Bacardi creates tea spirit

Bacardi is launching a tea-distilled liquor in China in a bid to differentiate itself in a spirits market that sank amid a government-led austerity campaign.

Bacardi will sell 2000 bottles of Tang, a light-green alcohol made from green tea leaves, in upscale restaurants for around 1600 yuan ($340) for a 500ml bottle starting in May, says Matt Djokovic, Bacardi’s Asia Pacific innovation director.

If it catches on, global distribution is planned in the next three to five years.

Foreign alcohol companies such as Diageo of the UK and France’s Pernod Ricard have poured into China in recent years, competing against local Chinese liquor makers for share in a market where sales reached $US97.3 billion in 2014, up nearly 10% from a year earlier, according to market research firm Euromonitor International.

Bacardi says the tea liquor is the first of its kind and will enable the company to separate itself from competitors. 

“We wanted to create growth, not imitation,” Bacardi’s vice president of global innovation Emmanuel Pouey says.

A government campaign against waste and corruption has led to a sharp drop in gift-giving of luxury goods such as alcohol among bureaucrats and executives of state companies. 

But many middle class families are still keen on buying expensive alcohol.

Mr Djokovic says Bacardi’s strategy is to win a spot on the Chinese dinner table, where most alcohol is consumed. This is why it is going after higher-priced restaurants that are likely to sell Chinese-Western fusion fare.

It took Bacardi four years to develop methods to extract complex sugars from tea leaves, ferment them and then blend in other flavours and French spring water, Mr Djokovic says.

Bermuda-based Bacardi’s annual revenue is estimated at more than $US5 billion. Its portfolio of more than 200 brands sold more than 62.5 million cases world-wide in 2013, making it the No 4 player in the spirits industry by volume behind Diageo, Pernod Ricard and Beam Suntory.

Mr Pouey says he is confident the drink will have appeal in the West, though others say similar spirits, such as the Korean liquor soju, that are made from rice, wheat or barley, don’t have wide global appeal.