1,000-yr Chinese liquor wants to be the new tequila

Baijiu's stomach burning potency being diluted using fruits and ginseng

The fiery Chinese grain liquor called baijiu has been distilled and quaffed in the homeland pretty much the same way for a millennium. Yet as these brands expand overseas, spirits companies are wondering: How would it taste with 7-Up?

Makers of the 106-proof alcohol that's popular at wedding receptions and government banquets are coping with a steep revenue drop after President Xi Jinping ordered public servants to cut their expense tabs. Sales declined 13 per cent, and store prices plunged by half.

With less than one per cent of baijiu consumed abroad, Chinese distillers now want to transform the liquor into "the new tequila" for Americans and Europeans. So they're diluting its stomach-burning potency, hiring mixologists to experiment with ginseng and tropical fruits, and promoting the concoctions at bars in New York, London, Sydney - even at Walt Disney World.

"We want to see baijiu have its moment in the world," said Tony Tian, commercial director of Diageo Plc's China White Spirits unit, which includes the high-end Shuijingfang brand. "Tequila had it, vodka had it. Why not baijiu?"

Venerable brands like Shuijingfang, less-expensive offerings such as Beijing Red Star Co and start-ups such as ByeJoe and HKB are searching for the right ingredients that will do for baijiu what the margarita did for tequila. They're trying grapefruit juice, Angostura bitters and brown sugar to mask a pungency considered on par with the durian fruit popular in South-East Asia.

They're also lowering the liquor's alcohol content to make it more akin to the 80-proof spirits favoured by Westerners, infusing bottles with flavourings and promoting the antioxidant powers of the main ingredient sorghum. The makers have nothing to lose and everything to gain, since exports made up just 0.1 per cent of baijiu sales last year, according to statistics from London-based International Wine and Spirit Research.

"Baijiu is not a spirit you can just pour into a martini glass and grow an appreciation for its taste immediately," said Orson Salicetti, co-founder of the Lumos bar in New York that serves about 40 different brands. "The trick to appreciating baijiu is embracing its unfamiliar flavour in cocktails."

Varieties of baijiu, or "white liquor," are made from sorghum, rice, wheat or corn, and can contain as much as 53 per cent alcohol by volume. About 5.5 billion litres, or 1.5 billion gallons, were sold last year, according to London-based Euromonitor International.

Industry revenue last year was 766 billion yuan ($115 billion), compared with a peak of 882 billion yuan in 2012, when government officials were propping up demand and prices for top-shelf brands like Shuijingfang and Kweichow Moutai by gifting bottles or throwing boozy banquets. Xi's edict ended that party.

"Baijiu must change, transform and explore," said Song Shuyu, director of the China Alcoholic Drinks Association, a government oversight and promotion body.

Baijiu is traditionally imbibed in extra-small shot glasses during big, celebratory meals.