The China alcohol ingredients market is projected to grow at a CAGR of 9.55% to reach a market size of US$5.982 billion by 2025. The estimation is in part substantiated by the nominal increase the per capita disposable income of residents nationwide during the first half of 2020 by of 2.4 % over the same period of last year and accounted for 15,666 yuan. Among them, the per capita disposable income of urban residents accounted for 21,655 yuan, an increase of 1.5 %. Further, In the first half of the year, the per capita consumption expenditure on food, tobacco, and alcohol was 3,097 yuan, an increase of 5.0 %, accounting for 31.9 % of the per capita consumption expenditure On the other hand the potential for the growth of this market is also dependent in part due to the total number of Chinese population in the mainland that reached 1,400.05 million which is a reported increase of 4.67 million over that of registered at the end of 2018. Besides this total population, urban permanent residents numbered 848.43 million, accounting for 60.60 % of the total population which is 1.02 % higher than recorded data over the same period of last year. Moreover, the rate of urbanization of the population with household registration was 44.38 %, a reported 1.01 percentage points higher than that at the end of 2018. It is also important to note that in 2019, the total retail sales of consumer goods reached 41,164.9 billion yuan, reported a growth of 8.0 % over the previous year. Out of the total retail sales of commodities, the sales of liquor were up by 7.4 %. Also, in 2019, the value-added of the hotels and catering services was 1,804.0 billion yuan, up by 6.3 % over the previous year [Source: National Bureau of Statistics of China]. Thus, the aforementioned market conditions are conclusively conducive not only to the liquor industry but also for the potential growth of the same in the foreseeable future. These developments are in turn expected to foster the growth of China alcohol ingredient market.
The consumption of alcohol worldwide is governed by a certain salient factor that facilitates the growth of the liquor market and paves the way for more products inclination and promotes its subsequent sales. The same is the case for China. Partly based on the factors mentioned earlier, the chinse consumption patterns are shifting and are increasingly being geared toward products that cater to their taste and are not just restricted to the value for money. Further with a surge in wine consumption and high investments in advertisements to reach out to the younger consumers are also expected to fuel the growth of the alcohol ingredients market. These changes have led to certain developments that are expected to positively influence the china alcohol ingredient market. For instance, in April 2019, it was reported that Diageo and Jiangsu Yanghe Distillery Co., Ltd announced the launch of Zhong Shi JiTM which is essentially awhiskey that is specially crafted with care by master blenders and distillers from China and Scotland. This new product development has been carried out through a new joint venture formed between Diageo and Yanghe, China’s third-largest Baijiu distiller.