Is it about baijiu taming young people with picky tastes, or making baijiu for young people to drink? How hard is it to make young people fall in love with baijiu? The market already has a negative example: Recently, Luzhou Laojiao dissolved two of its baijiu companies targeting young consumers: Chengdu Tianfu Panda Baidiao Liquor Industry Co., Ltd. and Baidiao Tongdao Dashu Constellation Liquor Sales Co., Ltd. Although Luzhou Laojiao stated that the dissolution was due to business development, it has only been two years since the two companies were established. At the same time, Chinese baijiu is giving young people a "lesson" in the capital market. On February 9, the day before Chinese New Year's Eve, Moutai's market value climbed to 3 trillion yuan. The "drinking" market trend that lasted for a year reached its climax at the end of the year. In this hot atmosphere, young people also participated through stocks, funds, and other means. Zhang Kun, the fund manager of E Fund who heavily holds high-end baijiu stocks, even has his own fan group. In the battle for young people's alcohol consumption, baijiu brands are determined to take a slice of the cake. However, the products are expensive, spicy, high in alcohol content, and the brand image is outdated... Is baijiu supposed to tame young people with picky tastes, or make baijiu for young people to drink? These are two completely different approaches. This article attempts to answer three questions behind this: Do young people actually drink baijiu? What kind of business is selling baijiu to young people? Why don't young people buy old-brand baijiu? **-01-**Real demand, fake supply Do young people drink baijiu? Naturally, they drink alcohol, but their needs are vastly different from their parents' generation. The anime "Wakako Zake" (rated 8.6 on Douban) tells the story of a worker's sweetness and bitterness hidden in alcohol: day after day, the heroine repeats dull and heavy work at her unit, and her happiness comes from the short time after work. The single woman likes to linger on streets lined with small bars. Every day, she chooses different dishes. Paired with a small glass of wine, she drinks it happily, and even lets out a comfortable "psssh" sound. It's like a SPA for the heavy urban life. Whether at parties or drinking alone, drinking a little to release stress without adding burden is a major demand for young people in high-pressure environments. Why not choose cheaper ordinary drinks? Not only because alcohol can create a pleasant tipsy feeling, but more importantly, at this time, alcohol, like the rise of milk tea and blind boxes, belongs to "self-pleasing consumption." Economics believes that people are often willing to spend a little more money to buy non-essential items that bring a better experience. When young people buy alcohol, if the taste is not much different, brands that look aesthetically pleasing and tell stories tend to win—the drink accompanies young people through happy, boring, sad, and tired moments. Even if they are slightly more expensive, emotional connection is more valued by this group than the satisfaction of appetite. The premise is that these drinks are affordable. Obviously, the price of traditional baijiu has made young people fearful, and it can no longer penetrate into the level of accompanying meals and companionship. However, the wallets of post-90s and post-95s young people are growing considerably. According to CBNData data, in terms of consumer numbers and per capita consumption levels, post-90s and post-95s consumers are showing growth trends, and young consumers are gradually becoming the main force in the alcohol market. From a category perspective, baijiu, wine, and foreign spirits are the top three categories in young people's online alcohol consumption, with baijiu having the highest growth rate. However, young people buy baijiu but don't really like drinking it. Data from the same report shows that baijiu's position in young people's consumption preferences is far less than fruit wine, foreign spirits, and other categories. They mostly buy baijiu for social engagements. The traditional consumption scenarios for high-end baijiu are business banquets and gift-giving. CBNData data shows that baijiu is more often tied to "festive" social occasions, so it's not hard to understand why none of the above baijiu products are for young people. Following trends, daring to express, valuing individuality, and loving to share are the main characteristics of this group—In social settings, young people drink baijiu to follow the rules of the "drinking table" game. In private, from price to taste to culture, baijiu lacks the genes to compete with foreign spirits and fruit wine in the young consumer market. A post-90s baijiu enthusiast is not optimistic about the rejuvenation of baijiu brands. He told the reporter, The biggest problem with baijiu is that it doesn't match the social attributes and pace of contemporary young life. The order culture represented by traditional baijiu, along with drinking habits like toasting and forcing drinks, creates resistance and makes it difficult to break the ice with young people. However, liquor companies cannot sit back