The beverage alcohol market in China is in the midst of a structural reset as the decline of business-occasion drinking clears the way for a new consumer model: younger, more casual and more personal. For the drinks brands that understand this shift, meaningful growth opportunities still exist.
For most of the past two decades, the engine driving China’s beverage alcohol market has been banqueting and business entertainment. That’s been largely switched off, however, and is unlikely to return to its previous heights in the foreseeable future. Today, a new dynamic has taken its place, characterised by younger LDA consumers, casual social occasions, home consumption and the rapid rise of on-demand delivery.
According to IWSR analysis, 2026 will see a mixed performance for alcohol in China, with early indicators suggesting that some categories in the market might have bottomed out, while categories such as baijiu continue to decline and categories such as imported white spirits and RTDs continue to grow. For those businesses willing to track the new consumer reality – rather than wait for the old one to return – that means there are genuine windows of opportunity.
This comes after a challenging 2025 for the Chinese market, with total beverage alcohol (TBA) volumes falling by 4%, or by 2% excluding national spirits (baijiu). But this masks dynamic growth for some categories, such as white spirits, and signs of promise in whisk(e)y, white wine, premium beer and RTDs.
“After another difficult year in 2025, alcohol consumption in China is migrating away from obligation and gifting, and towards personal enjoyment, casual social occasions and value,” says IWSR‘s China research director, Shirley Zhu. “This shift is reshaping who is buying, what they’re buying, where they’re buying it and how much they’re willing to spend.
“Younger LDA consumers are embracing casual drinking, and remain largely absent from high-end wine and most premium brown spirits. Meanwhile, older drinkers are being more selective and cautious as business occasions have yet to return. Home consumption has started to grow across spirits and wine, alongside the expansion of smaller formats, on-demand delivery (O2O in China) and solo or small-group drinking.”
Right place, right time – The new occasion landscape
The shift away from business-oriented gifting and entertainment to personal enjoyment is manifesting itself in many different ways, transforming sales channels – across the on-and off-premise as well as in e-commerce – and creating dynamic growth opportunities such as at-home consumption and increasingly popular miniature formats.
“The on-trade has been going through significant changes, shifting from large, high-energy venues towards smaller bistros, cocktail bars, fusion restaurants and live houses (venues with live music),” notes Zhu. “However, business occasion dining, historically the engine of premium sales, has largely disappeared.”
In the off-premise, hypermarkets and supermarkets have declined as convenience stores (CVS) surge, driven by demand for smaller formats and miniatures. E-commerce – a staple of the Chinese drinks market – continues to grow as at-home consumption gains in significance.
“On-demand delivery is the standout growth driver, as consumers embrace instant retail from local stores as well as from small warehouses and delivery centres,” reports Zhu. “Popular orders include cold beer, white spirits with mixers and ice, or a bottle of wine or whisky.”
These changes mean brand owners need to devise channel strategies that take into account China’s new market infrastructure, not just its old one.
A clear opportunity – Imported white spirits
The increasingly important cocktail bar ecosystem and on-demand delivery are key distribution vehicles for white spirits, which provide the standout near-term growth opportunity in the Chinese market.
According to IWSR data, gin volumes in China leapt by 20% during 2025, and there were double-digit gains for vodka and rum too, albeit off relatively small bases.
“Gin is expanding across all price bands, while vodka’s growth is largely concentrated in standard-and- below, but with broad geographic reach,” reports Zhu. “Meanwhile, rum’s gains are led by white rum.
“All are benefitting from the increasing influence of cocktail culture, casual and home drinking occasions, and the penetration via all channels of lower-tier cities.”
Mixed momentum for whisk(e)y
The picture for whisk(e)y in China is uneven, but there are grounds for optimism, including lower-priced scotch, plus gains for American, Irish and Japanese whiskey, albeit off relatively small bases. Four months ago, import tariffs on whisk(e)y were cut from 10% to a provisional rate of 5%, giving the category a near-term structural advantage versus other international spirits.
