Baijiu, a traditional Chinese liquor, is not just a drink, but a cultural phenomenon. And it is also a financial giant in the global liquor industry.

The global baijiu market was worth about $167 billion in 2023, according to London-based market research firm Euromonitor. And baijiu producer Kweichow Moutai was valued at about $87.52 billion in 2023, according to Kantar, compared to Budweiser at just $12.96 billion.

Often described as the most consumed or popular spirit in the world, baijiu is more than just a drink. In China, it is a symbol of hospitality and social cohesion.

“The role of alcohol in Chinese culture goes far beyond aesthetic harmony,” says Derek Sandhaus, co-founder of Ming River Baijiu. “Alcohol served a ritual purpose in China from early prehistory, when it was used to create connections between people and spirits. People made alcoholic offerings to gods and later to table companions to show respect and strengthen social bonds.”

Baijiu plays a central role in traditional Chinese banquets and celebrations, where it is often drunk during toasts and ceremonies. Drinking baijiu is deeply rooted in Chinese etiquette, where it is customary to toast one’s guests or elders as a sign of respect.

“In China, intoxication is viewed with more ambivalence than in Western cultures. When meeting with friends and family, it is important that everyone honors each other with toasts and drinks together. This is especially true on major holidays or festivals,” explains Sandhaus. “In this context, drunkenness is not a lack of restraint, but a sometimes chaotic byproduct of a necessary social function.”

Baijiu is also a common sight at important occasions such as business meetings. Its role in promoting camaraderie and goodwill cannot be overstated, as it is believed to bring people closer together through shared experiences and mutual respect.

“There is a Chinese proverb that roughly translates to: ‘Without alcohol, it is not a meal,'” says Sandhaus. “In China, food and drink are necessary components of a cuisine that complement each other with complementary flavors and round out the culinary experience.”

A short history

Baijiu, which means “white spirit” in English, has a tradition that goes back over a thousand years. The first confirmed picture of a Chinese still dates back to the 19th century, and the first Baijiu production manual was not written until 1959.

“Very little is known about how baijiu was made in pre-modern times, but there are some things we can definitely say about how its production has changed over the last century,” says Sandhaus. “Production equipment, particularly the Chinese still, improved in quality and yield. Blending and resting became standard practice. As experts studied different regional baijiu varieties, they developed a classification system and new production techniques.”

In modern times, baijiu production has become more streamlined and efficient, resulting in higher quality and a more diverse output. While the basic techniques that define the category—wild microorganic fermentation, solid-state fermentation, and distillation—have remained largely unchanged, our understanding of these processes has deepened.

Consumption habits have also changed dramatically over the last century and, to a lesser extent, the last decade. “In Chinese history, most alcohol consumption consisted of unfermented rice and millet-based beverages that were too expensive for ordinary people to drink regularly,” notes Sandhaus.

Archaeological evidence suggests that the Chinese have been consuming alcohol for about nine thousand years. They first used it in religious rituals as offerings to gods and spirits, and later as a means of showing respect and strengthening bonds of family and friendship. Elaborate rules developed around alcohol, governing everything from seating arrangements to pouring and toasting.

“Baijiu has long been associated with Chinese rural people and workers, and after the communist revolution in 1949, proletarian baijiu surpassed rice wine in prestige and popularity,” says Sandhaus. “After the reintroduction of the free market economy in the 1980s, most people could afford to drink baijiu whenever they wanted, and the usual social problems associated with excessive consumption arose.”

Baijiu was not available for export in most countries until the 1980s, and Chinese distilleries mainly target local consumers who are already familiar with the drink. As a result, says Sandhaus, most of the world’s baijiu is still consumed only in China.

“Even if a drinker wants to try it outside of China, they have little to no choice at most Western retailers,” says Sandhaus. “That presents a huge educational hurdle for any baijiu brand to overcome in the global market. You not only have to build a brand, you also have to launch an entire beverage category.”

