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Mar. 21 (NBD) -- China's pre-mixed cocktail market starts cooling down as share price of Shanghai Bairun Investment Holding Group experienced a roller coaster ride.  

The pre-mixed cocktail industry witnessed an expansion after 2011. The sales volume of pre-mixed cocktails in 2013 hit about 10 million with the sales amounting to around 1 billion yuan (157.7 million U.S. dollars), accounting for 0.12 percent of the total liquor industry in China, reports said. The sales volume is predicted to surge to 150 million in 2020.

Most players exited from pre-mixed cocktail industry 

Known as the two leading pre-mixed cocktail brands in China, Bacardi Breezer and Shanghai Bairun's Rio held about 30 and 20 percent market shares respectively in 2013. But Rio achieved fast expansion the next year by posting advertisements in TV series and variety shows, sending its market share up to 40 percent.

In 2014, Chinese liquor producer Gujing Group, Wuliangye Group and soymilk manufacture Black Cow Food also released its cocktail brand and the juice producer Huiyuan as well as another alcohol beverage manufacturer Yang He entered the market the next year. Moreover, from 2016 to 2017, the liquor giant Moutai and Luzhou Laojiao launched their cocktails.

But most of the pre-mixed cocktail brands except Rio exited from the market after the market gloom in 2015 and 2016. A staff member in Carrefour told NBD that Rio is almost the only pre-mixed cocktail brand they are selling now. The products are mainly sold in places of entertainment such as karaokes and bars.

Pre-mixed cocktail market size may not exceed $2.4 bln in 5 years

According to a report published by Shenwan Hongyuan Securities in July 2015, the size of pre-mixed cocktail market stood at 3 billion yuan (473.4 million U.S. dollars) in 2014, presenting a rise of 200 percent. Given that the current market size is still small and pre-mixed cocktails are expected to replace the traditional alcoholic beverages in the future, the market is predicted to grow rapidly.

The market size is forecasted to reach 30 billion yuan (4.7 billion U.S. dollars) within 5 years if the average consumer spending on pre-mixed cocktails increases to 2 percent of that for beers and terminal sales price declines less than 20 percent. The metric is expected to hit 58.5 billion yuan (9.2 billion U.S. dollars) as long as the spending could rise to 5 percent of that in beer market.

However, some insiders put forward different views. 

An alcohol and drinks wholesaler in a second-tier city of East China commented that the pre-mixed cocktails are more favored by young consumers, thus the market is relatively small and limited. 

Zhu Danpeng, an analyst in China's food industry, shared the same opinion about the market, explaining that as the pre-mixed cocktail is a niche category, the domestic market value will be under 10 billion yuan (1.6 billion U.S. dollars) and the pre-mixed cocktail market won't exceed 15 billion yuan (2.4 billion U.S. dollars) in the coming 5 years.

 

Email: zhanglingxiao@nbd.com.cn

Editor: Zhang Lingxiao