(Yicai) Sept. 4 -- Kweichow Moutai and Luckin Coffee have launched a co-branded latte-like coffee drink that has a slight baijiu aftertaste, as the Chinese liquor giant takes another step in its quest for more young consumers.

The new drink appealed to many customers today, as it debuted in Luckin Coffee’s stores. Priced at CNY19 (USD2.60) per cup, it contains coffee, thick milk, and an alcohol content of less than 0.5 percent. The liquor is Feitian Kweichow Moutai, the firm’s most popular spirit in China.

The coffee chain is also offering stickers and paper cup covers in the brand colors of Kweichow Moutai, but none of the liquor maker’s other products are being sold at Luckin Coffee's outlets.

According to industry insiders, distillers are eager to break the boundaries because of a fear of losing young consumers. Alcohol consumption in China is rapidly diversifying, and liquor is no longer the first choice of younger people, they added.

Only 11.2 percent of young adults prefer drinks with an alcohol content of more than 30 percent, according to a report by Ries Positioning Pioneers. Liquor also accounts for just 13 percent of the group's preferred tipple, behind wine, fruit wine, whiskey, and beer.

Kweichow Moutai’s net profit margin was 54 percent in the first half of this year, while that of Luckin Coffee was only 16 percent last quarter. Kweichow Moutai values the roaster’s popularity and aims to expand its brand influence among young consumers via the cooperation and reach new younger liquor drinkers.

Co-branding has become a trend in China. Kweichow Moutai launched Moutai ice cream with Mengniu Dairy last year and brought out a number coffee products with Moutai Feitian Baijiu at its ice cream parlors in Guangzhou this year.

Moutai ice cream is not simply consumer goods but a strategic product for promoting the rejuvenation and trendiness of the Zunyi-based firm's brand, Chairman Ding Xiongjun said at its annual market work conference earlier this year. “To seize young people is to seize the future of Kweichow Moutai,” he said.

Editor: Martin Kadiev