and watch the incremental space for baijiu consumption hit its ceiling. Guotai Junan research report points out that from a demographic perspective, on the one hand, the incremental space for the main baijiu consumer group is limited. According to its estimates, the number of people aged 30-60 will peak in 2023 at 697 million, then decline. On the other hand, per capita consumption has already reached a high point. According to data from the National Bureau of Statistics and the Prospective Industry Research Institute, since 2015, China's baijiu sales have shown a downward trend. In 2016, it was the peak of the past five years, reaching 13.057 million kiloliters; in 2018, sales were 8.547 million kiloliters, a year-on-year decrease of 26.43%; in 2019, baijiu sales were 7.5553 million kiloliters, a year-on-year decrease of 11.6%. Currently, Chinese baijiu, with its main consumer group aged 30-60 and core consumers being males aged 35-45, is at its glorious moment. But on the other hand, the first batch of post-90s are now "thirty and standing," and post-95s are on their way to thirty. This new generation of young people will gradually become the backbone of consumption in the next five to ten years. Smart brands think clearly: it's about sparing no effort to tap into the consumption value of this group, not really expecting young people to fall in love with high-proof baijiu. **-02-**If the proof isn't enough, make up a story A smooth 100ML cheap bottle with sharp copy on the paper packaging is highly recognizable. The product mainly features light-flavor sorghum liquor, with proof mostly around 20-40 degrees... This is Jiang Xiaobai's product. This Chongqing liquor company promotes "differentiated taste and fashionable marketing," targeting young people aged 20-35 as its main customer base. Currently, there are two main approaches to selling baijiu to young people. One is to innovate and transform the product; the other is to create scenarios for young people to drink baijiu through brand marketing and channel expansion. Jiang Xiaobai combines both approaches: the product focuses on low-proof liquor, and the packaging, copy, and advertising all cater to young tastes and new channels that young people like: internet-famous restaurants, bars, nightclubs, etc. Therefore, in previous media reports, its success was often seen as the success of an internet-famous brand. However, compared to the "high-end" of similar baijiu brands, "Jiang Xiaobai" is hard to find in high-end venues. Its logo most often appears on retail shelves in convenience stores, or on "Welcome" signs and tissue boxes in roadside eateries. Looking at its development, Jiang Xiaobai was founded in 2012, but growth was slow until 2016. After the central government implemented the "Eight Regulations," the gift market for high-end baijiu suffered a significant setback, opening up the mid-to-low-end baijiu market. It was in 2016, when the industry began to decline, that Jiang Xiaobai entered a period of rapid growth, with revenue reaching nearly 3 billion yuan by 2019. However, even in the mid-to-low-end market, baijiu brands are already saturated, and the market size for low-proof baijiu is not large. Jiang Xiaobai told the author that understanding young consumers and meeting their needs with products is its survival method. From the beginning, Jiang Xiaobai downplayed the identity attribute of baijiu. Traditional baijiu sales start from the origin of production: Guizhou Moutai, Sichuan Langjiu, Shanxi Fenjiu... Jiang Xiaobai broke this sales logic, not positioning itself as "Chongqing Jiang Xiaobai," but rather as "young people's Jiang Xiaobai." In product positioning and marketing, Jiang Xiaobai tries to find new stories for baijiu—all flavors, packaging, copy, and interactive channels that cater to consumer emotions... What ultimately prompts young people to buy is not baijiu itself, but the emotional resonance that baijiu conveys in a specific scenario. Jiang Xiaobai also segments the scenarios for young people drinking baijiu, launching a series of products: visiting relatives and friends wine, corporate team-building wine, hot-blooded large bottle wine... Taking corporate team-building wine as an example, a single bottle weighs four jin but is only 25-proof light-flavor sorghum liquor, suitable for segmented scenarios such as company team building, reading sessions, annual meetings, and department dinners. Like all internet-famous brands, the consumption value of the product itself is downplayed. During the author's interviews, "bad taste" became a high-frequency word in feedback from connoisseurs. Some respondents said, "Wine is wine, it's all spicy. To me, there's not much difference; I don't think Jiang Xiaobai is better." Others said, "Jiang Xiaobai doesn't taste good; it has no flavor." Whether it's easier for young people to accept or it's a lose-lose situation, the taste debate is subjective and hard to conclude. But Jiang Xiaobai's main product, Xiaoqu light-flavor sorghum liquor, has a cleaner flavor profile compared to Daqu, allowing it to launch fruit-flavored baijiu like Guolifang that suits young people. In this regard, whether it's sauce-flavored Moutai or