Making Moutai for the world

By Alexis Hooi ( China Daily )

Updated: 2015-01-12

China's national liquor needs to cater to international tastes, said the company's honorary chairman, Alexis Hooi reports.

Mention baijiu and many foreigners will turn up their noses at the fiery Chinese liquor.

The white spirit, a mainstay at marathon ganbei toasting sessions and up to 60 percent alcohol by volume, packs a formidable punch.

China's national liquor Moutai is distilled to 53 percent. But the drink is far from rough - it is renowned for its rich, mellow taste and soft "sauce-scented" bouquet.

Serving Moutai is expected at lavish Chinese banquets. It is often offered at high-level functions or presented as luxurious gifts to officials and superiors. A 500ml bottle of its popular Flying Moutai range can cost about 1,000 yuan ($163). The listed Kweichow Moutai Co had more than 40 billion yuan in sales in 2013, an increase of nearly 14 percent from the previous year.

But even China's iconic spirit is facing mounting challenges from lower growth and the impact of government measures to rein in opulent activities involving officials.

Moutai's honorary chairman, Ji Keliang, said now might be the time for the liquor giant to break the mold so it can continue expanding by tapping more into the global market.

That could mean pushing for a major change - by offering a version with a lower alcohol content to make it more palatable to foreigners.

"Everyone knows Moutai is 53 percent alcohol by volume and that's an integral part of its character," Ji said.

"But that might seem too high for foreign consumers, who could be more used to spirits in the 40 percent range."

Ji has been at Moutai for five decades and has also led the group on quality and technical issues. The 76-year-old said lowering the alcohol level would be a clear sign of the company's resolve to develop in line with consumer tastes.

"We need to cater to foreign tastes. We need to listen to the needs and demands of our consumers. We need to first introduce them to the strengths of our product, then they can slowly take to it.

"Over here, we're used to knocking back shots of liquor in groups. For many foreigners, drinking quality spirits might be more about sipping, twirling, appreciating and enjoying it in their individual settings. So we also need to attune ourselves to these habits and adapt accordingly to sell the benefits of Moutai in that context. That most certainly includes lowering the alcohol," he said.

"If they like 53 percent, we'll push that. If they like 40 percent, we should push for that too.

"We need to change how we appear to the international market. We need to observe and research the way forward."

Ji was speaking at the company's headquarters in Maotai, the town deep in the heart of Southwest China's Guizhou province. The area boasts an unsullied and protected climate that is extremely conducive for producing the top-rated liquor.

Going global

In recent years, Moutai has been stepping up efforts to go global and extend its reach from this exceptional enclave.

It already has a growing network extending from Asia to North America, Europe, Australia and major duty-free stores worldwide.

The company exported nearly 1,000 tons of liquor in 2013 that generated sales revenue of more than $160 million.

There are also increasingly encouraging signs on Moutai's road to international recognition. In 2012, it won a gold medal at the World Spirits Award event, placing it among the best liquor globally.

But more needs to be done to ride out the trying times in the industry, Ji said.

The company said it was lowering its sales target for 2014 to 43.9 billion yuan. At 9 percent growth, it marked the first time it had projected a single-digit increase in the past five years. Earlier in the year, it said it was looking forward to 12.5 percent growth by raking in more than 45 billion yuan in sales.

"Yes, there are challenges facing Moutai, but whether it's in 2013 or 2014, among the branded liquors, Moutai experienced the least negative impact," Ji said.

"Based on the latest September figures, sales volume in the industry has fallen significantly. Moutai's, on the other hand, has continued to increase, but not much - less than previously.

"That doesn't mean there hasn't been any impact. We will seriously study our challenges. We still need to go big, we need to continue moving forward and to develop.

"Our leaders have a tough job, but they are very competent. We'll need their capability, our workers' knowledge and the tradition of quality passed down from our predecessors to move ahead."

Drinking to health

To help do all of that, Ji said Moutai has another advantage that sets it apart from other Chinese liquors - its health benefits.

"Ordinary Chinese consumers all know the benefits of drinking Moutai. But foreign consumers might not yet," Ji said.

"People say imbibing drinks with high percentages of alcohol will harm the liver. Moutai contains more than 1,000 kinds of ingredients. Some help mitigate the negative effects that alcohol might have on the liver.

"I've been studying and analyzing the qualities of Moutai for a long time. One of the things I've found out is the amazingly complex combination of its ingredients that come together to reduce any negative effects of alcohol consumption," he said.

"We have documented evidence that shows drinking Moutai is not harmful to the body. We have workers here who are in the pink of health. For instance, we have carried out medical checkups on our employees and those who drink Moutai have not reported any liver ailments.

"There is one case, of someone who did suffer from liver disease. But he was drinking heavily when he was younger and before he was introduced to Moutai, and was drinking many different types of alcohol at that. His liver was already damaged," Ji said.

"I still drink Moutai myself now. My capacity for alcohol is very low. Few people in my family drink. When I arrived in Moutai, I would often find it hard not to drink in the course of my work, when testing the quality of products and entertaining guests. I've drunk about 2 tons of Moutai in my life. Now, I can drink a little less than 100 grams a day," he said.

"I've never suffered from any liver or stomach ailments. None of my medical checkups have come up with any incidence of fatty liver.

"Many people who have drunk other types of alcohol suffered from fatty liver but actually became better after switching to Moutai and drinking it for some time."

There is yet another advantage China's national liquor has over other strong spirits, Ji said.

"One of the most important aspects of Moutai is that, those who get slightly intoxicated from drinking it enjoy a very comfortable 'floating' feeling of inebriation. There's no headache, you sleep well at night and wake up refreshed and extremely clear-headed the next day for work. Other types of baijiu or Western drinks can't give you that.

"There was a once a Western liquor businessman who came here and I deliberately made him drink in excess. The next day I asked him 'Were you drunk? He replied 'yes'. 'Got a headache?' he said, 'No headache. 'Will you get headaches from drinking too much of your liquor? He said 'yes'. I admired his honesty."

Whether it is enjoying the taste or experiencing the after-effects, all these add to the inimitable characteristics of Moutai, Ji said.

"Our unique circumstances are behind our unique product.

"Through its use of local grain, reliance on the weather, local water resources and traditional fermentation and distillation techniques, the production of Moutai and its deep cultural roots reflect the unique characteristics of China's agrarian tradition."

"There's still a lot we don't know about the magic behind the benefits of Moutai. I've studied this all my life, but there's still some way to go," Ji said.

"The next few generations might still not be able to unravel its mysteries."