Alcohol beverage market: Brewers thirsty for a bigger gulp

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At a hip restaurant in Huaihai Middle Road in Shanghai, guests are sipping the latest locally brewed beers with their dinners. The restaurant is a sister brand of Shanghai craft beer brewery Boxing Cat, which delivers many of its beers.

Established in early 2008, Boxing Cat was one of the first craft beer locations in the eastern Chinese metropolis. It now runs brewpubs in Shanghai and one in Beijing, in addition to its sister restaurant Liquid Laundry. Bottled versions of some of their most popular varieties are already being distributed in bottles and kegs.

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As Boxing Cat taps into the craft beer market, another company, Cityson,is eyeing to modernize China's old baijiu liquor, in a bid to break out from a limited number of settings for baijiu consumption and attract a younger and more international crowd.

By adopting liquid state fermentation, Cityson has developed a liquor product that is milder and easier to blend with other ingredients. Its sales channels include bars, restaurants, gastropubs, KTVs, places where hip, internationally minded young people like to meet.

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As China's deep-pocketed consumers increasingly value taste over prices, brewers of both craft beer and craft baijiu are looking to take an even bigger gulp of the alcohol beverage market. Last year, Boxing Cat became an acquired brand under multinational drink and brewing holdings company Anheuser-Busch InBev, a move aimed at boosting its sales channels.

Meanwhile, Cityson is planning to expand into the consumer market by establishing a flagship store on Tmall.com and selling its product to supermarkets and restaurants. The company is eyeing the overseas market, with an ambitious plan to establish a foothold in Europe. It is also looking to acquire shares in distilleries to process its liquor products, standardize production, and reduce cost.

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