Growing income, changing tastes, higher-level opening-up in China boost global retailers' confidence and investments

A niche has developed for imported spirits like whiskey and cognac among young Chinese consumers, fueled by a growing high-income population and their increasingly discerning tastes. Global retailers are investing more in China to meet the demand.

Pernod Ricard, a French wine and spirits group and the world's second-largest producer, said despite the COVID-19 pandemic, its business got back on track in a short period of time, citing the fast recovery of the China market.

In its 2021 fiscal year, the company achieved sales revenues of 8.82 billion euros ($10.08 billion). In China, it netted sales growth of 44 percent during the period, though it didn't disclose specific sales figures.

Pernod Ricard said its sales growth in China indicates that it has gained trust and favor from many Chinese consumers. The company said it would continue to invest in China, as it believes in the strong prospects of the country's wine and spirits market.

"We believe that in the future, the trend of Chinese consumers embracing more diversified wine and spirits categories will only be strong, especially among middle-income and younger generations," said Jerome Cottin-Bizonne, managing director of Pernod Ricard China. "For Pernod Ricard, the market still has a lot of potential to be further explored.

"Our cognac brand Martell is widely welcomed, while our Scotch brands The Glenlivet, Royal Salute and Chivas Regal, as well as premium brands Absolut Swedish vodka, Ballantine's Scotch whisky and Beefeater London gin have continued to gain recognition," he added.

In 2021, cognac sales in China, the category's second-largest market after the United States, jumped 56 percent year-on-year. Some 34 million bottles were shipped, according to France's Champagne industry, as several spirits companies released strong results.

This year, whiskey sales in China are expected to hit about 19.13 billion yuan ($3.01 billion), and whiskey sales volume is predicted to reach 23.65 billion liters, according to market research company Euromonitor International.

French spirits group Remy Cointreau said imported spirits account for a relatively small proportion of the alcohol market in China, and its market share is much smaller than that of Chinese white liquor baijiu. Still, the company is highly confident that the proportion will continue to grow as many consumers have taken up new drinking habits.

In late November, Remy Cointreau raised its full-year profit forecast after a better-than-expected first-half performance, boosted by strong demand for its premium cognac in China, the US and Europe, the company said.

In China, consumers are increasingly looking for new experiences, new flavors and new products in high-quality wines and spirits. Late last year, Pernod Ricard opened a new flagship store named L'Atelier Martell in Guangzhou, Guangdong province, to cater to Chinese consumers' increasing interest in Martell cognac. The store is designed to showcase the history and culture of Martell, the company said.

With the government's implementation of higher-level opening-up, Pernod Ricard thinks more related policies regarding improving the business environment will be carried out, making the China market even more appealing to the outside world.