Travel

The China syndrome

Shanghai is now one of the world's cutting edge cities and blended whiskies are gaining big markets. But what about malts? Graham Thompson has been peering into his dram to find out more
By Graham Thompson
In Shanghai’s trendy French Concession district, there is a wee piece of Scotland, but it is not quite what you might expect.Narcicus is full of trendy young folk knocking back great volumes of Chivas Regal at 30 RMB (£2.00) a shot or 480 RMB (£32) a bottle, usually with unlikely mixers such as green tea (purists should not look too closely).Behind the bar there are dozens and dozens of bottles. An enthusiastic band performs dance hits for the gyrating youth. In the sticky summer heat, the hedonism of the city’s past has returned, fuelled by roaring economic growth.‘Chill out with Chivas,’ says the company’s advertising. It is in fact the No.1 imported spirit. As Kathie Wang, local public relations officer for owners Pernod- Ricard, says: “liquors are often rooted deeply in the strong historical and cultural background of a particular nation,
and acceptance of imported liquor is virtually the positive identification with another culture”.If so, the denizens of Narcicus are honorary Scots. But to anyone used to drinking Scotch at home, Chinese consumption styles are quite striking. Spirits are drunk with business associates, with friends, in large groups, before dinner, during dinner, after dinner, in the karaoke lounge.Ninety per cent plus is consumed in food and beverage outlets. The normal order is not the dram, but the bottle. Or maybe two.China consumes 10 billion cases of spirits annually. Almost all is ‘moutai’ and other domestic tipples. Imported spirits amount
to only one million cases, mostly cognac. “We Chinese have an impression that imported alcoholic drinks are expensive,” says Wu Jianhua, secretary general of the Shanghai Brewing Association.They are. Malts cost 70 RMB (£4.70) a shot or more.He adds: “Most are consumed in bars or sent as gifts – the perception is hard to change in the short term.”And some Chinese, such as local financial journalist Roger Zhou, still think whisky is ‘too strong’. This is ironic, given moutai’s potency, with alcohol by volume above 40%, some even over 50%.But with greater health awareness, sales of moutai are declining, against the overall trend for alcohol, and this may offer opportunities for foreign brands.Whisky consumption is certainly growing, up 33 per cent by volume since 1997, says local economic consultancy Access Asia. Scotch quantities remain small– 3.4 million bottles in 2003, according to the Scotch Whisky Association – but some blends do very well. Chivas, Johnnie Walker Red and Johnnie Walker Black are found pretty much everywhere, alongside Ballantine’s, Famous Grouse, and Cutty Sark.But as Jonathan Di Rollo, brand ambassador for Ballantine’s, explains, few at his tastings understand the drinks’ subtleties. In modern China, brands are king.“People buy what they perceive as fashionable”, says Iain Robertson, manager at Sashas, a stylish Shanghai bar.At the Blarney Stone, an Irish pub popular with locals and ex-pats alike, owner Declan Surlis agrees.“They buy for brand and face” – ‘face’ being the Chinese concept of ‘self-respect’ or ‘status’.Marketing executive Abby Yu admits she drinks Chivas “for the image, not the taste.” However, most Chinese are still drinking blends. Big names such as Macallan, Glenfiddich, and Glenmorangie are thin on the ground. Bar selections are small – five to 10 at most.The selection found in Hong Kong, Singapore or Scotland is not yet available. Every product must be individually registered, making introducing a new brand time-consuming, and the government sometimes demands a container-load as the minimum import.“Malts in China are unknown,” says William Wong, business manager Asia for Glenmorangie.Martin Reimann, regional managing director for Edrington, promoting Macallan, compares China now to Japan or Taiwan in the early 1980s.“The market is embryonic,” he says. Glenfiddich’s brand ambassador Harry Cao agrees.“When we began our work in China, consumers could not even tell the difference between whisky and brandy,” he says.Glenfiddich launched in Shanghai in 2001 and later added Beijing and other major cities. Initially, sales volume was not the major purpose. With zero consumer knowledge, they focused on public relations and training business partners.Cao says it is “now the undoubted No.1 single malt in China,”with perhaps 80 per cent market share. Macallan avoids the ‘tartan, heather, and stag’ image that often bedevils Scottish marketing. It is collaborating not with other Scottish companies, but Bentley cars and good cigars.Reimann describes a typical Macallan drinker as “someone who wants to live life to the fullest, but not to excess”.Experience in Taiwan and Japan gives him hope – consumers there went wild for malts – and China could go the same way So the key to China, Reimann says, will be “evangelism… we must take people on the journey of discovery.”His target audience is aged around 40, with experience of blends. His office doubles as a bar, with samples of the 12, 15, 18 and other rare Macallan expressions. Here, he gathers potential customers or key opinion-formers such as hotel food and beverage directors and their sommeliers, to turn them into Macallan ‘advocates’.Glenmorangie is working on ‘new products’ specifically designed for Asia, reveals Wong. He believes premium products, maybe in special packaging and at the rarer ages, could do very well. Meanwhile, the brand is consolidating its relationship with its local distributors and training sales staff. Wong believes this work can develop the market not just for Glenmorangie, but for all malts.And some outlets are already trying educational techniques. At the Shanghai JW Marriott Hotel, food and beverage director Mark van der Wielen is aiming to launch a ‘whisky trail’ this autumn, with 16 malts, many never seen before.They include Bowmore’s Dark Sherry Finish, 12 and 17 year olds; Macphail’s Highland Park 8 year old; Ardbeg’s 1993; Glenmorangie’s 10 year old and Port Wood Finish; and Macallan’s 12 and 18 year olds. As well as selling by the glass or bottle, he will offer a five glass ‘tasting trail’ to demonstrate the different Scottish whisky regions.The industry hopes initiatives like these will generate increased volumes. As Harry Cao says: “Chinese consumers are getting more and more mature and they are keen to find some higher standard, better taste products.” The other brands are just as quietly confident. Some Chinese are certainly learning – import/export manager Lydia Huang takes Glenfiddich neat, “to taste the purity of the drink.”Maybe one day soon, we will find more specialist whisky bars in Shanghai alongside Narcicus.