Scan the QR code in the image to register Trendy brands, trendy shoes, trendy toys—for this generation of young people, everything can be trendy. Even in the age-old alcoholic beverage market, there is a category that has become trendy, rising gradually with the support of young people. China has a long history of alcohol consumption. After the founding of New China, baijiu replaced huangjiu's long-standing status, becoming the mainstream of alcohol consumption, a position it has held for decades. Under the consumption choices of young people, new changes are emerging in the alcohol market, and the rapid growth of low-alcohol trendy drinks cannot be ignored. According to CBNData's "2020 Young People's Alcohol Consumption Insights," among the incremental alcohol consumption in 2020, the post-90s and post-95s were the two largest consumer groups. In the alcohol consumption of post-90s and post-95s, fruit wine and prepared wine categories grew at the second-fastest rate. Young consumers' drinking concepts are changing, and alcohol consumption scenarios are rapidly shifting from business entertainment to social enjoyment. Low-alcohol trendy drinks, represented by niche categories such as premixed cocktails, prepared wines, fruit wines, flower wines, rice wines, and soda wines, are expected to become the next big trend in the alcohol market. -01- Business Entertainment: "Can't Drink," Friends' Gatherings: More Variety More and more young people under leaders claim they "can't drink" due to "alcohol allergy," "taking cephalosporins," or "recent colds." Young people haven't stopped drinking; rather, the scenarios for drinking have changed. Alcohol consumption is closely related to consumption scenarios. For young people, consumption scenarios are typically social venues like nightclubs and KTVs, and are mostly for gatherings rather than business. In the old drinking culture, "not drinking means disrespect" was widespread, and the culture of urging others to drink flourished. As attitudes shift, drinking is more for enjoyment, and alcohol consumption focuses more on pleasing oneself rather than others. If drinking brings social pressure, they resolutely refuse; conversely, if it's a joyful activity, they actively consume. More autonomous and controllable drinking amounts and a relaxed, pleasant atmosphere have become the mainstream culture of young people's alcohol consumption. This is completely different from baijiu consumption scenarios. According to the "2019 Digital Development Insight Report on the Baijiu Industry," 42% of young people drink baijiu for business or to fit in with a group, 35% accompany elders, and 31% drink to liven up the atmosphere. Zhang Yu, an ordinary corporate employee in Beijing, spends about 800 yuan per month on alcohol, purchasing through immediate consumption channels like bars and restaurants, as well as online shopping for home drinking. When selecting alcoholic beverages, she doesn't pay special attention to differences between categories. When drinking at home, she usually uses spirits as a base to mix her own cocktails, as this "tastes better and has lower alcohol content, making it easier to drink." After surveying 30 random young consumers with monthly alcohol spending above 500 yuan, we found that young people focus more on "drinking happily" and "good taste," and care least about "the grade of the alcohol." Under this motivation, the cultural and brand added value of traditional baijiu has plummeted, while low-alcohol drinks that are easier to drink and richer in flavor are growing rapidly. Tmall's New Year's Shopping Festival data shows that orders for prepared wines and fruit wines increased nearly 120% year-on-year. According to Tmall's New Product Innovation Center's "2020 Fruit Wine Innovation Trend Report," as of November 2020, plum wine grew by 90%, and premixed cocktails and fruit wines grew by 50%. -02- Low-Alcohol Trendy Drinks: First Low Alcohol, Then Trendy The alcohol category has seen an innovation wave in recent years. The rich flavors and tastes of low-alcohol trendy drinks lower the barrier for consumers to drink and try. Among mainstream alcohol categories, baijiu's spiciness makes it harder for most people to accept. The acceptance of spirits is also limited by alcohol content. Wine and beer lack a more trendy, youthful category image. For many alcohol consumers, the taste and texture of low-alcohol trendy drinks are the biggest highlight for choosing them. They can freely consume alcohol while enjoying rich flavors similar to soft drinks, and after a slight buzz, they can freely stop at any time. Secondly, low-alcohol trendy drinks offer a wide variety of flavors and textures, including fruity, floral, plum wine, soda, and sparkling, satisfying young people's desire to try new things. The low alcohol content also allows consumers to experience more products in one drinking session, freely choosing according to preference. Additionally, low-alcohol trendy drinks are mostly young brands, with marketing and packaging closer to younger demographics. A more youthful, self-expressive brand image further lowers the barrier to first-time alcohol consumption. Light drinking can add to the atmosphere without getting "too drunk." In the consumption of low-alcohol trendy drinks, the influence of light alcohol consumers and female consumers cannot be ignored. According to CBNData data, among online alcohol consumers born in the 90s