Shaken or stirred, can martinis make it in China?

Updated: 2015-03-18 10:36

By AMY HE in New York(China Daily USA)

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Shaken or stirred, can martinis make it in China?

Philadelphia Distillery is looking to market its gin, Bluecoat American Dry Gin, to Chinese drinkers. American spirits are seeing increasing popularity with the middle class in China. Provided to China Daily.

Chinese interest in American spirits is on the rise and one Philadelphia distillery is hoping to draw in middle class customers in a market whose tastes are slowly changing and orienting towards the West.

"Western spirits are becoming more attractive. They are becoming more accepted, and the growing middle class - and particularly upper class - often give imported spirits" as gifts, said Andrew Auwerda, founder and president of Philadelphia Distillery, the first craft distillery opened in Philadelphia since the days of Prohibition.

Philadelphia Distillery is pushing its Bluecoat American Dry Gin in the Chinese market, last week shipping a few thousand bottles to buyers in Shanghai, where it will be sold to high-end hotels and restaurants.

Auwerda said in the short term their goal was exposing the brand to travelers going into such venues in the key markets. "What's important for me, for one of my customers, for investors, for potential acquirers, is to find my bottle being served at a premium hotel in Shanghai. There's value there to me beyond the $2 we make on that bottle," he said.

Gin is not the most popular American spirit with Chinese drinkers - that title is held by whiskeys and bourbons - but that doesn't discourage Auwerda, he said.

The Chinese alcohol market is notoriously difficult to break into, despite the country being the world's largest alcohol market, accounting for almost 40 percent of global spirits consumption.

"We want to be there early. We know it takes a long time. I don't think the average Chinese has a thirst for gin, but is there a segment that does? Yes. Is there a segment that finds it a beautiful gift? Yes. Is there a segment that might become accustomed to it when they are presented it in a certain cocktail in a certain way? Absolutely," said Auwerda.

The Chinese are developing a taste for American wine and are incorporating American spirits into their gift-giving, which makes up an important component of alcohol sales in China.

Since the government imposed a crackdown on lavish gift-giving in 2012, imported scotches and cognacs have taken a hit, but because of spirits' relatively moderate price point, sales weren't affected as much, according to Frank Coleman, senior vice-president of public affairs with the Distilled Spirits Council of the US.

US spirits exports to China have soared in the last ten years since import duties were reduced down to 10 percent from 65 percent in 2005. According the US Department of Commerce, exports of US spirits increased almost five-fold between 2004 and 2014, from $3.1 million to $14.3 million.

"There's no question about the rising popularity of American spirits," Coleman said.

The Distilled Spirits Council, a national trade organization representing US distillers, began promoting American spirits in China in 2007 to bring awareness of the products to cities like Beijing, Shanghai, Tianjin, Hong Kong and Guangzhou.

"There's a booming nightlife scene across China, not just in the front-tier cities, but also in the second-tier cities," he said.

The trade group is promoting American spirits by teaching bartenders and buyers about the uniqueness of the products and how to use them in specialty cocktails.

"Foreign spirits of all kinds are still a very, very small percentage of the China market, but it is growing, and the companies are very optimistic about their future there because of the growing middle class and the desire for international products. It's a common scene," Coleman said.