Click 'Read Original' for details. In recent years, a large number of excellent innovative consumer brands have emerged in China, and the soil behind them is generational consumption. The current mainstream consumer group has shifted from the post-70s and post-80s to the post-90s and post-00s. With the upgrading of consumption and the emergence of the mobile internet, the consumption habits and preferences of these mainstream consumer groups have become vastly different from those of the previous generation. The demand side is changing rapidly, while the supply side is like an 'aging' old man, who, although making moves, often fails to grasp the pain points of consumers. The mismatch between supply and demand has given startups new opportunities. The liquor industry is the most traditional industry in China. In recent years, driven and guided by Jiang Xiaobai, the trend of 'new alcoholic drinks' has sprung up like bamboo shoots after rain. Besides young white liquor and craft beer, whiskey, as an imported product, is being seen as a new track in the liquor industry. VETO was established in May 2018, positioning itself as 'the first glass of whiskey for young people'. Within a year of its establishment, it had already secured millions in seed funding from Hongzhang Capital, and tens of millions in angel funding from Sansheng Venture Capital (MissFresh Ecosystem Fund) and Hexian Capital. Recently, New Distribution interviewed Mr. Gu Lei, founder of VETO. With nearly 10 years of experience in beer offline distribution and formerly the largest Tsingtao Beer distributor in southwest China, why did he choose the whiskey track? Reviewing the growth paths of past innovative consumer brands, they all start online and then move offline, but VETO is doing the opposite, following traditional distribution logic and deeply cultivating local markets. What were his considerations? Choosing the Whiskey Track: The Biggest Opportunity in the Liquor Industry in the Next Decade Gu Lei recalled his decision to enter the whiskey industry. He wanted to create a completely new category of liquor, rather than making differentiated liquor in the existing market. Young people's consumption habits favor trying new things; 'better to be different than to be better'. Everyone has observed that more and more young people don't like drinking white liquor. Many white liquor companies are racking their brains to attract young people: 'Since young people don't like traditional white liquor, let's make a new type of white liquor with a young identity.' The emergence of Jiang Xiaobai is a typical benchmark, but from a demand perspective, Gu Lei believes this is not extreme enough. Making young white liquor still doesn't break out of the white liquor category. Consumers still perceive the product as white liquor, and the evaluation system still cannot escape the white liquor system, making it difficult for new brands to occupy consumers' minds. But China is a country with a long tradition of drinking spirits with meals, with an average per capita alcohol consumption of 4.34 liters, and alcohol has important social attributes in culture. Young people's demand for high-proof alcohol and social products will not change dramatically in the short term. Young people need spirits, but not necessarily white liquor; or rather, they can have more choices! What is the new category? Gu Lei observed the development of new alcoholic beverages in Japan and Taiwan and ultimately locked onto the whiskey category. Since whiskey entered Japan in the late 19th century, it took only a few decades for Japan to become the world's fifth-largest whiskey consumer. Gu Lei believes that after 40 years of reform and opening up and rapid economic development, whiskey carries the labels of 'fashion' and 'individuality', and fits the international lifestyle of young people. Referring to the high-speed growth of the coffee market, addictive whiskey is expected to rise. Gu Lei told New Distribution that the reason whiskey hasn't developed rapidly in the past is mainly that there are too few scenarios where consumers can drink whiskey, and it hasn't entered the mainstream consumption scenario: the dining channel. In the past two decades, the main consumption scenario for whiskey in China has been nightlife venues, with an extremely low share in the dining channel. When consumers discover that they can also drink whiskey during meals, they might try it. So VETO chose to break through from the dining channel, launching high cost-performance products to lower the threshold. In addition, the product's taste is also suitable for drinking with meals. VETO is blended according to the taste preferences of Chinese zero-based consumers, with a focus on floral and fruity aromas, and a sweeter, smoother entry. Deep Thinking Based on the New Category: Entering from Offline Scenarios Most innovative brands' battleground is online, completing the