For a pricey $1320 you can get your hands on the latest market analysis of China’s burgeoning wine market.
This report covers the market for alcoholic wine in the People’s Republic of China. The report covers the red, white and blended grape and sparkling wines sectors. There is also some coverage of fruit wines (normally referred to as ‘berry wines’ in China) in the report. This report does not include yellow rice wine, or Shaoxing wine.
KEY REPORT FEATURES
This recently updated report includes:
- An overview of China’s total food market with sales statistics up to interim 2009;
- The total value and volume of wine consumption, including consumption channel breakdowns and by type of wine, up to interim 2009;
- The total value and volume of wine retail sales, including by sector, up to interim 2009;
- Leading manufacturer market shares based on revenues to 2008;
- Volume & value forecast the meat market in China up to 2014;
- The retail wine market background and current issues;
- Marketing & distribution;
- SWOT analysis
- Key manufacturer profiles
- Key contacts & trade events;
- Overview of China’s demographics and macroeconomics
EXECUTIVE SUMMARY
China claims over 160,000 acres of vineyards nationwide, but much is in remote areas, such as those in Tibet near Kazakhstan, where Silk Road traders brought seeds centuries ago. There is also a small native grape (Vitus thunbergii) that grows wild north of Shanghai. And Russian visitors brought plantings of Muscat and Ratsiteli to China in the early twentieth century.
Although having been started at the beginning of the 20th century, the wine industry in China has only recently begun to develop into a significant market. Chinese consumers have tended to stick to what they know, being beer and grain spirits – drinks that offer a higher alcohol level per unit than wine.
However, wines have attained consumer acceptance, not least due to Chinese politburo member Li Peng, who decreed that state banquets should be lubricated with wine instead of spirits in 1996. The influence of western eating and drinking habits have been key in this, as have rising average incomes in China. Indeed, wine is now becoming the fashionable drink for the wealthy younger generations in China’s cities, and the “badge” drink of China’s wealthiest élite.
The value of the market has more than doubled over the last seven years, and has become much more sophisticated. Not only are there more foreign wine imports available in restaurants and in the shops, but the number, variety and quality of domestic wines has also increased. This has served the market by providing local consumers with a greater array of cheaper products to try.
However, the domestic market has moved on, and domestic wines are now reaching a level of quality that they can compete on price with imported wines, and even look to developing an export market. However, the domestic market is where most Chinese wineries are looking to develop their sales. With about 600 million young Chinese, all exploring new types of alcoholic drinks, the potential market for sales of wine in the future is great.
The first vestige of winemaking was brought to Argentina by Spanish conquistadors and missionaries who made their way from Mexico to the area in the latter part of the 16th and early 17th centuries. They brought native grape cuttings from their Spanish homeland including varieties not well known today like criolla, still grown in Argentina today, and the common mission grape currently grown in limited quantities in California.
New waves of European settlers came to Argentina in the early 1800s, bringing vine cuttings from Spain, Italy, and France. Among these cuttings was some malbec that now forms the backbone of the Argentine wine industry. Remarkably, these cuttings originated before the dreaded root loose, phylloxera, afflicted European vines. Most Argentine malbec is planted on original rootstock rather than grafted to disease resistant stock like most vines in other wine producing countries.
Malbec is one of five varietals allowed in the department of Bordeaux in France. It was virtually wiped out in this area by a killer frost in 1956, and it was not widely replanted. Some malbec is grown in California, but American varietal bottlings are rare. It is in Argentina this variety thrives.
Argentina produces and drinks a lot of wine. No wonder tango is the national dance. Argentina is the fifth largest wine producer in the world behind France, Italy, Spain and the United States.
Mendoza, Argentina
Only fairly recently have Argentine wines been significantly exported because the native populace drank most of the domestic wine produced. Tango apparently requires a lot of wine. As long as the populace was willing to drink copious amounts of poor quality wine, there was no need to contemplate exportation.
When years of political instability ended, the Argentine wine industry had been left behind. The industry set out to modernize like Chile, the neighbor to the west, who was exporting significantly improved quality wines primarily to the United States. Like Chile, Argentina’s producers adapted winemaking methods modernizing and producing wines in the New World style with the aid of advisors and investors from America and France.
The modernized industry started to focus on malbec. Malbec seems especially suited to the terroir. Although prone to disease in other areas, it’s not as susceptible to mildew and rot in Argentina perhaps because it is grown on some of the highest altitude vineyards in the world.
These high altitude vineyards exist in dessert-like conditions with long uninterrupted, dry sunny days. Irrigation is a necessity. In the past winegrowers allowed vineyards to flood. Today better producers use the Andes snowmelt ancient irrigation system more judiciously. They know to produce grapes of great flavor and intensity, yields must be kept low and vines must struggle.
New winemaking practices produce an entirely different malbec than that produced in Bordeaux and in Cahors in southwest of France. Some say malbec is like a weaker version of merlot. The ones I have tasted lately are not tame. They are generally big, easy drinking wines of firm structure.
Aside from drinking wine and dancing the tango, Argentineans eat copious amounts of meat, especially beef. They are known for their open-air spit barbeques called asados where steak, beef ribs, pork sausage and even chitterlings are grilled. Malbec is the perfect wine for the asado and for our traditional charcoal grilled steaks and summer barbeques. It is attractive in today’s economy because good malbec can be had at a reasonable price.
Southeast Asia is home to many consumers with rising levels of income. When income rises and a given society modernizes or evolves so do its tastes and preferences.
This is currently going on in the greater Asia region as we speak. Add the extra element of a ever more interconnected global economy and the pace of change is truly incredible.
Singapore, Malaysia, Thailand and Vietnam have a combined population of roughly 180 million people. These countries represent a diverse mix of different elasticities, levels of development and traditions.
Malaysia — For instance the majority of Malaysians are Muslims who in accordance with their religious practices do not drink any alcohol. However even in this context a great potential wine market exists.
For starters Malaysia is home to about 28 million people, of which 2/3 are Muslim and therefore do not drink alcohol. The remaining 1/3 still presents a sizable market of about 8-9 million people, greater than the combined markets of Singapore and Hong Kong, two already very developed wine markets.
Second, ethnic Chinese in Malaysia are unarguably one of the wealthier segments of Malay society and are also coincidentally the largest consumers of wine in Malaysia. As members of the upper-echelons of society they unknowingly serve as status symbols for people to emulate as they aspire to move up the social latter.
Singapore – Wine market breaks down as follows: 10% sparking wine, 65% red wine, 25% white.
Thailand – According to the New Zealand government which published these statistics, consumers in Thailand lack detailed knowledge about wines and have a unfounded, preconceived notion that the only “real” wine is red wine. At the moment wine makes up about 20% of the alcohol consumed in Thailand every year. About 83% of the wine consumed in red. A major challenge for those trying to break into the Thai market will be educating the consumer about white wines, which in many instances would accompany Thai foods better than red wines.
Vietnam – Most Vietnamese do not drink grape wines because they have yet to acquire a taste for it. Wine is a relatively new product to the average Vietnamese person. Therefore most wine demand within Vietnam comes from expatriates, tourists and a few Vietnamese of the upper classes who have acquired a taste for it.
The importance of using Singapore as a hub for serving all these wine markets is highlighted in this article from New Zealand.
“It is important for New Zealand wine exporters to consider leveraging on Singapore’s position as a regional distribution hub for wines by developing partnerships with distributors who have strong regional distribution networks.“
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