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CHINA UPDATE

Friday, July 28, 2017

Today, (unlike in 2003 when colleagues laughed at me for suggesting that China was the “next big thing”) everybody is aware of the massive and growing wine market that is China. But what does it really mean?

Firstly, you have to understand that China having gone from no personal possessions to amazing riches and personal wealth in the span of 50 years is like no other wine market in the world. It is unique and has massive potential if properly understood and if the right partners are found out of the thousands of “wannabes”.

There are some emerging trends which have been identified by: a number of recent studies of the Chinese market, by anecdotal information supplied by Aussies involved in this market, as well as some common sense observations, i.e. “it’s not rocket science”. So consider this:

1:  It is estimated that there has been an increase of around 50 million wine drinkers in China over the last five years. Thus whilst China’s wine production has been growing significantly the volume of imported wine has also grown significantly, and will continue to grow unless China’s economy crash dives.

2: This growth in imported wine consumption is being driven by younger adults joining the ‘middle-classes’ and adopting the ‘western life-style’ which includes owning an imported car and drinking imported wine. It is estimated that nearly half of wine drinkers in China fall into this class of new wine drinkers.

3: Wine has gone from being used as a gift giving item, to a point where over half of the current wine drinkers perceive wine as either being good for their health or as a part of relaxing from the pressures of work.

4: Despite all the claims that China is a red wine drinking market, white wines in general are more compatible with most of their varied cuisine, other than the spiciest of dishes such as those from Szechuan, or the oiliest, such as those from Tibet. White wine sales as a percentage of total wine sales has been rising over the last decade as the younger people come to realise the suitability of white wine to accompany their cuisine. The trend is towards the more aromatic of white wines.

5: From a very small base, the sales of sparkling wines has shown a continuous, inexorable increase as the consumer base broadens. It is still basically a celebratory drink at this stage, but I believe it will become more mainstream over the next few years as it has done in many markets as they became more sophisticated.

6: For many years there has been the perception in parts of the wine industry that the Chinese like sweeter style red wines. This is not the case. They much prefer fruit driven wines which have soft, gentle tannins, or even have no noticeable tannins on the finish. In other words, they want smooth, flavoursome wines which are well and truly ready to drink when they are sold.

7: Thanks mainly to Australia and New Zealand, the Chinese are becoming much more accepting of screwcaps than they used to be. A decade ago they would only accept screwcap wines at a considerable discount to the same wine under cork. Over time as they have started to learn of the benefits of screwcaps over cork, their perception has begun to change, so that today it is only in the most prestigious wine categories that they want/insist on corks. Sure, most importers/distributors still ask for cork, because it makes their sales process easier given the level of wine education of their market place. However, a growing number will accept screwcaps if cork is not offered as an option.

As far as consumers go, a growing proportion have come to accept screwcaps for their leisure and informal occasion wine consumption and only insist on cork for formal occasions and gift giving – Yes, it still occurs despite the government crackdown. Although not so much for bribery and more as a thank you/special occasion present.

8: China is a huge market and far from homogenous, as many winemakers think it is. The tastes/flavour profiles of drinkers varies widely across this massive market, as does their cuisine. Therefore a “one size fits all” approach is probably not going to work across this vast nation. At this point in time there are less than 10 importing/distributing wine companies in China that are able to service all the provinces across this massive market. Most importers say that they can do this when asking for China-wide exclusivity, but in reality, most can only service one or two of the 34 different provinces / municipalities / autonomous regions and special regions in the country.

9: Online wine sales will continue to grow significantly over the next few years. The sales of local online companies like Tmall.com, as well as international companies such as Amazon are spectacular as Chinese consumers are amongst the biggest users of online shopping in the world.  For “Singles Day” on the 11th of the 11th Tmall.com sells around one million bottles of wine online!! This trend is being driven by the ease of online access to information on these sites about the wines that they are looking at purchasing – a facility that is not readily available at a bricks & mortar seller. The other driver is the ease and speed with which their purchase is delivered in most major cities.

So despite any doom & gloom in the media about the Chinese economy, wine sales are set to continue growing significantly over the next few years. Of course there is then the rest of Asia which is booming as well!!!

To a bright future!!!

THIS WEEK’S WINE REVIEW:

I fell instantly in love with the first varietal Trincadeira I ever tasted which was made by Patritti Wines and which was also their first release of this variety – Patritti 2012 Barossa Valley Trincadeira.

Trincadeira (aka Tinta Amarela) is a Portuguese native red variety that is very widely planted over there. It is mainly used for Port production and in their dry red blended wines but it is rarely seen as a stand-alone varietal wine.

It is an emerging (alternative) variety and as far as I have been able to ascertain, of the eight growers of the variety in Australia, Patritti Wines are the only winery to release a varietal wine. The grapes come from old Barossa vines which were planted a long time ago originally for making Port, when it was fashionable and in fact “all the rage”.

There was a slight hiatus between 2012 and 2015 as the grapes were used in blended wines, but now “It’s Baaack!”

The current vintage, PATRITTI 2015 BAROSSA VALLEY TRINCADEIRA, is a glorious wine with medium-depth of bright purple/red colour, vibrant, alluring, aromas and masses of flavour on the palate. It is not a big wine like a Shiraz or Cabernet, but rather a medium-bodied, smashingly delicious wine with crisp acidity and a slightly savoury finish. It is so easy to drink and enjoy, with or without food.

 

A DELIGHTFUL wine!  You really should try it and at $22 a bottle, it is very reasonably priced.

If you want to visit the Patritti Wines cellar door (as they also make other emerging varieties like Saperavi) it is situated in Dover Gardens, in suburban Adelaide (not far from Marion Shopping Centre) or you can check them out online at:  www.patritti.com.au

SALUTE !!