marketing and sales loop online, but VETO has chosen a completely different path. According to Gu Lei, in terms of brand marketing and promotion, the only online channel is Xiaomi Youpin. Choosing to launch on Xiaomi Youpin can achieve a multiplier effect for both brands. However, VETO currently has no plans to open flagship stores on Tmall or JD.com. Gu Lei explained that this approach is related to the characteristics of the category. The online penetration rate of Chinese liquor products is less than 10%, and offline is the core battlefield for liquor products. Compared to high-profile online campaigns, offline interaction and sales are more direct. Referring to Jiang Xiaobai's growth trajectory, although it was initially known for Weibo content marketing, the real key to its success was its offline sales team, which achieved its status as the first 'new white liquor' brand through deep distribution. In addition, online is suitable for categories with well-established awareness, where online marketing can convey differentiated appeals, communicate with consumers, and promote orders. In contrast to well-established categories, Chinese consumers have a shallow understanding of the whiskey category and are somewhat unfamiliar with drinking whiskey in dining scenarios. Consumers need on-site experiences to attract them to try new things, gradually form awareness, and then make purchases. Considering that the offline dining channel will be the main battlefield for future growth, VETO does not currently prioritize online sales. Steady Offline Channel Development: Replicate in Batches After Model Validation VETO's main sales channels are dining establishments that gather young consumer groups, have high foot traffic, and have medium-to-high average order values. Gu Lei told New Distribution that VETO's offline channels are currently primarily self-operated, using a point-to-area approach with refined operations. The terminal's business development, operations, and sales promotion are all handled by the team itself, with distributors assisting in delivery. In terms of cost investment, the company controls terminal sales expenses and invests the main funds into consumer interaction. Terminals provide scenarios and traffic, but as a new differentiated choice, whiskey needs sufficient terminal exposure to remind consumers that there is a new option in dining scenarios, thereby achieving consumer self-purchase. During the purchase process, through consumer interaction, tasting, and sampling, consumers can understand whiskey culture and identify with the VETO brand. 1. Model Validation: On-site Tasting Ambassadors VETO treats each restaurant as a base for consumer operations, stationing a tasting ambassador in each restaurant to recommend and mix sample products for customers, while also spreading whiskey culture and brand promotion. It is understood that currently, one on-site tasting ambassador per store averages contact with 150 customers per day, with one ambassador covering one restaurant. With hundreds of restaurants, they can interact with 4.5 million targeted consumers monthly, and directly convert consumption offline. Since launching offline promotional activities in March, within 2 months, VETO has completed preliminary model validation. The terminal tasting participation rate is 70-85%, and the purchase rate is 25%. For the human investment in on-site tasting ambassadors, the input-output ratio has been validated as positive. 2. Batch Replication: Dense Coverage in a Single City The offline terminal expansion model has been basically validated, and the next step is to enter the rapid replication phase. As of now, VETO has entered around hundreds of dining terminals in Chengdu. Gu Lei told New Distribution that considering the cycle and cost of whiskey market cultivation, future expansion will also primarily rely on self-operated channels, while also cooperating with local distributors, but in important regions, they will build their own BD, operations, and sales promotion teams. Offline, they don't seek speed but steady progress. Extending Upstream in the Industry Chain and Polishing the Supply Chain In addition to steadily building channels, the focus should also be on supply chain refinement. According to Gu Lei, there is currently a lack of high-end whiskey blenders in China, and there are no whiskey factories yet. The team will further optimize products, introducing Scottish whiskey-making experts to continuously launch whiskeys that better suit Chinese tastes. In addition, VETO will also participate in the integration of supplier resources. Although VETO is currently all imported from Scotland in original bottles, in the near future, they will consider starting their own distillery. Only by establishing a whiskey distillery, achieving taste localization, and significantly reducing production and transportation costs can the industry truly be expanded!