In 2022, the production and sales of Chinese tonic wine reached 5,896,000 and 5,893,000 hls respectively. The average price increased to RMB 0.61/hl in 2022. The value of China’s tonic wine market reached RMB 35.678 billion, of which medium and high-end accounted for about 49.10%, and low-end for about 50.90%.

Overview

Tonic wine is part of traditional Chinese medicine (TCM). It is prepared by soaking Chinese herbal medicines in distilled liquor, rice wine or other alcoholic beverages to extract the active ingredients of the herbs. Tonic wine is commonly used in TCM to treat specific diseases or symptoms, or for strengthening the health and immune system of the body. The preparation method and composition of tonic wine varies according to different formulas and uses. TCM generally divides tonic wine into nourishing tonic wine, blood circulation and stasis tonic wine, anti-rheumatic tonic wine and aphrodisiac tonic wine.

Zhangyu’s Three Wip Wine

Industry

China’s tonic wine industry has experienced a development process from traditional to modern, gradually moving towards the international market. Chinese tonic wine is becoming more and more popular in overseas Chinese communities and people interested in TCM. At the same time, the Chinese government has strengthened the supervision of the tonic wine industry by introducing relevant regulations and standards to ensure product quality and safety.

The value chain of tonic wine includes Chinese medicinal materials, liquor, rice wine, etc. China’s TCM materials and liquor production have a long history. Both belong to China’s traditional industries. In 2022, China’s TCM materials production reached 5.21 million mt and liquor production completed 67.12 mln hls.

The competitive landscape

Well known brands in the China’s tonic wine industry include: Zhangyu three whip wine (whip refers to an animal’s penis, the main ingredient of aphrodisiac wines), Guling Shenjiu, deer whip wine, Tongrentang, Ningxia Xiangshan Goji Wine, Zhizhonghe, Golden Wine. On the whole, the market concentration of China’s tonic wine industry is low, with a large number of small players.

Guling Shenjiu

Development

Tonic wine originates from the oriental TCM culture. Therefore, so far, the Asia is still the world’s largest tonic wine production and sales area. The Asia-Pacific tonic wine market accounts for more than 85% of the global market. However, with the continuous integration of Eastern and Western cultures, tonic wine is gradually accepted by Western countries. In recent years, the global tonic wine industry has developed rapidly. In 2021, the global tonic wine industry market size exceeded USD 6 billion, and it is expected to exceed USD 7.3 billion in 2023.

Peter Peverelli is active in and with China since 1975 and regularly travels to the remotest corners of that vast nation. He is a co-author of a major book introducing the cultural drivers behind China’s economic success