Premium Scotch Distillers Eye Huge Potential, Existing Growth In Chinese, Emerging Markets
China’s love affair with the national sport of Scotland, golf, has also spread to the national drink of Scotland — scotch whisky. The Chinese market has become a prime market for Scottish distilleries in the last 10 years, as brands like Chivas Regal (introduced to the Chinese market in 2001) and other Speyside whiskeys like BenRiach and Glendronach (which have entered the market more recently) have attracted the devotion of everyone from scotch connoisseurs to well-heeled bar patrons in China. Chivas in particular has seen business booming as a result of its China expansion, where within a year of entering the country China had become the biggest global market for Chivas. For many scotch brands, which have seen their popularity in western countries steadily diminish in the last few decades as scotch has lost its allure among younger drinkers who increasingly favor vodka, China has great potential since it is a “blank slate” with fewer preconceptions about brands, flavor, region or pedigree.
One interesting characteristic of scotch consumption in China is the sizeable gulf that separates the devotee from the social drinker. In bars across China, it is common to see premium scotches like Chivas offered in a promotional “package” for a relatively high price, typically bundled with a bucket of ice and several bottles of sweetened iced green tea. While serious scotch drinkers would recoil in anguish at the sight of partygoers haphazardly mixing high-quality scotch with sugary tea, this home-grown concoction is one of the main drivers of Chivas Regal’s growth in the Chinese market, and the agreeable taste of the resulting cocktail suits the local market extremely well. Far from resisting the trend of Chivas becoming a “mixer” of sorts in China, the company has actively encouraged and nurtured its image as a sophisticated yet youthful party liquor, one that bestows a certain amount of status for the individual ordering the Chivas package for his or her table. In tacitly encouraging this localized brand image throughout the country, Chivas Regal has — in only 8 years — become the envy of other foreign liquor brands, and is no doubt the case study pored over most when foreign companies look to carve out a niche in China.