As head bartender at General Lee’s in Los Angeles, Philip Ly had baijiu on the menu for years. But it wasn’t until reopening after pandemic lockdowns that drinkers were interested in China’s historic spirit. Now, he moves twice the volume.
“I feel like a lot of consumers did reading and research on different spirits, and now the popularity of baijiu has gone up since the pandemic,” he said.
Although Ly admittedly didn’t sell much before, he’s gone from moving one case a month to one per week. While the curiosity around baijiu resembles other categories that are benefitting from growing consumer interest in premium spirits and global flavors, baijiu’s reputation as the world’s most consumed spirit might be slowly getting it a little more attention.
Baijiu producers claimed the top five spots on the world’s most valuable spirit brands list in 2021, together totaling $89 billion in 2020 and 85.7% of the combined brand value for the entire list. But baijiu is still a novelty in the U.S. — and that comes down to lack of accessibility and availability, according to Derek Sandhaus, the author of two books on the spirit and co-founder of Ming River Baijiu.
“On the one hand, you have a category of drinks that’s very large and important in the global world of spirits in terms of how much of a percentage it makes up,” he said. “But 99% of baijiu is consumed in China.”
While baijiu is one of the world’s oldest spirits, the modern baijiu industry didn’t emerge in China until the late 1950s and 1960s, a period when the U.S. had no diplomatic or trade relations with China. That prevented imports until the 1980s, and it’s only in the last decade that channels outside of specialty Asian markets or retailers catering to the Chinese diaspora have begun to carry the spirit. That lack of access has made it an unfamiliar spirit for people who haven’t visited China or don’t have Chinese lineage. Plus, it’s a complex category. Baijiu translates to white liquor, and is an entire class of spirits distilled from rice, millet, sorghum and other grains, while varying in style from region to region.
“Baijiu is a very complicated and large category of spirits. Different styles of baijiu can be wildly dissimilar to one another,” Sandhaus said.
Baijiu is also traditionally consumed in shots alongside food, an unusual way to drink a spirit that averages around 50-60% alcohol by volume in the U.S.
But in China, producers have begun attempting to shed the spirit’s reputation as grandfather’s drink of choice to appeal to a younger Chinese audience. Distilleries are making lower proof products, flavored versions and borrowing marketing strategies from categories like Soju, that have made successful crossovers with younger audiences. At the same time, bartenders in China and other parts of the world are starting to use baijiu in cocktails— giving the spirit more of an international cachet that could resonate with a social media-attuned Gen Z. In the U.S., baijiu is slowly making an appearance on cocktail menus.
“It’s a very, very fun spirit to play with. One, because not a lot of people are used to its flavors, but two, it’s so flexible it can blend in so many different flavor notes if you just pair it with certain other modifiers or ingredients,” said Ly.
At the bar, Baijiu serves as a flexible base that also provides an avenue to engage spirit-curious customers, especially those who are looking for a weeknight educational chat with the bartender. On weekends, when the bar caters to younger crowds of up to 700 customers a night, Ly splits baijiu as a base spirit with something like mezcal as the flavor can be overwhelming for the general public, he said.
For Ming River, getting feedback from a team of bartenders in New York before bringing the product to market was essential to narrowing down the precise blend. Like the growth of mezcal was largely stewerded by agave-fanatic bartenders, much of the brand’s success has been built by on-the-ground education, said Sandhaus.
“I’ll say that the first three years was a very uphill battle, I don’t know if I would say it’s level, but it’s much closer to level than it used to be,” he said. “A lot of people are curious about it and there’s also a sense that this is going to be a bigger category in the future, and people want to be ahead of the curve.”
The brand, which launched in 2018, is the result of a partnership with the oldest continuing distillery in China, Luzhou Laojiao, which was looking to create a product that could help popularize baijiu outside of the country. Sandhaus’s other partners started the first baijiu focused cocktail bar in Beijing, Capital Spirits. In 2020 Sazerac brought Ming River into its portfolio, and is overseeing the national sales strategy in 25 U.S. states. It’s also sold in several European and Asian countries as well.
For Vinn Distillery, the producer of another leading baijiu in the U.S., growth has meant that baijiu now outsells the distillery’s other spirits which were originally produced to carry the company along after it made the family’s backyard baijiu distillery legitimate. Owner Michelle Ly’s family is the only U.S. producer, and said despite the uptick in sales the category still has a while to go. Vinn’s baijiu is sold in its home state of Oregon, and a few other states.
“I think it will still remain pretty small in the western market,” she said.
Several categories of East Asian origin like baijiu, sake, and soju are falling among the fastest growing categories on e-commerce alcohol retailer Drizly, according to BevAlc Insights. While it remains a small percent of overall share, baijiu is the fastest-growing subcategory from East Asia on the platform. In 2019 the two leading brands in the U.S., Ming River and Vinn, made up most volumes for the category, but it’s expected more brands will come to market, leading to a forecast of 5.2% CAGR through 2024, according to the alcohol data company IWSR.
CNS Wine & Spirits, an importer and distributor of East Asian spirits since 1982, brings in a range of ultra premium to more accessible baijius, and is adding more to their portfolio. Sales have been down overall for the company during the pandemic, but Yuan Li, senior vice president of business development, has noticed an uptick in inquiries for baijiu and other East Asian spirits.
“Which tells me that there is a general interest in the category,” he said.
While their baijiu sales channels are predominantly in Asian and Chinese communities, the company has made inroads in what Li refers to as the general market — products are sold in Total Wine & More and they are in conversations with BevMo. The demand from the Chinese community in the U.S. has always been present, and Li expects retailers are now angling to access those customers.
“On an economic level, baijiu being the largest-selling spirit category in the world really called the attention of some of these major retail chains,” he said. “As they start to incorporate it into their offerings to their clients it makes the category a lot more accessible to general consumers.”