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On-trade Alcoholic Drinks - China - July 2016

Published By :

Mintel

Published Date : Jul 2016

Category :

Alcoholic Beverages

No. of Pages : N/A

Now is a transformative phrase for the alcoholic drinks market. Growth rate will be low but stable over the next five years to 2021. With the rise of an experiential consumption culture and stronger influence from Western lifestyle and purchasing value, Chinese consumers are eager to seek out innovations in products and on-trade experiences.

Table of Content

Overview

What you need to know
Covered in this Report

Executive Summary

The market
Figure 1: Best- and worst-case forecast for on-trade alcoholic drinks in China, 2011-21
Market drivers and barriers
20-29-year-olds a dynamic market
Blurring line between alcoholic and non-alcoholic drinks
Too reliant on “safe” choices
Impact of online retailing
Companies and brands
New opportunities arising from coffeehouses and fast food chains
Packaging design becoming more artistic and portable
Taste and ingredients seen as quality detector
Social media plus fans gathering
The consumer
New potential rising from coffeehouses, KTV and Western restaurants
Figure 2: Trends in consumer spending on alcoholic drinks in different on-trade channels, March 2016
20-39-year-old men drink more, around once a week
Figure 3: Purchasing frequency at on-trade channels, March 2016
Alcoholic drinks categories demanding more transformational changes
Figure 4: Types of alcoholic drinks purchased at on-trade channels, March 2016
Cider and Champagne show strong linkage with specific occasions
Figure 5: Drinking occasions at on-trade channels, March 2016
Two big product themes emerging: Health and food pairing
Figure 6: Importance of product features in decision-making, March 2016
Channel factors only having limited importance
Figure 7: Factors influencing choice of on-trade channels, March 2016
What we think

Issues and Insights

Shifting from products to experiences
The facts
The implications
Fruit-flavoured alcoholic drinks to fit a healthy lifestyle
The facts
The implications
Figure 8: Product examples of fruity alcoholic drinks
Looking to max effects
The facts
The implications
Marketing around occasions and emotions
The facts
The implications

The Market – What You Need to Know

Sales experiencing negative growth but will recover
Relying on “safe” product options is a key barrier
A big increase in beer imports

Market Size and Forecast

Introduction
Figure 9: Volume sales of on-trade alcoholic drinks, China, 2010-16
Figure 10: Segment share of on-trade alcoholic drinks in China, by volume, 2010-16
Figure 11: Best- and worst-case forecast for on-trade alcoholic drinks in China, 2011- 21

Market Drivers and Barriers

A dynamic market for 20-29-year-olds
Blurring the line between alcoholic and non-alcoholic drinks
Too reliant on “safe” choices
Impact of online retailing

Market Segmentation

Beer going through significant changes
Figure 12: Volume of imported beer to China, 2011-15
Figure 13: On-trade beer sales in China, 2010-16
Wine gaining popularity thanks to its image
Figure 14: On-trade wine sales in China, 2010-16
Chinese spirits becoming more approachable and adapting to younger generation
Authenticity scrutiny drives Western spirits sold in premium on-trade channels
Figure 15: On-trade spirits sales in China, 2010-16

Key Players – What You Need to Know

New opportunities arising from coffeehouses and fast food chains
Artistic packaging design is on the rise
Power of taste and ingredients

Competitive Strategies

A new opportunity rising from coffee plus alcohol
Figure 16: Product examples of Starbucks and Costa
Expansion to traditionally non-alcoholic venues
Enhancing experience and connectivity with consumers

Who’s Innovating?

Artistic packaging design is on the rise
Figure 17: Product examples of limited editions
Figure 18: Product packaging example of Hello Kitty Edition
Figure 19: Product packaging examples of Jiang Xiao Bai
Portable is the new innovation?
Figure 20: Product examples of on-the-go alcoholic drinks
Power of taste and ingredients
Figure 21: Leaflet of Evil Twin Brewing’s imperial stout
Figure 22: Product example of Panda Brew
Deep dive into specific drinking occasions
Figure 23: Product example of Jiang Xiao Bai
The next step for social media – Fans community

The Consumer – What You Need to Know

Product requiring changes in KTV and coffee shops
Alcoholic drinks categories demanding more transformational changes
Health and food pairing being paid more attention
Channel factors only playing a limited role

Spending Trends by Channel

Chinese full-service restaurants and KTVs remain the key channels
Figure 24: Trends in consumer spending on alcoholic drinks in different on-trade channels, March 2016
Coffee shops have potential to be a hot spot for alcoholic beverages
KTV is 20-29-year-olds’ favourite drinking out place
Figure 25: 20-29-year-olds who have spent more on alcoholic drinks, by channel, March 2016
Figure 26: Product example of Wrigley's 5 Cobalt
Females order more alcohol in Western and Asian-style full-service restaurants
Figure 27: Spending more on alcoholic drinks at on-trade channels, by age and gender, March 2016