Overall whisk(e)y volumes in China were up last year by 3%, according to IWSR data, with scotch down 1% and American whiskey up 5%. Japanese whisky and Irish whiskey outperformed the broader category by some distance, both with double-digit increases.
For scotch, entry-level blends gained ground on the growth of on-demand channels, while longer-aged products (18 years and above) continued to struggle. Value blended scotch volumes jumped by 41% off a small base, while the larger standard price tier was up 2% – the only two price segments to see increases.
“Scotch volumes were broadly flat last year, supported by resilience in standard blended scotch and entry-level malt scotch as consumers traded down,” explains Zhu. “High-end scotch, however, is going through an adjustment and will take some time to destock and recover.”
Japanese whisky’s outperformance was underpinned by genuine historical supply constraints and larger allocations in 2025, while American whiskey’s gains – coming despite trade tensions with Beijing – were built on the highball serve.
China’s domestic whisky industry is emerging as a notable market development, with a reported 50-plus distilleries now in operation. While the segment is in its embryonic stages, it is likely to increase broader category awareness, driving long-term consumption growth.
Wine looks to white and sparkling
Still wine continues to struggle in China, with volumes dropping by 19% in 2025, according to IWSR data, driven by an identical decline for red wine. White wine, which was down by 14% last year, now has a small but growing (9%) share of the market. Meanwhile, champagne volumes fell by 15% in 2025, but non-champagne sparkling wine edged up 1%.
“Red wine is currently suffering a structural decline in China thanks to its connection with gifting and business occasions,” says IWSR‘s Zhu. “There is no quick fix for this. But white wine is growing its share, with German riesling and New Zealand sauvignon blanc leading the way due to their lighter, more aromatic styles.
“Sparkling wine is gaining traction at hotel brunches and during casual daytime settings, and one of the most significant country-level wine opportunities could be South Africa: In May this year, import tariffs on South African wine were cut to zero.”
At the same time, China’s domestic wine producers have been investing heavily in quality production and winery tourism, with the latter serving as a useful tool for consumer engagement.
Format and flavour shape the future for beer and RTDs
Beer volumes in China declined by 2% in 2025, but a period of qualified premiumisation is continuing, with the category’s premium price tier rising by 7% and the standard-and-below price band declining by 2%.
On-demand cold beer is now a key battleground, while zero-sugar or low-calorie brews have an increasingly strong appeal for health-conscious drinkers. “Some consumers are upgrading their beer consumption from value to standard products,” explains Zhu. “While the premium segment grew, it was driven by brands offering big promotions.”
RTDs outperformed the declining TBA market last year with a flat performance, boosted by their affordability and breadth of choice. New drinkers are migrating across from beer and wine during casual drinking occasions, and a raft of innovations – from wine-based spritzers to tea-flavoured products and the use of regional ingredients – is helping to maintain interest.
China’s future – The long game
Looking to the future, and a number of challenges and opportunities will shape the future of the alcohol market in China. These include the moderation trend that has even penetrated baijiu, with some products now bottled at 40% ABV and below, rather than the traditional 50% ABV and above.
Meanwhile, the rise of China’s domestic whisky industry is both a competitive threat as emerging domestic products vie with imported brands, as well as a potential benefit as it raises awareness levels, helping to build the overall category with Chinese consumers.
The wine landscape is gradually shifting, with white and sparkling gaining traction. Opportunities, such as the removal of import tariffs for South African products, could help further progress these developments.
“The Government’s alcohol ban at official functions constitutes a continuing structural headwind for premium spirits in the on-premise, which will persist throughout the first half of 2026,” adds Zhu.
“Another defining challenge in the market is the recruitment of younger LDA consumers, who are largely absent from premium brown spirits and wine – hence continuous efforts from cognac producers to engage with a younger audience.”
The above analysis reflects data from IWSR’s 2026 data release. For more in-depth data and current analysis, head here to request a callback from IWSR.
