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In 2025, renowned baijiu companies are embracing the "lower-alcohol" trend. Wuliangye, Luzhou Laojiao, Shuijingfang, and others have announced R&D efforts or upcoming "low-alcohol new products." Luzhou Laojiao is pushing this to the extreme, developing products as low as 16% and 6% ABV. The pungency of high-proof baijiu may deter younger consumers, driving this collective shift. However, can focusing R&D on lower alcohol content solve the industry's key pain points: shrinking consumption scenarios, weakening social functions, and youth rejection of traditional flavors?

First, the baijiu industry faces shrinking consumption scenarios driven by economic changes. Banquet venues are crucial for baijiu sales, but the sector is now impacted by the catering industry's upheaval. Many traditional drinking occasions have significantly diminished or vanished. The catering industry itself is undergoing a transformation. High-end restaurants have drastically decreased, and mid-to-low-end establishments are also experiencing significant churn. Hongcan Big Data shows that in Shanghai, restaurants with an average per-person spend above 500 RMB fell from over 2,700 in May 2023 to about 1,800 fewer by April 2024.  By July 2024, the number had dropped by over 1,400, a decrease exceeding 50%. This directly reduces sales venues for premium baijiu, creating immense pressure. Industry insiders note that macroeconomic factors have made diners more rational and cautious, reducing per capita spending across catering segments and directly impacting baijiu sales in dining settings. Furthermore, "alcohol bans" have drastically cut official banquets, while business banquets lack momentum due to volatility in real estate and consumer sectors. Consequently, baijiu firms are trying to reconstruct consumption scenarios by integrating cultural elements, such as opening brand-specific "bars" to enhance atmosphere and cultural appeal, leveraging "China-chic" culture to attract consumers.

Second, the weakening functional role of baijiu is problematic. Traditionally strong in social settings (interpersonal networking, official/business banquets), baijiu's social attributes are now eroding due to generational gaps in consumption, declining official/business banquets, and new consumer culture. On one hand, "wine-toasting etiquette" ("酒場文化") embodies social hierarchy (e.g., juniors to seniors, subordinates to superiors), but the rising Gen Z equates this workplace ritual with "PUA," fostering aversion. "Alcohol bans" further weaken this workplace social function. On the other hand, traditional weddings are vital baijiu consumption and kinship-social occasions, but they are also severely impacted. Declining birth rates and trends towards later marriage and childbirth have significantly reduced wedding numbers. Civil Affairs Ministry data shows national marriage registrations fell to 6.106 million pairs in 2024 (down 1.574 million pairs, ~20.5% from 2023's 7.68 million). Compared to 2013's 13.469 million, registrations have more than halved. This directly affects baijiu sales for weddings, representing a loss of over half the sales opportunity in this single channel. Coupled with the reduced emphasis on baijiu as a wedding staple, the impact is severe.

Finally, young consumers' rejection of the traditional flavor undermines the consumer base. The generational shift in baijiu consumption is hampered by economic conditions, preferences, policies, and youth cultural attitudes, creating a gap. Key manifestations include Gen Z's lack of cultural identification with baijiu, rebellion against its inherent pungency, and aversion to the perceived "PUA" culture, leading to distancing. Industry experts attribute this partly to market diversification: while baijiu dominated early marketization, and beer was seasonal without direct competition, new categories like imported spirits and trendy low-alcohol drinks now offer diverse flavors and choices. Faced with more temptations, Gen Z finds it hard to maintain "loyalty" to baijiu.

Faced with these three pain points, can innovation focused solely on "lowering the alcohol content" solve all problems?