How has the distribution of international spirits brands changed?
The importation and distribution of craft spirits brands into China has followed the same track that we have seen in most emerging cocktail markets. That is to say that they were originally brought in by smaller companies charging a higher price for smaller volumes of independent products. As a result, the market became saturated by lower price and lower quality big-brand alternatives. Major brand house-pour contracts brought with them house pour deals that coerced bars into plastering brand logos and POSM all over their venues, ushering in an era of low-quality cocktails with little real differentiation between bars.
Now that Chinese consumers and bars are becoming more savvy, they are demanding higher quality independent spirit alternatives but will not make this trade if it means paying an unfair premium in cost. As a result, we do see a growing group of spirits distributors that are bringing in the products that China wants for prices that it can accept. At the same time, though, there is a budding rise in China of locally produced craft spirits such as the delicious Peddler's Gin. We will have to wait and see how these three spirits brand categories, and the Chinese market, adjust to accommodate one another.
Is there further scope for bigger distribution deals in China?
In China, perhaps more than anywhere else in the world, there is always a bigger fish. Even with all the business that all international spirits importers are doing in China, we collectively don't amount for even 3% of China's overall spirits consumption. The future is going to be a wild ride.
Do you have any predictions for the future of either industry in China?
China will continue to develop in all directions at once, leading to new forms of cocktail experiences that we can't yet imagine or understand. Already, China is ahead of the rest of the world in many segments in the cocktail market, especially in spaces where cocktails interface with the consumer market.
RTD cocktail delivery kits with vacuum-sealed garnish packs and perfect ice, ordered from your phone and sent to your apartment in 40 minutes or less? That's already here. Order your favorite Spritz from Starbucks via phone app to pick up on your way to the park? Already happening. Scan a code on your bar table and navigate a fully photographed menu with Amazon.com-style upsell suggestions and cocktail user reviews, and then split the bill with your friends and pay with your thumb print? Done and dusted. Robot kiosks in the shopping mall that mix and shake cocktails for you that you order on an app so that you can sip while you shop? Also happening in China already.
