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China’s struggling distillers are creating milder versions of the nation’s fiery baijiu, trying to appeal to a younger generation of lighter drinkers. The country’s economic malaise, coupled with Beijing’s crackdown on boozy banquets among government officials and businessmen, is forcing distillers to rethink the grain-based spirit that traditionally contains more than 50 per cent alcohol. In August, Wuliangye Yibin, which has seen sales growth slow for two years, began selling 29° Crush On, a spirit with 29 per cent alcohol by volume – significantly lower than the company’s signature spirit with 52 per cent alcohol content. It hired Cantopop star Gloria Tang Sze-wing, also known as G.E.M., to promote the new brand that comes in a slender, minimalist sky-blue bottle, a contrast from traditionally ornate ceremonial baijiu decanters. Rivals Anhui Gujing Distillery and Shede Spirits introduced products with alcohol volumes of 26 per cent and 29 per cent respectively that same month. ZJLD went a step further, selling its own brand of beer. Other baijiu makers are planning to introduce reduced-alcohol products in the coming months. China’s younger generation rejects the “intense sensation of high-alcohol baijiu”, said Morningstar senior analyst Jennifer Song. “We believe expanding low-alcohol baijiu offerings is a long-term trend, driven by demographic change and rising health awareness.” The distillers’ strategy shift came after sales began fizzling. Wuliangye posted a 4.2 per cent growth in sales in the first six months of 2025, down from 7.1 per cent growth last year and a 12.6 per cent increase in 2023. Smaller distillers have been hit harder. Jiangsu Yanghe Distillery experienced a 35.3 per cent year-on-year revenue drop in the first half, while Jiugui suffered a 43.5 per cent year-on-year sales plunge in the same period. Even Kweichow Moutai, makers of a baijiu known as the spirit of choice for China’s political elite, is growing at the slowest pace since at least 2016. The companies are also grappling with a growing cost consciousness across society. More than 90 per cent of Chinese consumers tend to buy baijiu priced under 500 yuan (US$70), according to a 2023 report from the China Alcoholic Drinks Association. That is significantly cheaper than the price of traditional high-alcohol content bottles. Wuliangye’s 29° Crush On sells for 399 yuan per 500ml (17 fl oz) bottle, while 500ml of its 52 per cent spirit goes for about 1,000 yuan a bottle. There are some early glimpses of success for Wuliangye’s light baijiu. On Alibaba Group’s Tmall, 29° Crush On generated more than six million yuan in September sales, becoming the company’s third most popular brand among its 38 products sold online, data from analytics firm Hangzhou Zhiyi Technology show. The longer-term challenge for distillers is the consumer behaviour of millennials and Gen Zers, many of whom are eschewing baijiu’s potent kick and overpowering taste regardless of the price. “The taste of baijiu is just too spicy for me,” said Wang Bo, a 36-year-old working in the tourism industry. He prefers the milder taste and lower alcohol of beer. A 2022 survey by consulting firm Ries revealed that 70 per cent of 2,219 young Chinese interviewed in 25 cities viewed baijiu as unhealthy and its taste unpleasant. Nearly 40 per cent preferred drinks with an alcohol content of around 10 per cent. Some baijiu makers are also expanding into drinks such as fruit wines and ready-to-drink cocktails. Wuliangye began offering a lychee wine several months ago, while Kweichow Moutai started selling a blueberry sparkling wine last year. Chongqing Jiangxiaobai has gone so far as to rebrand itself away from its baijiu-centric business to a producer of low-alcohol beverages, including fruit wines and flavoured spirits. It is far from a winning strategy at a time when even established vintners are struggling in China. Australia’s Treasury Wine Estates – producer of Penfolds – said lacklustre September sales in China signal it may not meet targets for the 2026 financial year. Baijiu will remain a Chinese cultural icon, analyst Song said. Producing a lighter version of the spirit that retains its strong flavour, though, requires cutting-edge blending technology, and it will take time for market success, she said. The endeavour, Song added, “will help to drive a long-term and more sustainable growth”.
