A Non-Alcoholic Baijiu Enters The Fray
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Lyre’s, the world’s most valuable non-alcoholic spirits brand, is betting on the Chinese market with the launch of a sans-alc baijiu. It’s the world’s first non-alcoholic baijiu.

Baijiu is a massive category in China. Technically, it’s the world’s most consumed spirit, accounting 23% of all spirits consumed globally each year/Baijiu distiller Kweichow Moutai passed Diageo as the world’s biggest liquor maker in 2017, valued at $373 billion as of October 2021.

But consumption is largely limited by geography — local consumption of Baijiu in China represents 99% of the world’s sales of the spirit.

“Baijiu sales represent almost one-quarter of all spirits sold globally each year, with over five billion liters being consumed in China annually, and yet, until our launch, there has been no non-alcoholic Baijiu in existence,” said Mark Livings, Lyre’s Co-Founder and CEO.

“With such an extraordinarily large market and no one attempting this, and given our success with other variations in the range, we felt that baijiu could be something Lyre’s delivers for China,” Livings continues. “We’ve been in the Chinese market now for close to two years, at around 200 points of distributions including top bars. We’re hoping the Chinese public and consumer sees some merit and interest in the product, find our products drinkable and delicious and drive some pretty significant volumes for us in the region.”

Lyre’s has been working for over two years to reproduce the essence of Baijiu in spirit form. “We’ve found the Chinese consumer is equally as receptive to this category as is the Western consumer — health, mindfulness, and wellbeing are transcending international borders,” says Livings.

The spirit-free baijiu is now available at The Ritz Carlton Shanghai, EDITION Hotels’ Chinese locations, and Hope & Sesame — Asia’s 15th best bar.

While Lyre’s has been producing spirit-free whiskeys and non-alcoholic gins for years, Baijiu is a very specific spirit. “Baijiu is very interesting because it’s not consumed in the same session as other spirits within China,” says Livings. “Baijiu calls for a really different consumption occasion to the cocktail or the drinking needs of the home occasion. It’s a drink of celebration. Baijiu is almost always consumed with food. We found that most consumption happens during celebrations: weddings, birthdays, national holidays, business dinners, and conferences. There’s typically a bottle of baijiu on every table and it’s enjoyed throughout the evening with multiple toasts.”

“For us,” continues Livings, “we observed that at every one of those tables, there’s one, two, or three people that are sitting out drinking, whether that’s driving, for health reasons, or medical or performance reasons. We wanted to give them an alternative by positioning our marketing to be included in that occasion.” Lyre’s is a celebratory option for those who don’t want to keep up with the drinking crowd.

The announcement comes on the heels of a big year for Lyre’s. Back in November, Lyre’s earned a $360 million valuation, which brought major funding from D Squared Capital and Morgan Creek Capital Management, an early investor in Drizly, AliBaba, and SpaceX.

With this valuation, Lyre’s now sits as the most valuable no- and low-alcohol spirits brand in the world.

While many of Lyre’s peers focus on replicating bar well staples: gins, rums, vodkas, and the like, Lyre’s reconsiders the full back bar, crafting no-ABV options of a full portfolio of spirits, from sweet vermouths to Campari riffs to alcohol-free absinthes. Currently, the portfolio spans 14 different products, including gins, bourbon-style bottles, triple sec, white rum, amaretto and coffee liqueurs. Rather than dealcoholize these liquids, Lyre’s “analyzes what’s in the liquid, then rebuilding that molecule by molecule using natural essences and extracts, then distilling it and adding a sprinkle of beverage technology,” says Livings.

Lyre’s seemed to step into the NA space at the right moment. In the last year, global off-premise sales have skyrocketed, hitting $3.1 billion across low-alcoholic and non-alcoholic categories. This is a jump from the category’s $291 million in off-premise sales the year prior.

The NA market is still small — less than 5% of household penetration — but non-alcs are outpacing the growth of low-alcs, according to NielsenIQ’s SVP of Account Development Kim Cox. NA sales totaled $331 million (up +33.2%) in the last year, while low-alcohol sales rose 8.1% to $2.77 billion. Brands saw a 315% increase in low- and no-alc beverage dollar sales.

What’s next for the brand? “We’re looking at things like amaro for central Europe, or pisco — that’s an incredibly important spirit,” says Livings. “We will never stop innovating or improving our products, and we’re on the hunt for categories we think people will love as well.”

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