In addition, baijiu is a nuanced category with more than a dozen distinct styles that can differ radically in terms of production techniques and flavor. Progress has been made in introducing baijiu to new markets.

There are newer brands and entrepreneurs – including the team at Ming River – who believe baijiu can carve out a place for itself outside of China. Sandhaus says his team is committed to educating consumers and alcohol industry professionals one glass at a time. And since the company was founded in 2017, Ming River has expanded from two states and two countries to over 35 states and 15 countries.

The distillation process

Solid fermentation and distillation are the defining techniques of Baijiu production.

“About 5,000 years ago, the Chinese probably developed something called qu by accident,” explains Sandhaus. Put simply, qu is grain that is mixed with water, formed into clumps, and allowed to decompose naturally in a controlled environment. Over the course of days or weeks, the airborne microorganisms – mold, yeast, and bacteria – form inside and outside the qu. It is then dried to stop the chemical processes and ground into a powder for use.

“It may look like you just spoiled some grain, but in reality you’ve created the perfect alcohol starter,” says Sandhaus.

When qu is mixed with fresh, steamed grain (usually sorghum, but any grain will do), the mold breaks down the grain’s starch into sugar (saccharification) while the yeast converts that sugar into alcohol (fermentation). In most Western grain alcohols, such as beer and whiskey, the saccharification and fermentation take place separately and in a liquid state, which is what makes baijiu distinctive. Meanwhile, the bacteria in the qu mix with the alcohol to form the esters and aldehydes that give baijiu its unique funky, fruity and floral flavor. Because qu harvests microorganisms from the air, the flavor of a particular baijiu depends entirely on the microclimate in the distillery, giving baijiu a characteristic similar to the winemaking term of terroir.

At this point, you have a solid, fermented grain mash. To extract the alcohol, the Chinese use a large still that works similarly to a dim sum or vegetable steamer. The kettle has a slotted bottom that holds the solid mash and is placed over boiling water. As the steam passes through the fermented mash, the alcohol evaporates and begins to rise from the surface of the mash. The steam is captured, passed into a condenser, and cooled back down to a crystal clear liquid that is usually about 35 to 65 percent alcohol by volume, and the end result is called baijiu.

Taste profiles

Baijiu’s flavor profile can be a surprise to the uninitiated. It is known for its strong aroma and complex flavor, which can range from fruity and floral to earthy and savory.

“Geographically, China is as big as continental Europe, and baijiu – actually just a synonym for all traditional Chinese spirits – is just as diverse as Western spirits. Some are more accessible, like the mild rice-flavored baijiu and the fruity, strong-flavored baijiu, and some are more for connoisseurs, like the umami-rich sauce-flavored baijiu,” says Sandhaus. “But each variety has something to offer, there are thousands of distilleries in China, and I think there is a baijiu that almost every drinker will enjoy.”

This variety of flavors can be divided into several different aroma types. The following four are the most notable:

Sauce aroma (Jiāngxiāng): Characterized by a rich umami flavor with notes like soy sauce. Moutai, perhaps the most famous baijiu brand, falls into this category.

Strong aroma (Nóngxiāng): Known for its bold, sweet and floral profile, this variety is popular in Sichuan Province. Ming River works with China’s oldest distillery, Luzhou Laojiao, which has been in continuous operation since 1573, and maintains traditional methods to produce strong-flavored baijiu.

Light aroma (Qīngxiāng): Offers a finer and purer flavor often associated with northern China.

Rice flavor (Mǐxiāng): Mild and slightly sweet, this variety is reminiscent of sake and is widespread in southern China.

The strong and unusual taste of Baijiu can be challenging for those unfamiliar with it. However, with increasing globalization and intercultural exchange, Baijiu has the opportunity to carve out a niche in the international market.

Sandhaus’ advice to someone trying Baijiu for the first time? “Drink deeply and deeply.”