and 95s, women account for an average of about 50%. On Xiaohongshu, searching for "sweet little wine" yields many highly-liked recommendations for low-alcohol trendy drinks. Many posts mention phrases like "girls' party," "high appearance," and "good for photos." A lighter, more relaxed drinking experience and higher aesthetic appeal give low-alcohol trendy drinks a "refined" category image, naturally more suitable for photos and social sharing. Looking back at the history of low-alcohol trendy drinks in the Chinese market, the first to enter the public eye were likely Breezer and RIO, which have now faded in prominence. As early as 1997, Breezer entered the Chinese market. Unlike today's internet-famous sweet wines that focus on home drinking, Breezer at that time still focused on immediate consumption scenarios like bars and KTVs, relying on traditional channels. In 2012, Breezer placed product placements in the then-popular TV series "iPartment," successfully opening up the market. Unfortunately, as a category pioneer, Breezer failed to establish a firm foothold. Another well-known premixed cocktail brand, RIO, also rose rapidly. RIO targeted young people with its marketing, fitting home drinking or friend gathering scenarios, and placed ads in many popular variety shows and TV dramas at the time, becoming a temporary "internet-famous wine." Subsequently, brands like Wuliangye, Swellfun, and Huiyuan launched their own premixed cocktail brands. According to a research report by CICC, in 2013, RIO and Breezer held market shares of 20% and 30% respectively in the premixed cocktail category, with Breezer leading. In 2014, RIO overtook Breezer to reach 40%, while Breezer fell to 20%. In 2015, the entire premixed cocktail market reached its historical peak, with RIO achieving rapid growth of about 70% and revenue reaching 2.213 billion yuan. In 2016, the premixed cocktail market began to shrink, and the industry entered an adjustment period. Small manufacturers and other capital gradually exited, while RIO continued to leverage its brand effect to increase market share and maintain the top position. Baorun's 2020 performance forecast shows that the company expects net profit attributable to shareholders of listed companies to be between 510 million and 556 million yuan, an increase of 70% to 85% year-on-year. Its business revenue mainly comes from RIO premixed cocktails, accounting for 89.3% of total revenue. -03- Current Forms of Distributors Capital Influx: On the Eve of Explosion In 2012, Jiangxiaobai emerged. Its marketing prowess and "heartfelt" packaging quickly won over young people, a group relatively distant from baijiu. The product characteristics of low-alcohol trendy drinks naturally bring them closer to young people, and many emerging wine brands are confident in this market. This niche segment may give birth to the next consumer unicorn. More relaxed scenarios and meeting young people's social needs are the unique aspects of low-alcohol trendy drinks. Last summer, Jay Chou's release of "Mojito" sparked enthusiasm among netizens to mix their own mojitos, with some stores even running out of rum (the base for mojitos). Li Ziqi also inspired countless netizens to brew wine with a jar of homemade green plum wine, and soon social media like Xiaohongshu and Douyin were filled with high-appearance homemade fruit wines. In May 2020, low-alcohol drink brand Likou Bai received millions of dollars in financing from ZhenFund. In August, Berry Sweet, founded less than a year earlier, announced a Series A round of tens of millions of yuan exclusively invested by Matrix Partners China. In the same month, green plum wine brand Bingqing completed a Series A+ round of tens of millions of yuan. In September, Jiangxiaobai, valued at over 10 billion yuan, launched "Guolifang," a fruit-flavored low-alcohol sorghum wine. Bao Fan, chairman of China Renaissance Capital, believes: "China Renaissance has long increased its investment layout in the new consumption field. As a social currency and personality symbol, the alcohol industry needs a giant enterprise that can meet multiple consumption scenarios and personalized consumption needs during the intergenerational cultural transition." Wang Huadong, partner at Matrix Partners China, believes, "The consumption preferences of young people, especially young women, are continuously driving the development of the low-alcohol market, but currently, the low-alcohol fruit wine/sparkling wine category still maintains a pattern of having categories but no brands." Tmall data shows that fruit wine and premixed cocktails are the fastest-growing alcohol categories on Tmall, achieving high growth of about 300% in 2020. From a product perspective, low-alcohol trendy drinks overlap significantly with hard seltzers and fruit beers, and in the future, they will certainly occupy some market space from beer and hard seltzers. If we refer to the development of similar products in the US and Japan, the growth of low-alcohol trendy drinks is a high-probability event within expectations. Innovative products, more suitable scenarios, younger emotional resonance, purer consumption experience—a product path completely different from traditional baijiu is slowly cultivating a new market of hundreds of billions in scale. With surging sales and capital influx, low-alcohol trendy drinks are on the eve of an explosion. Source: Blue Whale Hunshui (ID: hunwatermedia)