The low-alcohol spirits segment has experienced rapid growth in recent years, with both revenue and sales volume maintaining a high growth rate, and its share of the overall alcoholic beverage market continuing to increase.
Industry observers note that low-alcohol spirits have become one of the more popular market segments in recent years. As younger consumers become increasingly receptive to beverages with lower alcohol content, the domestic market for such drinks has developed swiftly.
Today, major baijiu producers are actively expanding into low-alcohol products. However, over two decades ago, very few companies possessed the foresight to anticipate the development of this market.
It is widely known that the 38-degree Guojiao 1573 was officially launched in 2001, initially facing widespread skepticism within the baijiu industry. The prevailing view was that low-alcohol baijiu could not support a premium price point in the thousands of yuan, making it difficult to penetrate the core business and gifting markets, and was seen merely as a short-term industry gimmick. After more than twenty years of dedicated refinement, this single product achieved sales exceeding ten billion yuan in 2024, becoming the industry's first low-alcohol, high-end product to reach this milestone.
The industry's historically pessimistic view of a high-end, low-alcohol path likely stems from long-established consumption patterns in the domestic baijiu market. For a long time, the premium baijiu segment has been firmly dominated by 52-degree high-alcohol products, with consumer habits deeply entrenched. Examples like 52-degree Feitian Moutai, 52-degree Wuliangye Pu Wu, 52-degree Guojiao 1573, and 52-degree Jiannanchun Dongfanghong have long occupied price points above a thousand yuan and core business settings. Low-alcohol baijiu, in contrast, has mostly remained in the mass-market, affordable range, represented by products like 42-degree Fenjiu, 38-degree Yanghe, and 42-degree Jinshiyuan, clustered in the few-hundred-yuan price bracket, with almost no presence in the thousand-yuan tier.
Based on this market reality, industry concerns about premium low-alcohol baijiu have primarily focused on two levels. First, the alcohol-reduction process can easily alter the base liquor's flavor profile, potentially leading to a bland taste and lack of complexity. Second, within traditional business circles, 52-degree high-alcohol baijiu is seen as a symbol of status, sincerity, and ritual, with related consumption perceptions deeply ingrained.
Facing industry doubts, Luzhou Laojiao remained steadfast in its commitment to developing the premium low-alcohol segment. According to information from the company's official website and annual reports, Luzhou Laojiao has cumulatively invested over one billion yuan in this area. This funding has been used to construct a dedicated low-alcohol spirits technology park, invest in GMP-standard precision filtration and aroma-locking production lines, conduct specialized R&D on alcohol reduction, aroma retention, and flavor stabilization technologies, and support national-level research platforms, professional technical teams, and patent portfolios.
Beyond capital investment, Luzhou Laojiao leveraged the advantage of its 1573 National Treasure Cellar Pits to optimize the entire production process. This includes segmented liquor extraction, low-temperature alcohol reduction, and multi-stage blending, specifically addressing the industry-wide challenges of volatile aromas and bland taste in low-alcohol spirits. The company established a unique, end-to-end production system for low-alcohol liquor bodies, encompassing "segmented extraction - pottery jar aging - low-temperature filtration - multi-stage blending - acid-ester stabilization," achieving the goal of "low alcohol without blandness, reduced strength without compromised quality."
The breakthrough in product quality precisely aligns with the evolving trends in the consumer market. Reports from industry media in June 2025, citing macroeconomic data, indicated that China's potential young alcohol-consuming population is as high as 490 million, with the youth alcohol market valued at 400 billion yuan. Data from third-party platforms shows that consumers of low-alcohol beverages under the age of 40 account for 76.4% of the total, with those aged 18-26 making up 41%.
