Report: French Dominance Of China’s Wine Market Set To Slip

By Jing Daily

Published: May 15, 2012

France Holds 48.8% Market Share Of Imported Wine Market

China's wealthy red wine lovers have turned to Domaine de la Romanée-Conti over the past year France, the long-time dominant force in China’s imported wine market, will see its iron grip on the industry slowly slip in the years ahead, as major exporters like Italy, Australia, the US, Spain and Chile chip away at the market and more adventurous Chinese drinkers start to look beyond the usual French red. That’s the latest finding from the “China High-End Red Wine Report” recently issued by Fortune Character magazine (财富品质), which this week announced that the already red-hot market will only continue growing, albeit at a more mellow pace. As researcher Yang Min (杨敏) said this week at the press conference, China’s wine industry maintained an average growth of 70 percent, with the share of imported wine accounting for around 25 percent of the total market. According to Yang, with imports expected to keep growing at a steady pace, imported wine should make up about 40 percent of the total domestic wine market in China within the next five years.

As chief researcher Zhou Ting (周婷) said, increasing diversification and more (and more regular) wine consumption among China’s middle class should see France’s domination of the high-end red wine market in China slip. Said Zhou, the trend in China is moving towards label and style diversification, with New World wines showing strong gains, adding that the premium that Chinese consumers currently put on major French winemakers will likely fade within the next three to five years.

According to Fortune Character‘s report, 43 percent of China’s wealthiest wine drinkers consume red wine more than twice a week, with 13 percent consuming it more than five times per week. Breaking down the study’s findings further, the wealthiest respondents in the study said they felt quality is guaranteed for wine priced above 500 yuan (US$79), adding that this is their conception of the boundary between “high-end” and “common” red wine. In terms of buying criteria, respondents listed label, year, and word-of-mouth as key drivers, with 33 percent saying they still buy premium wine at high-end wine stores and 16 percent saying they purchase wine directly from sources overseas. As for preferred wineries, the survey listed the top ten as Château Lafite Rothschild, Château Latour, Château Cheval Blanc, Pétrus, Domaine de la Romanée-Conti, Château Mouton Rothschild, Château Ausone, Opus One, Almaviva, and Penfolds.

Perhaps recognizing the importance of increasing the scope of Chinese drinkers’ understanding of the diversity of French wine-growing regions (and counterbalancing reputation concerns caused by the proliferation of counterfeit Lafite), France has invested heavily in efforts to introduce Chinese wine “newbies” to its sparkling wines, whites and rosés. As Jing Daily wrote earlier this month, the French Agriculture Ministry recently announced plans to launch a three-year campaign aimed at introducing Chinese wine drinkers to 400 types of wine from 12 regions all over France, among them Alsace, Beaujolais, Corse, Jura and Savoie, Languedoc Roussillon, Provence, Sud-Ouest, the Loire Valley (Jing Daily coverage) and Cotes du Rhone.

How Chinese learn to drink wine

They might have traveled to the world's best vineyards, but Chinese understanding of wine still has a long way to go

By Andrea Fenn 
China uncorks more than 1.2 billion bottles of wine every year. A great deal of them are expensive imported grapes, like French Bordeaux or Italian Barolo. And most importantly, the majority of drinkers are local Chinese.

Yet wine still remains a conundrum to even the most educated Chinese: obscure words describing exotic vines, mysterious tasting notes referring to uncommon comestibles (wine drinkers are challenged when it comes to finding licorice or blackberries in a local shop).

To rescue Chinese consumers in the epic journey discovering the world of wine, "Wine Connoisseur" is China’s first online wine education program. (Watch one episode here.)

Now in its second season, the Internet-only Mandarin program is produced by ASC Fine Wines, China’s biggest wine importer and House Films, a Sino-U.S. film production company.

Each episode of Wine Connoisseur features a conversation between Zorro -- representing the uneducated Chinese man at the bar who would like to know more about wine -- and Martin Hao (郝利文) -- the wine expert, ready to shed light on Zorro's doubts.

Topics range from the basics, like recognizing the differences between the taste of white and red, dry and sweet wines, to the most daring matters, like pairing Chinese food with wine.

The more you drink, the less you understand

Hao, who works as a wine teacher for ASC, says despite drinking more and more and having wider choice, consumers in China understand less and less about wine.

"Chinese are eager to learn about wine, but because there is much chaotic information online, they are still in need of reliable resources," says the 39-year-old Wine & Sprit Education Trust-certified educator.

At the same time, as wine entails words and concepts Chinese people often do not understand, teaching Chinese how to drink needs a lot of cultural mediation.

"Chinese don't understand when they read 'hints of blackcurrant leaf' in the tasting notes, because we don't have blackcurrant here," he says. "To teach people about wine, you have to speak their language."

Hao reckons most Chinese are still buying bottles to show off.

Buy to show off

While there is a small yet growing group of wine connoisseurs, Hao notes the bulk of wine consumers in China are still in the "bling" phase, buying bottles to show off to their business partners or as an ostentatious present.

And among the different grapes, they tend to prefer Bordeaux to other wines because of its perceived value.

"Bordeaux was the first entering the market, and it has become a brand for Chinese people," Hao points out. "When they are at the shop choosing wine, it is always the safest option."

Yet just like many people round the world, Chinese wine consumers often judge a wine by the label.

Market research shows Chinese drinkers do not particularly like plain white labels, but tend to prefer red backgrounds and golden writing, as the two colors are regarded as lucky, and suitable for the gift season.

Buy to socialize

Although red is the most suitable choice for presents, consumers often prefer to drink white, sparkling or fruity wines. One wine fan, Cici Cao, is particularly fond of easy-to-drink Pinot Gris over more structured reds.

