The International Spirits Market In China

This report is the first consumer based study offered by just-drinks.

just-drinks has conducted extensive consumer and trade research and learned who the Chinese consumer is, explaining their drinking behaviour and introducing the challenges that international spirits face in the market. The international spirits category refers to whisky, Cognac, vodka and other spirits which are imported into the country.

Consumer interviews have been conducted across six key cities in China, among male drinkers aged between 21 and 35 years old that had consumed any alcohol in the last month. In addition to the consumption criteria, respondents were also drawn from the top 30% personal income bracket for each city. This ensured that the study focused on the socio-economic group which has a high enough level of disposable income to participate in the international spirits category.

In Chapter 1, we introduce our forecast model. The following chapters of this report will look more deeply into the different components of our model: the core consumers of international spirits, the current drinking behaviour across channels, and the key players within each key international spirit category.

The findings of these chapters are used as inputs to the model that forecasts the growth and volumes of the key international spirits brands in China.

In the final section we give an overview of the whisky, cognac and vodka categories, and offer market projections until 2012.

Chapter 1: Forecasting the growth of the international spirits market in China. The international spirits category has experienced rapid growth in recent years. However, the category remains relatively small compared to other markets in Asia. The Chinese spirit market is dominated by domestic spirits, called Baijiu, the two leading international spirits groups; Diageo and Pernod-Ricard hold an estimated .1% and .2% market share respectively. In this chapter, we introduce our forecast model and highlight the growth of this category.

Chapter 2: Marketing challenges for international spirits in China. While there are clear opportunities for international spirit brands in the Chinese market, there are distinct marketing challenges that need to be overcome, as discussed in this chapter - low familiarity with international brands; homogenous promotional and communication strategies adopted by international brands; a highly competitive marketplace; low brand commitment - the target consumer is fickle and spoilt for choice; and a high level of counterfeiting and parallel imports in key channels.

Chapter 3: The 'target' Chinese consumer of international spirits. Who is the international spirit consumer? We will take a closer look at males aged 21-35 who are frequent visitors to modern accounts. In this chapter we will describe the motivating factors in their lives, their ambitions, the trends they follow and what they like to do during their free time. This research was conducted via telephone interviews in five key markets in China: Shanghai, Beijing, Guangzhou, Nanjing and Chengdu. Respondents were aged 21-35 years old. All were from the top 30% household income bands in each market. The total sample size was 2001.

Chapter 4: Introduction to drinking behaviour. This chapter will provide an overview of the key channels in which alcohol is consumed as well as providing an introduction to drinking behaviour and preferences at a category and brand level. It is divided into two main sections, and examines the key channels and categories along with the perceptions of these key categories.

Chapter 5: Whisky - an overview. This chapter will provide an overview of category dynamics, and profile key whisky brands in China. It looks at where, and how often whisky is consumed across markets, brand awareness, usage and image, plus, it provides profiles of key whisky brands.

Chapter 6: Cognac - an overview. In this chapter we provide an overview of category dynamics, and profile brands in the Cognac category in China. It will focus on Cognac consumption across markets, awareness and usage of key Cognac brands, and image perceptions.

Chapter 7: Vodka - an overview. This chapter offers an overview of the key category dynamics of the vodka category in China, and profiles the key brands. It looks at vodka consumption across the market, awareness and usage of key vodka brands and image perceptions.

Chapter 8: Projections for dark spirits brands to 2012. This chapter offers projections for the whisky and Cognac categories and their key brands in China until 2012.

Chapter 9: Projections for vodka to 2012. Vodka has experienced a rapid growth in usage in China over recent years and is expected to grow from 392,000 cases in 2006 to 3.8m cases by 2012. In this chapter, we will offer projections for the vodka category until 2012 by brand.

Chapter 10: Summary. This chapter includes on- and off-trade market for international spirits by category and total in China with forecasts to 2012.