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What's the Fastest Growing Alcoholic Drink in China? ‘Liquid Cake,’ Not Imported Wine

| Jan 20, 2017 08:37 AM EST

A woman handpaints jars of rice wine in a rice wine factory in Shaoxing.

Yellow rice wine, also known as 'liquid cake', is now gaining popularity as the fastest growing alcoholic drink in China, posting nearly 8 percent sales volume last year, according to brokerage firm China International Capital Corp. (CICC).

A report by chinabevnews.com identified the top three yellow rice wine producers in the country as Kuaijishan Shaoxing Wine Co., Shanghai Jinfeng Wine Co. and Zhejiang Guyuelongshan Shaoxing Wine Co.

The sales in yellow rice wine climbed after the sales growth for liquor and regular wine, including beer sales, dropped in 2016.

Yellow rice wine, which dates back to the Shang Dynasty more than 3,000 years ago, has less alcohol than the more famous baiju liquor, which is once favored by Chinese army generals. According to CICC analysts, 'liquid cake' is also nutritious as it contains eight essential amino acids.

CICC analysts said that the position of yellow rice wines in the market can easily be identified by Chinese consumers since they are categorized based on age, production region and taste while imported grape wines have no such classification system in China.

This allows yellow rice wine to have a better position, especially when consumers shift taste. For instance, consumers shifted from Anhui's 5-year-old Kouzijiao, which sells for about 80 yuan ($12), to its 6-year-old version which is 40 percent more expensive.

CICC analysts said in their report that 'liquid cake' has reached its golden era, as more shops are now selling a wide variety of yellow rice wine.

A growing number of shop owners are also applying for licenses to sell the wine. The Internet, where yellow rice winemakers have flagship stores, also saw a rise in revenue from booze.

With less than 20 percent alcohol, yellow rice wine is made from water, cereal grains such as rice, millet, sorghum, or wheat and a starter culture.

Yellow rice consumption is concentrated mostly in Shanghai and Zhejiang Province but other regions have also started to pick up, according to CICC.

As consumer tastes become more sophisticated, the volume of beer sales weakened while the expansion of wine slowed. But having a smaller base, the growth in yellow rice wine is faster.

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