French spirits maker Pernod Ricard launched The Chuan pure malt whisky in China on Tuesday, the first product released by its local distillery in southwestern Sichuan province.
Pernod Ricard's Chinese-made malt whisky will be distributed throughout the country from Wednesday, priced from 888 yuan (€114.84).
According to Pernod Ricard CEO Alexandre Ricard, the Chinese market is currently "soft, from a contextual point of view" but prevailing macro-economic headwinds are not enough to change the fundamentals of a growing middle class and room to grow for international-style spirits.
"Chinese consumers are really developing a taste for diverse profiles of spirits, in particular whiskies," he said. "We believe the potential is quite significant for the next decade or so."
Pernod is not the only global spirits player increasing its whisky production in China. The company's main rival, Diageo, will also open this month a $75 million (€69.6 million) single malt distillery in the country, under construction since 2021.
There are 30-50 whiskey distilleries in China, Ricard said, with most still under construction.
Pernod is on a mission to overtake Diageo as the world's top spirits maker, and massive emerging international spirits markets like China are key battlegrounds in that fight. China is the world's largest spirits market, but it is currently almost entirely dominated by local alcohol baijiu.
International spirits make up 3% of total alcoholic beverages market in China, which is three and a half times the size of the United States, Diageo executives said at a recent capital markets day, casting China as a key opportunity.
"It's huge ... and we haven't even begun to make inroads into it," John O'Keeffe, President of Asia Pacific, Global Travel and India at Diageo told investors.
Whiskey is a rapidly-growing category, with China's total market value reaching $2.3 billion (€2.13 billion) in 2022, according to market research provider Euromonitor International, with estimates it will grow to $6.7 billion (€6.2 billion) by 2027.
That represents more than 20% annual growth for the next few years, compared to an approximate 4% growth-rate worldwide.
According to Allison Malmsten, public research director at Daxue Consulting, China's baijiu drinkers are aging and production is falling, making room for other spirits.
"Around half of China's whiskey drinkers are Gen-Z, nearly 90% are men, they are generally educated and high-class," Malmsten said, adding that whiskey bars popping up in Chinese cities are "crowded with young people."