The Science of Getting Sloshed

Source: The Wall Street Journal By Jason Chow

Tucked away in a far corner of Hong Kongs Sha Tin district is the Asian party scenes biggest power player. At least, it hopes to be.

There in Science Park, a team of workers in a lab owned by Diageo, the worlds largest producer of acoholic spirits, is mixing chemicals, flavors and liquors to create the next big tipple.

Id like to think I have the best job, said Chris Armes, who holds the dry title of innovation technical director Asia Pacific.

An engineer by training, Mr. Armes started the Hong Kong lab in 2005 and has created popular drinks such as Highball (a bourbon-and-soda mix sold in a single-serving can), Smirnoff Cranberry (a flavored vodka) and Windsor Premier (a blended Scotch whisky thats South Koreas biggest seller in the category).

The company, which is based in London and owns some of the worlds best-known brands, including Johnnie Walker, Guinness, Smirnoff and Tanqueray, is looking for growth outside the stagnant mature markets of the West. Its target: Asia. And in addition to selling its existing brands, Diageo wants to develop new ones, too.

In January it announced a partnership deal with Halico, Vietnams largest distiller, to develop new products. And last year the company made a $1.1 billion bid to buy Chinese baijiu-maker Shui Jing Fang, a deal still awaiting regulators approval.

Of course, Diageo isnt the only one moving into Asia: Japanese beverage conglomerate Suntory is expanding aggressively in the region, as i! s French liquor giant Pernod Ricard both have pointed to emerging economies as leading regions of growth.

Diageo is homing in on 40-something rich men who want luxury that spells status, pedigree and heritage. Its a demographic that Apurvi Sheth, the companys Asia Pacific innovation director, calls the progressives. Progressives want a new luxury, said Ms. Sheth. They dont want bling, not gold. When theyre buying into luxury, theyre buying into stories.

For Diageo, that means creating products like the recently launched Johnnie Walker XR21, a blend made from an old formula that calls for 21-year-old scotch, and the relaunched Windsor scotch, which was tailored to South Korean palates (its slightly sweet) and traditions (the bottle is designed for pouring your companions drinks, in keeping with Korean custom).

Then theres Shanghai White, perhaps the most innovative take on Asian drinking culture. The vodka, launched in 2009, was the product of a joint venture involving Diageo Mr. Armes and his team and the distillers at Shui Jing Fang in Chengdu. Shanghai White was specifically designed for Chinese palates and distilled using techniques similar to those for baijiu, the Chinese spirit that Shui Jing Fang is famous for.

The liquor has been released only in Hong Kong, but the company said it will be rolled out in China and possibly the rest of the world sometime in the future.

Shanghai White is something Mr. Armes said hes really proud of. Weve taken two views, East and West, and put it in this product. My Chinese friends like it; my Western friends like it.