Spirits maker Bacardi hopes to differentiate itself in China’s increasingly crowded liquor market with a new drink distilled from tea.
The company has begun producing the light-green colored Tang in small batches with the first 2,000 bottles being offered at high-end restaurants in China starting in May, according to The Wall Street Journal. A 500ml bottle will be priced around 1600 yuan (US$260).
If Tang catches on in China, the company plans to launch a global roll-out within three to five years.
Bacardi’s Asia Pacific innovation director Matt Djokovic explained that the strategy in releasing Tang is to capture the dinner table, where Chinese consume most of their alcohol. Baijiu, the popular clear spirit, is already entrenched in traditional Chinese restaurants, so Bacardi is targeting higher-end Chinese-Western fusion restaurants.
“We wanted to create growth, not imitation,” said Bacardi VP of global innovation Emmanuel Pouey.
Bacardi has spent four years developing a method for extracting the sugars in the tea leaves and fermenting them. The 2,000-bottle first run is a result of the company’s limited production capacity, and it remains to be seen if the drink will catch on in China.
“As consumers become more comfortable with their buying decisions and start to lose the fear of making a bad choice, it is opening the door for companies to try new concepts,” said Ben Cavender of consulting firm China Market Research. He added, however, that Chinese consumers generally shy away from foreign products tailored to the Chinese market, instead favoring products available worldwide.
Mr. Pouey, the Bacardi executive, agreed that while Chinese like foreign products, they ultimately prefer Chinese ingredients.
Selling Tang to the rest of the world may be an even bigger challenge for Bacardi. Though Asian spirits, such as China’s baijiu or Korea’s soju, haven’t caught on in the West, the company is confident that the rise in flavored spirits in the west will buoy Tang’s sales.
Tang’s entry into China comes at a time when other liquor companies’ sales are reeling in the country despite a sales growth in China’s spirits market of 10 percent year-on-year to reach $97.3 billion in 2014.
Pernod Ricard, which announced a drop in sales of 16 percent for the six months ending December 31st, has been pushing lower priced products in China while trying to make up sales in other markets. Diageo has similarly lowered its prices in China. The company’s Scotch, which accounts for nearly 25 percent of its global sales, saw sales drop 6 percent, which it attributed to weak China sales.
image credit: bacardi