(Yicai) May 31 -- The Chinese baijiu industry has more than doubled its research and development investment in the past five years.

Chinese listed baijiu makers spent CNY1.6 billion (USD219.5 million) in R&D last year, compared with CNY630 million (USD87 million) in 2019, Yicai calculated from public data.

The baijiu industry is in a stage of destocking, with intensified competition, so technology and innovation are the core driving forces for its development, said Song Shuyu, chairman of the China Alcoholic Drinks Association.

Liquor makers’ innovation in production, circulation, and branding will play an essential role in deciding the future development trend and competitive landscape of the baijiu industry, Qin Shuyao, secretary-general of the China National Association for Liquor and Spirits Circulation, said at a recent forum.

Baijiu makers’ R&D expenditures mainly include liquor microbial research, digitalization, and intelligent brewing. For example, Luzhou Laojiao’s Huangyi Liquor-Making Ecological Park cut energy consumption by 10 percent and hiked liquor yield by 10 percent with new technologies, such as artificial intelligence and industrial internet.

Other common R&D expenses for baijiu makers are finding ways to make their liquor more comfortable to drink and developing low-alcohol products targeting young customers. For example, Wuliangye Yibin, Luzhou Laojiao, and Yanghe Brewery launched new sparkling liquor or low-alcohol products.

The trend is also visible from the financial results of the first quarter of this year. The R&D expenses of leading baijiu makers Wuliangye, Luzhou Laojiao, and Xinghuacun Fenjiu Group soared 10 percent, 19 percent, and 31 percent, respectively, in the three months ended March 31 from a year earlier.

Editor: Futura Costaglione