Diageo poised for baijiu opportunities

23 August, 2012

CEO of Diageo, Paul Walsh, has outlined the potential of the global baiijiu market and has stated that the company is ready for further acquisition in the category.   

Responding to a question from Drinks International about Diageo’s baijiu strategy, during the group’s financial results press conference, Walsh said that the category had "premiumised" in recent years and that he saw a “huge opportunity to capitalise on the growth of the category”.

He said: “We identified Shui Jing Fang and we have an acquisition vehicle for other baiiju opportunities as they come along. We have a brand leader – we are learning from the business but also the business is learning from us.

"Baijiu is the largest spirits category in China and has a large and growing presence in other Asian markets. Indeed, wherever you have Chinese diasporas you see authentic baijiu brands on the market."

The group has a controlling interest in Shui Jing Fang (reportedly 53%) and has started to roll the brand out to Europe, starting with the UK last month, after seeing global sales increase, especially in travel retail. 

“The liquid may not always be familiar to western palates so there may be some challenges to overcome there, but it’s a large category and it's premiumising. In duty-free in Asia it has become the number one selling SKU.”

According to Euromonitor International, the baijiu category amounted to 456m 9-litre cases in 2011; the largest spirits category globally. 

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