monthly household income, and family structure, April 2017
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- Figure 48: Interest in different types of marketing activities, by gender, age, monthly personal income, and marital status, April 2017
Meet the Mintropolitans
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- Mintropolitans have higher penetration across all Western spirit types
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- Figure 49: Penetration on different alcoholic drinks, by Mintropolitans vs non-Mintropolitans, April 2017
- Not necessarily more heavy users among Mintropolitans
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- Figure 50: Drinking frequency on different alcoholic drinks, by Mintropolitans vs non-Mintropolitans, April 2017
- Mintropolitans consume more in various occasions
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- Figure 51: Consumption occasions in the last 12 months, by Mintropolitans vs non-Mintropolitans, April 2017
Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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