---
title: "The Low-Alcohol Trend: Even Moutai Has to Follow"
description: "Low-alcohol beverages are becoming a new trend in the drinks market. Besides brands like Jiangxiaobai and RIO that target young drinkers, newly listed Naixue's Tea, Coca-Cola, and Genki Forest have all launched low-alcohol products, while ByteDance, NetEase Yanxuan, and Alibaba also have their own brands. Public data shows that in 2021 up to May, the alcohol sector saw 27 financing rounds totaling about 2.508 billion yuan. Over the past decade since 2011, domestic alcohol investments have exceeded 55 billion yuan, prompting traditional distilleries like Moutai and Wuliangye to introduce competing low-alcohol brands."
author: "葛煜"
publisher: "New Distribution"
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published: "2021-07-09"
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# The Low-Alcohol Trend: Even Moutai Has to Follow

> Low-alcohol beverages are becoming a new trend in the drinks market. Besides brands like Jiangxiaobai and RIO that target young drinkers, newly listed Naixue's Tea, Coca-Cola, and Genki Forest have all launched low-alcohol products, while ByteDance, NetEase Yanxuan, and Alibaba also have their own brands. Public data shows that in 2021 up to May, the alcohol sector saw 27 financing rounds totaling about 2.508 billion yuan. Over the past decade since 2011, domestic alcohol investments have exceeded 55 billion yuan, prompting traditional distilleries like Moutai and Wuliangye to introduce competing low-alcohol brands.

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Low-alcohol beverages are creating a new trend in the drinks market.
Besides brands like Jiangxiaobai and RIO that originally targeted young drinkers, newly listed Naixue's Tea, Coca-Cola, and Genki Forest have all crossed over to launch low-alcohol products; ByteDance, NetEase Yanxuan, and Alibaba also have their own low-alcohol brands.
**Public data shows that in 2021 up to May, the alcohol sector saw 27 financing rounds in five months, totaling about 2.508 billion yuan.**
**Looking at a longer timeline, from 2011 to now, over the past decade, domestic alcohol investments have exceeded 55 billion yuan. Prominent investment institutions such as Sequoia Capital, China Growth Capital, Tiantu Capital, ZhenFund, and Bertelsmann have all positioned themselves in this track.**
For traditional distilleries like Moutai and Wuliangye, although they have always claimed that young people don't drink Moutai because they "don't understand," **with capital pouring in and various new low-alcohol brands emerging and continuously occupying the young consumer group, they have had to produce comparable low-alcohol brands to compete.**
The domestic low-alcohol beverage market is also fiercely competitive.
**New Distilleries Deeply Entangled in "Involution"**
As a hot new consumption track, low-alcohol brands have been in the spotlight of capital over the past year or more.
Since the beginning of last year, more than ten low-alcohol companies have received financing, all quickly securing multiple rounds in a very short time, with well-known investment institutions in the queue.
MissBerry, targeting female aesthetics, launched fruit wines with exquisite packaging and good taste, securing three rounds of financing in 12 months, with investors including China Growth Capital; Lanzhou, with a background from Jiangxiaobai executives, targets light-to-moderate drinkers, focusing on fruit wine, and just completed an angel round; Fubixing completed three rounds of financing in four months; Likou Bai received several million dollars in financing from ZhenFund, etc.
To strengthen user awareness, many new low-alcohol brands have adopted a high-profile strategy. Low-alcohol beverages segment the drinks market and also segment consumers. In the hundred-billion-yuan low-alcohol market, women are the backbone maintaining continuous market growth.
**A search for "women's drinks" on Xiaohongshu shows over 120,000 related notes, all content from brands spending money on placements, rankings, and seeding.**
Besides heavy marketing, the new distilleries' trend has also blown into livestream rooms. Last year, Luo Yonghao's "Make Friends" livestream room sold alcohol in its second session, with Guxiaojiu exceeding 10 million yuan in sales within 90 minutes. Li Jiaqi sold Meijian plum wine in his livestream, selling out 200,000 bottles.
**Dining scenarios are the main consumption scenes for alcoholic beverages, so unlike other new consumer brands that can focus online, penetrating offline is a key point for brand survival.**
Jiangxiaobai has always adopted an offline-first channel strategy, launching low-alcohol products like Meijian and Guolifang last year. "Although Meijian is present on major e-commerce platforms, e-commerce channels only account for a small part of the overall channels," a Meijian representative once told the media, adding that Meijian is trying to enter more dining consumption channels.
On the other hand, the "predecessor" RIO, although a regular in variety show advertising, is also constantly competing for offline channels, transforming from bottled in KTVs to small, fresh canned versions in convenience stores. Data shows that in 2019, RIO's revenue reached 1.468 billion yuan, with offline sales accounting for over 80%.
As many players flood into the low-alcohol field, this track is becoming increasingly crowded. One investor bluntly said, "There are too many making low-alcohol drinks; China's women are no longer enough."
