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Alcohol

Brand value grows,
but growth rate slows
 
Alcohol is the most represented category in the BrandZÔ Top 100 Most Valuable Chinese Brands 2017, with 11 baijiu, beer, and wine brands. The category increased 24 percent in value, compared with 30 percent a year ago, making alcohol the fourth fastest-growing category among the 20 categories measured in the ranking.
 
The increase indicates sustained but slower growth compared with a year ago, when the alcohol category rebounded from the pressure on sales and profits caused by weaker economic expansion and government measures to limit extravagance at official events, which reduced demand for alcohol, especially premium brands.
 
Still, five alcohol brands are among the BrandZÔ Top Risers, the brands with the greatest year-on-year value appreciation. Moutai, an esteemed brand of baijiu, the traditional Chinese white alcohol, increased 41 percent in value, which propelled it up several slots in the ranking and into the Top 10.
 
The other four alcohol brands in the Top Risers are Harbin Beer and three baiju brands: Gujing Gong Jiu, Luzhou Laojiao a premium brand established in 1573, and Wu Liang Ye. These other alcohol brands also are included in the BrandZÔ China Top 100: Yanghe, a baijiu, ChangYu, China’s oldest wine producer, along with these beer brands – Tsingtao Beer, Snow Beer, Yangjing Beer, and Pearl River.
 
The baijiu brands increased in value because they expanded distribution and adjusted prices to reach a broader market. Some also expanded overseas marketing. Moutai launched a European sales initiative with an event in Hamburg, Germany, and it continued efforts to develop a market for baijiu in the US, focusing especially in San Francisco and New York.
 
Of the beer brands, Harbin appreciated in part because of its success appealing to millennials with a combination of tactics, including event sponsorships and celebrity endorsements. The Rio Summer Olympics helped drive beer sales, but the slower economy hurt the middle of the market.
 
Affluent consumers sought imports and premium brands, and niche offerings, such as dark beers emerged, as brewers also offered flavor variations to attract millennials. Beer imports rose 18.7 percent during the first 11 months of 2016, according to the China Association for Imports and Export of Wines and Spirits.
 
The association also reported an 18.3 percent increase in imported bottled wine through the first 11 months of 2016. Meanwhile, ChangYu developed wines suitable for export, and affordable wines that catered to the increasingly sophisticated Chinese palate. Millennials influenced consumption trends, and more wine purchasing took place online.