strong-flavored Wuliangye and Luzhou Laojiao, their unique flavors make it difficult to achieve this. However, seasoned players who value taste are not the affordable consumer group Jiang Xiaobai pursues. For young entry-level consumers, drinking Jiang Xiaobai is often an immediate need in emotional and party scenarios, where the drink serves as a cathartic carrier and booster. **-03-**More players No matter how Jiang Xiaobai emphasizes "seeing the big from the small," its light-flavor Xiaoqu track only accounts for 15% of the Chinese baijiu market, with limited development space. Young consumers' acceptance of other types of baijiu remains low. The traditional baijiu market is highly mature, with a stable landscape of leading players. According to Suning.com consumption big data, Moutai, Wuliangye, Yanghe, Fenjiu, and Luzhou Laojiao are the TOP 5 brands driving Suning's rapid baijiu growth. In terms of single products, 53-degree Feitian Moutai, Eighth Generation Wuliangye, Jiannanchun Shuijingjian, Yanghe Dream Blue M1, and Fenjiu Qinghua 20 topped the single-product list. In addition, although the overall income of the baijiu industry is dispersed, industry profits are relatively concentrated in high-end distilleries. Ping An Securities report shows that in 2019, the total profits of the TOP 5 listed baijiu companies accounted for about 72.4% of the industry, with Moutai and Wuliangye alone accounting for 59% of the industry's total profits. In a talk show, host Hua Shao mentioned that as men reach a certain age, their love for Moutai increases year by year. Ji Keliang, the former chairman of Moutai in his eighties, responded, "So they say young people don't drink Moutai; it's not time yet. In their twenties, they're still playing; they're kids who don't understand and don't know how to choose good wine." However, winning over young people is still an indispensable move. Small bottles with small capacity and affordable prices are the main product form for major liquor companies to enter the low-end market below 100 yuan. Unlike the traditional 500 ml regular packaging, small bottles mostly have a capacity of 100 to 125 ml. After Jiang Xiaobai appeared in 2012, the small-bottle model increasingly became one of the classic routes for major liquor companies to "rejuvenate." For example, Wuliangye launched Huopao small wine and Waizui small wine, Yanghe launched Yangxiaoer and Xiaoheiping, and Luzhou Laojiao launched Luxiaoer. According to China Merchants Securities' 2018 estimate, the small-wine market size will be around 30 billion yuan in the next five years. Image source: China Merchants Securities research report In terms of co-branding and sponsorship, traditional baijiu brands have also made many attempts. Luzhou Laojiao co-branded with "Three Lives Three Worlds, Ten Miles of Peach Blossoms" to launch a customized wine "Tao Hua Zui," co-branded with Tongdao Dashu to launch constellation wine, launched "Duanpian'er" ice cream with Zhong Xue Gao, and launched milk tea "Zui Bu Shang Dao" with Cha Bai Dao. But none of the above measures have captured the minds of young people. For now, well-known old baijiu companies are still a "chicken rib" for young people—tasteless to eat, but a pity to discard. Qian Ruisun, host of "Bei Gong She Yin," told the author that high-quality liquor has a long production cycle, and it's hard to fully understand it with the logic of evaluating new products in FMCG. Changing a generation's drinking habits is not easy. However, investor-led projects always demand blockbusters, scale, and quick returns, which has led to many nondescript so-called young baijiu products on the market. "We need to be more patient with the liquor industry." Chinese baijiu will eventually face fresh blood, and more players are entering the game. In 2020, the new baijiu brand Guangliang Liquor completed Series A and B financing of several hundred million yuan, with Series A led by Hillhouse Capital, followed by XVC and Yeger Capital; Series B was co-led by Hillhouse Capital and BAI Capital, with XVC over-subscribing. But while baijiu companies expand their categories, new consumption trends may not be led by baijiu. According to IT Juzi data, since 2016, more than 16 low-proof alcohol brands have received investment. According to CBNData big data, in 2020, among online alcohol consumption, post-95s showed the fastest growth in fruit wine/cooking wine/liqueur consumption. Even if it becomes low-proof, baijiu faces the problem of an aging category image. In the eyes of young people, baijiu is something middle-aged men of their father's generation drink; it's not cool. Converting these groups into potential consumers is the operation that fits market intuition. In the end, trends change rapidly. Just as Moutai previously tied itself to "national liquor" to create a high-end image, the key to building a brand and promoting consumption lies in forming a broad consensus. Once formed, consensus becomes a usable "fact." For baijiu brands, how to cultivate the consensus that baijiu is "cool" among young people is the urgent task. Source: Half-Ripe Finance (id: Banshu-Caijing) Author: More than Eleven People Tips will be paid 400-2000 yuan once adopted.