**Old Distilleries Seeking "Youth"**
"If young people don't like drinking Moutai, then they don't understand," said Ji Keliang, former chairman of Kweichow Moutai, in an interview. But in reality, traditional enterprises, while maintaining their original brand series, have been trying to please young people in the low-alcohol field.
**The reason behind this is not hard to understand: for these traditional distilleries, low-alcohol brands are not their main products, but with various alcohol brands constantly appearing, no one can guarantee that in a few years, a certain brand will occupy the minds of the main consumer group.**
Therefore, traditional distilleries represented by Moutai and Wuliangye have launched their own low-alcohol products.
As early as 2017, Moutai launched the low-alcohol cocktail brand Youmi, with an average price of around 200 yuan. It is understood that this product is positioned for young people, especially women, with a bottle design that breaks from Moutai's usual packaging, adopting a narrow mouth and elongated body.
To integrate into the young crowd, the product was also embedded in the hit drama "Ode to Joy 2" and placed on Moutai's Tmall flagship store. According to Jiemian data, in two years, Youmi sold over 6,000 cases on its Tmall flagship store.
To seize the minds of young consumers, old distilleries have gone to great lengths. Two years after Moutai launched Youmi, Luzhou Laojiao established a fruit wine company and launched three plum wines: Qingyu, Huajianzhuo, and Tingyue Xiaozhu. Previously, Luzhou Laojiao also launched the "Taohuazui" brand during the popularity of the TV drama "Eternal Love."
But whether in packaging or price, they still haven't figured out the consumption mindset of young consumers. After a brief attempt, old distilleries gave up on the low-alcohol market and products.
In mid-May this year, Wuliangye New Retail Management Co., Ltd. launched fruit-flavored liqueur and prepared fruit wine "Wudiao." Before this, Wuliangye had launched fruit wines like Xianlin green plum wine and pomegranate wine in 2014, but the market response was lukewarm.
Just recently, Luzhou Laojiao directly deregistered two of its white liquor companies targeting young consumers. Although the official statement said this was due to business development, the fact that these companies were deregistered after only two years indirectly signals problems in their brand youthfulness path.
In fact, old distilleries like Moutai launched low-alcohol products just to inject a youthful image into their brands. Moutai's e-commerce technical director Gao Liwen once said, "In Moutai's brand, if products like Youmi take up an increasing share, the interests of traditional distributors would be harmed, thus destroying the original distributor ecosystem."
Indeed, traditional distilleries have always been positioned as high-end, and low-alcohol products are unlikely to become strategically significant within them. **But as the concepts of the mainstream consumer group continue to change, there still needs to be products suitable for this consumer group to establish a youthful brand perception.**
**The Ceiling Within Reach**
Many new and old players flooding into the low-alcohol track must face a reality: "alcohol" is not as profitable as "tobacco," and the lower the alcohol content, the lower the gross margin.
Low-alcohol beverages have a relatively low entry barrier and rely on economies of scale to make money. A key point of the scale economy barrier lies in supply chain capability.
Due to the high cost of building their own factories, many new brands adopt OEM and ODM contract manufacturing, or cooperate with distilleries on new production lines. From flavor development to product launch, the production cycle for a brand can be as short as one day.
This model seems "light," but most of the brand's profits are divided up in the lengthy sales channels, and by the time it reaches users, the price is basically tripled. Moreover, under the OEM model, brands find it hard to develop differentiated competitive capabilities.
Sun Wei, an investor in the beer brand Panda Brew, once told Meijing Headlines, "Factories will definitely sell good-tasting product formulas to more customers; there is no exclusive formula, and factories also need to make money."
**The most important thing for alcoholic beverages is still quality and craftsmanship barriers. Although low-alcohol is a segmented track, its core logic remains unchanged: it should start from brewing skills and liquor reserves, relying on one's own supply chain to win on quality and taste.**
But for now, new distilleries are still at the stage of "how to play with flavors," launching new flavors like fruit wine, chocolate wine, rice wine, and tea-flavored wine. Many brands, to take shortcuts, also directly apply concepts like "0 calories, 0 sugar" to low-alcohol drinks, and some even tout health drink slogans, labeling them as "alcohol-free beer."
**The low-alcohol field, suffering from "involution," not only has a low ceiling but also insufficient profit margins.**
As new players in the drinks market, low-alcohol beverages do not have tax advantages. According to Frees Fund analysis, most alcohol taxes in China are around 10%; the actual tax rate for baijiu ranges from 8% to 16%, beer from 4% to 9%, and many low-alcohol drinks, including premixed and prepared wines, are taxed as "other alcohol" at about 10%.
Currently, low-alcohol beverages are still in the early explosive stage, a blue ocean, with many players fighting, yet no head player has emerged so far.
Who will ultimately drink the last drop in the low-alcohol battle still needs time to verify.
Source: Zinc Finance (ID: xincaijing) Author: Ge Yu
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