Purchasing Frequency

20-39-year-old men are key consumers
Figure 28: Purchasing frequency at on-trade channels, March 2016
Occasions preferences different between light and heavy drinkers
Figure 29: Comparison of purchasing frequency of light drinkers (once every 2-3 months or less) at on-trade channels against average, by occasion, March 2016
Higher tier cities drink out more frequently
Figure 30: Comparison of drinking out frequency (percentage of once a week or more) against average, by city, March 2016

Preferences towards Various Types of Alcoholic Drinks

Beer failing to target middle-income drinkers
Figure 31: Types of alcoholic drinks purchased at on-trade channels, March 2016
Figure 32: Beer penetration at on-trade channels, by monthly personal income, March 2016
Wine getting more appreciated by local businessmen
Figure 33: Wine penetration at on-trade channels, by monthly personal income, March 2016
Figure 34: Wine penetration at on-trade channels, by company type, March 2016
Figure 35: Wine penetration at on-trade channels, by city, March 2016
Chinese spirits lacking product innovation
Figure 36: Chinese spirits penetration at on-trade channels, by city, March 2016
Figure 37: Product examples of ‘new’ sake
RTD alcoholic drinks facing downturn
Figure 38: Ready-to-drink alcoholic drinks penetration at on-trade channels, by age and gender, March 2016
Figure 39: Ready-to-drink alcoholic drinks penetration at on-trade channels, 2015 and 2016
Figure 40: Product examples of ‘mature’ RTD alcoholic drinks

Drinking Occasions

Alcoholic drinks mostly consumed in casual social occasions
Figure 41: Drinking occasions at on-trade channels, March 2016
Figure 42: Selected drinking occasions at on-trade channels, by age, March 2016
Beer losing ground among consumers
Figure 43: Comparison of beer purchased at on-trade channels against average, by occasion, March 2016
Cider getting more consumer attention across various occasions
Figure 44: Comparison of cider purchased at on-trade channels against average, by occasion, March 2016
Western spirits becoming more popular than Chinese spirits for business occasions
Figure 45: Comparison of on-trade alcoholic drinks purchased for business occasions against average, by alcoholic drink, March 2016
Champagne for festival occasions
Figure 46: Comparison of Champagne purchased at on-trade channels against average, by occasion, March 2016

Product Features

Consumers’ emphasis on health indicates new ways of marketing alcoholic drinks
Figure 47: Importance of product features in decision-making, March 2016
Figure 48: Product examples of ‘natural’ alcoholic drinks, March 2016
Figure 49: Percentage of respondents who think “Good for health” is an important or very important product feature when deciding which alcoholic drinks to buy at on-trade channels, by city, March 2016
Food pairing suggestions becoming more important
Females desire greater flavour variety
Figure 50: Percentage of respondents who choose 'Innovative flavours (eg fruit-infused wine)' and 'Exotic flavours (eg sakura-flavoured beer from Japan)' as an important feature when deciding which alcoholic drinks to buy at on-trade channels, by gender, March 2016
Figure 51: Percentage of respondents who choose 'Designed for specific groups (eg beer with light flavour for women)' as an important feature when deciding which alcoholic drinks to buy at on-trade channels, by gender and age, March 2016
Figure 52: Product examples of ‘female’ targeted alcoholic drinks, March 2016
South of China like locally made
Figure 53: Percentage of respondents who choose ‘Locally produced products' as an important feature when deciding which alcoholic drinks to buy at on-trade channels, by city, March 2016

Channel Choice Factors

Insignificant channel preferences
Figure 54: Factors influencing choice of on-trade channels, March 2016
Niche brands need to do more
Figure 55: Menu display about story-telling marketing
30-39-year-old males feel the strongest need to impress
Figure 56: Percentage of respondents who choose ‘Premium alcoholic drinks’ as an important factor when deciding on-trade channels, by gender and age, March 2016

Meet the Mintropolitans

Figure 57: Consumption frequency of on-trade alcoholic drinks, by consumer classification, March 2016
Figure 58: Percentage of consumers who spend more on on-trade alcoholic drinks at on-trade channels, by consumer classification, March 2016
Figure 59: Occasions of purchasing alcoholic drinks on-trade, by consumer classification, March 2016
Figure 60: On-trade consumption of different types of alcoholic drinks, by consumer classification, March 2016
Figure 61: Importance of product features in decision-making, by consumer classification, March 2016
Figure 62: Selected factors influencing choice of on-trade channels, by consumer classification, March 2016

Appendix – Market Size and Forecast

Figure 63: Best- and worst-case forecast for beer in China, 2011-21
Figure 64: Best- and worst-case forecast for wine in China, 2011-21
Figure 65: Best- and worst-case forecast for spirits in China, 2011-21
Figure 66: Volume forecast of on-trade alcoholic drinks, by segment, 2011-21

Appendix – Methodology and Abbreviations

Methodology
Fan chart forecast
Abbreviations

List of Table

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