(Yicai) Sept. 14 -- Kweichow Moutai, the world’s most valuable distiller, has teamed up with Mars-owned Dove to launch baijiu-filled chocolate liquors this weekend in the hope of winning over more young Chinese consumers.
The boozey chocolates will be sold at Kweichow Moutai’s ice cream outlets and through Dove’s sales channels, a person familiar with the matter told Yicai. A gift box costs between CNY35 and CNY179 (USD5 and USD24) on the firm’s ice cream app, though orders are not yet being taken.
The co-branded product is the latest from the CNY2.29 trillion (USD314 billion) company, which is experimenting with ways to boost its relevance to younger consumers. Less than two weeks ago, it released a hit baijiu-infused latte with China’s Luckin Coffee and over 5.4 million cups worth CNY100 million (USD13.7 million) sold on the very first day.
Baijiu is a traditional Chinese fiery liquor made from sorghum and grains such as wheat, barley, or rice. The best baijiu can command astronomical prices.
The tie-up with Mars, which ranked as the world’s top confectioner last year, is aimed at people who buy gifts for the holidays, said Zhu Danpeng, a food industry analyst. Chocolates tend to be bought as presents and not so much as part of the regular food shop, as people are paying more regard to their weight and nutrition.
An eight-day Golden Week break that combines China’s Mid-Autumn Festival and National Day holiday will start at the end of this month.
The chocolates are also part of Kweichow Moutai’s go-global strategy, Zhu said. Even if they do not sell well, Dove is a well-known brand worldwide and the partnership will help Kweichow Moutai promote its baijiu on the international market, he added.
Liquor makers are keen to seek more co-branding as they are worried about losing young consumers, analysts said. Habits are changing and baijiu is no longer the staple alcohol among younger generations.
Only 11.2 percent of young people prefer drinks with an alcohol content of more than 30 percent, according to a report by Ries Positioning Pioneers. Baijiu only accounts for 13 percent of the group’s preferred tipple, behind wine, cider, whiskey and beer.
As an industry leader, Kweichow Moutai is keen to stay relevant and has been trying to build a more stylish and youthful image in recent years. In May last year, it launched Moutai ice cream with dairy firm Mengniu Dairy and sold nearly 10 million cups of the ice cream in the first 12 months.
But Kweichow Moutai must not overdo it with co-brand products because there is a risk that they will hurt the value of its own brand if they are overdeveloped or inappropriately developed, said Cai Xuefei, an alcoholic beverage industry analyst.
In the first half of this year, Kweichow Moutai’s net profit jumped nearly 21 percent to CNY36 billion (USD5 billion) from a year ago thanks to rising sales through direct channels. Revenue also jumped 21 percent to CNY69.6 billion. Both figures beat expectations.
Editor: Kim Taylor