Cao, who works for a food import company, has gotten into wine through her job. She especially recognizes the networking value of wine.

"Through wine and wine-related events, you can know people with similar interests and similar income," she notes.

To other consumers, though, wine comes as a totally new discovery.

Coco Wu, marketing manager at cosmetic company Shanghai Vive, says she loves wine because, just like cosmetics, it has several levels of aroma and complexity.

Wu, who like Cao is in her late 20s, finds wine a great topic for conversation among friends, although she admits not all her acquaintances are as knowledgeable about the matter.

"When I go out for dinner, I order several bottles to pair different foods," she says. "But no matter how good and different the wines I order, my friends still think they all taste the same. [It's] quite annoying."

Nevertheless, the stereotype of foreigners knowing more about wine than Chinese is about to lose ground.

At one of Hao’s wine tasting classes, all 20 or so Chinese students were able to tell a Northern Rhône Syrah from a Southern Australian Shiraz quickly and confidently in a blind tasting.

This writer, a boozy Italian, was the only one who got them wrong.

Read more: How Chinese learn to drink wine | CNNGo.com http://www.cnngo.com/shanghai/drink/how-chinese-learn-drink-wine-715327#ixzz1cV6yEoxu

Forty Napa Valley Vintners Head to China for Trade Mission

Promoting Napa Valley and its Wines to Important, Emerging Export Market

4/20/2011 - St Helena, CA--The Napa Valley Vintners (NVV), the 67-year-old non-profit trade association charged with promoting and protecting America's most renowned wine growing region will once again lead a multi-faceted, week-long trade mission to the People's Republic of China beginning April 25 with stops in both Shanghai and Beijing. 

"This will be our eighth official visit to China and Hong Kong since 1998 and this year we have vintners from 40 Napa Valley wineries, the most robust participation in this market to date," said NVV Executive Director Linda Reiff.

"China is an incredibly strategic market from a number of perspectives, including its steadily growing economy that finds more and more of its people with income to purchase fine wines from around the world. For this reason, it's important for Napa Valley wineries to be in the market and on the world stage representing the best from the United States."

Some 40 vintners will meet with wine trade, media, targeted consumers and political leaders at a variety of tasting venues in both cities throughout the week. Exposing these key audiences to the innovative, quality-driven wines of Napa Valley, educating on the unique attributes of the appellation and meeting the people behind these iconic brands will be top of the agenda as vintners look to open trade or enhance their shares in the import market. 

Creating and reinforcing positive relations with key importers is critical to the success of the market. Ensuring a proper "route to market," whereby product is shipped, warehoused and transported in-market with appropriate handling at proper temperature that is vital, and integral to expanding the export of wine from Napa Valley to China.

Reiff continued, "We use these market visits as an opportunity to work on important industry issues as well. In China we have been working diligently with the Chinese government to protect the Napa name in wine branding. As we do around the world, in China we have had issues with some of their domestic wine brands using the name Napa on wine labels. As consumers become more savvy, more aware of world wines, their demand for truth in wine labeling is coming to light--just as it has in the U.S., as consumers understand the distinction of wine place names of origin."

"It is critical from our perspective that wine brands, no matter where they originate, if not from Napa Valley, should never lead a consumer to believe the wine in that bottle is from this unique California wine region. As we build our appellation's presence in China, we must work on trademark protection of our region and its wines. Through trade and consumer education and awareness and working with government leaders and influencers we hope to set a solid foundation for Napa Valley wines as the market expands going forward," said Reiff.

Working the market will be vintners from, Amuse Bouche Winery; Cakebread Cellars; Coup De Foudre Winery; Cuvaison Estate Wines; Dalle Valle Vineyards; Duckhorn Vineyards; Franciscan Estate; Grgich Hills Estate; HALL; Heitz Wine Cellars; Helena View Johnston Vineyards; Hestan Vineyards; Honig Vineyard and Winery; Howell at the Moon; John Anthony Vineyards; Jones Family Vineyards; Larkin Wines; Long Meadow Ranch; Luna Vineyards; Miner Family Wines; Moone-Tsai Vineyards; Peju, Realm Cellars; Robert Mondavi Winery; Rocca Family Vineyards, Rubicon Estate; Saintsbury; Salvestrin; Schramsberg Vineyards; Signorello Estate; Silver Oak Cellars; Silverado Vineyards; St Supery Vineyards and Winery; Somerston; Stag's Leap Wine Cellars; Viader Vineyards and Winery; and Waterstone.

The Napa Valley Vintners is the non-profit trade association responsible for promoting and protecting the Napa Valley appellation as the premier winegrowing region. From seven founding members in 1944, today the association represents 400 Napa Valley wineries and collectively is a leader in the world-wide wine industry. To learn more about our region and its legendary American wines, visit www.napavintners.com.

http://www.napavintners.com/trade/tm_3_release_detail.asp?ID_News=3221273

Decanter: HK Wine Imports to hit US$1BN

According to the Hong Kong Trade Development Council, imports reached US$856m in the January to August period – only just short of the total for the whole of 2010.

France heads the list of exporting countries with revenues of more than US$330m so far this year.

But total imports of French wine are likely to be significantly higher than this figure: the UK, Switzerland and Singapore also feature in the top six wine exporters to Hong Kong, reflecting the trading of third party wines through these countries.

The growth continues the trend of soaring imports into Hong Kong, which has established itself as Asia’s prime wine trading hub since the government axed excise duty on wine and beer in 2008.

http://www.decanter.com/news/wine-news/529460/hong-kong-wine-imports-to-hit-us-1bn

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