© Reuters. An advertisement promoting a Kweichow Moutai liquor latte is seen at a Luckin Coffee store in Beijing, China, September 4, 2023. REUTERS/Florence Lo
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By Sophie Yu and Brenda Goh
BEIJING (Reuters) -Kweichow Moutai and coffee brand Luckin Coffee (OTC:) on Monday launched in China a latte advertised as containing the fiery Chinese spirit baijiu, as the Chinese luxury liquor maker aims to pull in younger consumers.
The 38 yuan ($5.23) “sauce-flavoured latte”, which Luckin discounted to 19 yuan on the first day of sales, was one of the most discussed topics on Chinese social media platform Weibo (NASDAQ:), with several users saying they had placed orders.
Moutai, known as the national liquor of China, is a potent, colourless spirit that is usually served at banquets in China, and drinkers say that the flavour and aroma of Kweichow Moutai’s version are similar to soy sauce. The companies said the latte alcohol content was lower than 0.5% of its volume.
The launch comes amid a slowing economy and as Kweichow Moutai, whose alcohol sells at an average market guide price of 1,499 yuan, has been looking for ways to be more accessible and pull in a new generation of users. The company, based in China’s southwestern Guizhou province, also launched a baijiu-infused ice cream last year.
Chinese social media users posted videos of themselves picking up cups of the drink and being told by sales staff that they should not drive after drinking it. By Monday afternoon in Beijing and Shanghai, Luckin’s app showed that the drink had sold out at several stores.
Independent food industry analyst Zhu Danpeng said the collaboration would most likely benefit both brands.
“Moutai and Luckin are the leading enterprises in the domestic liquor and coffee sectors, respectively,” Zhu said. “On the one hand, Moutai accelerates its brand rejuvenation through cooperation with Luckin and on the other hand, for Luckin, its cooperation with Moutai also helps to improve its comprehensive strength and brand tone in the coffee industry.”
Luckin has been aggressively expanding its store portfolio in China after surviving an accounting fraud scandal in 2020 that forced it to withdraw from the Nasdaq exchange and brought it to the brink of collapse.
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