A Case Study for

An American Whiskey Distillery in China

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Client Profile

Our client, a small American distillery was already selling its premium whiskey in the North American markets. The distillery understood demand for high-quality foreign liquors was increasing in China. So, they approached us because they wanted help expanding into the Chinese market.

Client Challenge

The American distillery produced high-quality bourbon, but they were not sure if it would sell well in China, which local markets they should focus on first (e.g. Guangzhou), or how they could compete on price and be able to navigate through local regulatory requirements. They also needed help finding the right distributors for their whiskey.

Our Solution

Step-by-Step
Process

How We Did it

Assessing competition in the market

We analyzed competition in the market based on their target price range and competition for bourbon. We concluded there was a good opportunity in the market for it.

Identifying the best local markets for their whiskey

We carried out a target market analysis, examining all 42 local markets in China. Our team applied several key quantitative metrics to identify the best markets for our client’s whiskey. The analysis also included a detailed target consumer profile, including demographic information and buying habits.

Evaluating market pricing and strategy

We looked at average pricing for each style of beer nationally and in each local market identified in the target market analysis. Additionally, we compared pricing to their target consumer’s ‘willingness to pay’. Our evaluation made it clear how competitive our client’s prices were and the best strategy for them to follow in China.

Finding good distributors

We compiled a focused list of distributors who met our client’s needs, had expressed interest in the beers, and had strong distribution networks in the local markets we were interested in (e.g. Guangzhou).

Carrying out due diligence

Once our client chose a few distributors they were interested in speaking to, we carried out due diligence on each distributor to confirm capabilities and assess risk. Our team delivered a detailed assessment, including information about each distributor’s licenses, operations, and other key information, as well as a risk assessment.

Negotiating and signing a good contract

Our client chose a distributor they most wanted to work with based on our due diligence assessment and recommendations. We then supported them through the entire negotiation process through contract signing, solving any challenges along the way.

Arranging for import and sales

We worked with both our client and the distributor to ensure the product met local regulatory requirements and were imported into China and ready to be sold without any problems.

Outcome

Working with Mersol & Luo, our client was able to achieve its goals of:

Determining whether or not to sell products to China

Understanding the competition they faced in the market

Identifying the best local markets to focus on first (e.g. Shanghai)

Knowing how they could be competitive on price

Finding good distributors

Confirming the capabilities and trustworthiness of distributors

Negotiating a fair contract with their distributor

Meeting local regulations for their products

Importing and selling their products in China

Conclusion

China is a large and complex market. We took the mystery out of selling in the Chinese market, saving them time, money, and headache. This allowed our client to focus on what they cared about most: making and selling great whiskey!

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