Baijiu Overtakes Whisky in Global Brand Value; a New Sponsorship Contender?

According to the report – from Brand Finance, which measures the inherent value of thousands of brands and categories worldwide –  Baijiu’s share of total brand value within the Alcoholic Beverages category grew from 23% in 2016 to 37.5% in 2017.

The surge saw the Chinese beverage overtake Whisky, which dropped from 37% in 2016 to 28% in 2017. Four Baiju brands ranked in the top ten, securing a combined value of over US$20 billion.

In the Sponsorship market, Baijiu brands have also been buoyant, pumping almost US$1b into the Asian platforms since Q214… correction: the Chinese Sponsorship platforms because – as of now – they haven’t begun to invest ex-China (apart from some nibbles in Hong Kong). Perhaps they haven’t cracked the export market – dominated by the bigger booze conglomerates such as Diageo and Pernod Ricard – to warrant building the brand in other markets. And since Q116, even domestic sponsorship has quietened after some large-scale deal withdrawals across CCTV channels.

Baijiu brand Moutai is ranked the world’s most valuable spirit brand at US$11.5 b for the second year running, well ahead of Johnnie Walker, which is valued at US$4.5 billion. Baijiu brand Yanghe secured third place after a 50% surge in growth saw it valued at US$4.2 b. Jack Daniels and Hennessey placed fourth and fifth with US$3 b and US$2.7 b, respectively.

Moutai’s value grew 60% in 2017, driven by strong consumer demand for the brand, despite an increase in bottle price, which rose to US$175. The brand has also expanded into other markets including the US and Germany.

Brand Finance CEO David Haigh, however, cautioned that growth in the Baijiu market may be a temporary trend, “These rates of growth support existing evidence to suggest that consumers are trading up to more premium Baijius. The Baijiu market is resurgent but some have suggested this may only be temporary and that Chinese consumers’ tastes will diversify without corresponding growth internationally to compensate. In such a situation, strong brands will be essential to maintain market share.”

So until China decides to export Baijiu, with a huge concerted push on the back of domestic profits, international brands need not worry about competitive clutter in the rest of the Asian Sponsorship marketplace.