In response to this industry trend, Luzhou Laojiao made a clear assessment. In a September 2025 investor relations activity record, the company stated: "With the iteration of the baijiu consumer base, lower alcohol content is one of the future development trends of the industry. The current baijiu industry is transitioning towards 'quality enhancement, brand influence, cultural expression, and value creation.' Younger consumer groups tend to prefer personalized, low-alcohol, easy-to-drink, and self-indulgent alcoholic beverages, as well as 'light social' scenarios."
The impressive performance in key markets directly reflects the product's market competitiveness. From 2018 to 2025, the product's national terminal distribution coverage increased from less than 30% to over 90%, fully penetrating supermarkets, tobacco and liquor stores, high-end restaurants, and group purchase channels. This mature distribution network and operational model strongly support the product in maintaining its ten-billion-yuan sales scale.
Industry research indicates that in several key prefecture-level cities for alcohol consumption in Hebei province, sales of the low-alcohol Guojiao 1573 exceed 80% of the total Guojiao 1573 sales, reaching as high as 95% in some areas.
Company management has also corroborated the product's market performance. Zhang Liang, General Manager of Guojiao Sales Company, stated in a media interview: "Between 2015 and 2025, the 38-degree Guojiao 1573 achieved a compound annual growth rate in sales exceeding 30.28%, far surpassing the average growth rate of the premium baijiu segment. It has become the top-selling single product in the premium low-alcohol baijiu category in terms of open-bottle rate. Starting from 2024, the total brand sales of Guojiao 1573 exceeded 20 billion yuan, with the 38-degree single product contributing up to 50%."
Behind the strong growth of the 38-degree Guojiao 1573 lies a golden development period for the entire low-alcohol baijiu industry. Data from the China Alcoholic Drinks Association shows that from 2020 to 2024, the market size for low-alcohol baijiu grew from approximately 20 billion yuan to 57 billion yuan, with a compound annual growth rate of 25%, significantly higher than the overall baijiu industry growth during the same period. Over the past decade, the market capacity for the premium low-alcohol category has doubled, consumer acceptance has greatly increased, and the 38-degree Guojiao 1573 has built a deep brand mindshare barrier.
Simultaneously, the brand has been advancing its new retail layout and channel upgrades. According to Luzhou Laojiao's official new retail strategy, the brand has established experiential spaces integrating "light drinks, light meals, and light alcohol" in multiple cities across China through formats like "Baidiao Divano" and "Baidiao Bars." These efforts focus on covering young consumer scenarios in first- and second-tier cities, with the introduction of smaller bottle sizes and custom gift sets tailored to younger demographics. As of February 2025, brand outlets had expanded to over 20 provinces and 50 cities nationwide.
The construction of a digital system is poised to become a key direction for channel optimization. At the Luzhou Laojiao Annual Dealer Recognition and Marketing Conference held on March 22, 2026, the company announced its 2026 strategy as the "Year of Digital Implementation." This involves comprehensively promoting a "Five-Code Integration" full-chain traceability system to achieve traceable product flow, controllable terminal sales, and stable channel profits. The strategy also accelerates the "Hundred Cities, Thousand Counties, Ten Thousand Stores" channel refinement initiative, continuously optimizes the dealer system, and strengthens price and order control.
Looking back at its development journey, influenced by entrenched industry thinking, premium low-alcohol baijiu was long viewed with skepticism. However, the 38-degree Guojiao 1573, with its years of high growth, has demonstrated the immense potential of this segment. Currently, Luzhou Laojiao's 38-degree and 52-degree Guojiao 1573 form a complementary, dual-driver structure: the 52-degree version focuses on business gifting and collection, while the 38-degree version targets banquets, family, and the young consumer market.
Looking ahead, as trends towards healthier drinking, younger consumers, and brand internationalization deepen, and coupled with Luzhou Laojiao's long-term technological and production capacity reserves in the low-alcohol segment (including ample base liquor reserves and mature dedicated low-alcohol production capacity), the 38-degree Guojiao 1573, as a benchmark in premium low-alcohol baijiu, still possesses ample room for future growth.
Comments