Interview | Jim Rice on Taking Shuijingfang Upmarket in China, Localizing Baijiu Abroad

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Jim Rice, CEO of Sichuan Swellfun, is going upmarket.

High-end baijiu sales have been hit hard since the central government launched an austerity campaign two years ago, but Rice sees opportunities in the premium niche, including for his company’s brand, Shuijingfang, in which global drinks giant Diageo is the main investor.

“The industry reaction to the downturn was to go downmarket. We did the opposite and went up,” he says. “We want to make Shuijingfang the Bentley of baijiu.”

The strategy is based not only on the still substantial number of luxury goods buyers in China, but also supply and demand, namely, Shuijingfang is a premium brand that is produced in much smaller amounts than, say, Wuliangye. (He says the difference is 1,000 tons versus 32,000 tons.)

“We limit production to 1,000 tons. Our lowest price is 468 yuan per bottle and it rises to 68,000 yuan for a limited-edition high-end product. There were only 28 bottles [of that product] and they sold out in two weeks,” he says. “It’s similar with our Chairman’s Private Reserve. We made 1000 bottles — I sign them myself — and we sell them for 3000 yuan per bottle.”

Rice, who first visited China in 1987 as a UCLA student, made a permanent move here in 1990, and has worked for Kimberly-Clark, Danone and Tyson Foods, says overseas success for baijiu will require a lot of work. Baijiu is seen “as a novelty at best” and needs to be made mainstream enough that it is “something a decent bar will stock at least a bottle or two of,” he says

That will require some localizing, he adds. He cites the example of a tasting in Long Beach, California, where baijiu was served in cocktails, on ice and, as is typical in China, straight up at room temperature.

“On the rocks, they liked it,” he says, as that method subdued the pungency first-time drinkers might find strange or tough to handle.

“Outside of China, we need to sell it the way people want it and not necessarily done in series of shots at room temperature,” he adds.

Rice also cites the importance of telling the story behind baijiu and points to the 600-year history of Shuijingfang’s distillery as an example. One advantage, he says, is that  people are already open to learning more about China.

“If you’re interested in China’s history and culture, it’s all in baijiu.”

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