Casual observations about the developing wine palate of the Chinese consumer

Looking back on my most recent business trip to China to promote Mir Global's wines and last night's Sister City Networking Event in Chicago which Mir Global was present at, the two grapes the new Chinese wine consumer seem to prefer are Sauvignon Blanc and Malbec.


This doesn't mean it is as simple as pitching quality bottles of each of these types of wines to importers / distributors in China. For starters, Chinese by and large have never heard of Malbec and when it comes to white wines you are always fighting against the current because about 70% of the wine consumed in China is red.

Cabernet Sauvignon's dry, deep tannin full tastes are seldom well received in China. Wine experts and sophisticated consumers do exist, but these consumers are not representative of the greater wine market.

When it comes to Chardonnay, a young wine which has not been aged in french oak and has a sweet almost fresh taste (which reminds me of Sauvignon Blanc) can work. However, finding a young Chardonnay which has these qualities is quite difficult. It is a great deal easier to find a Chardonnay from California that does have a drier, woody taste... sadly Chardonnay's of this style (which are very popular in the US), are not what the unrefined Chinese wine palate seems to prefer

A friend of mine who is marketing French wines to China has also found Viognier to be quite conducive with the Chinese palate. The floral fruity aromas of a Viognier, attract the Chinese to the wine and when paired with food it goes superbly with spicy Asian cuisine such as Thai food.

Sauvignon Blanc's fruity and vibrant aromas along with its crisp and refreshing taste seem to draw the Chinese wine drinker in. During last night's networking event in Chicago, I was particularly intrigued by the overwhelming positive reaction of women who sampled Palmer Vineyard's 2008 Sauvignon Blanc.

Palmer's Sauvignon Blanc gives the wine drinker a refreshing and crisp experience. It is almost as if this particular wine has a subtle carbonated kick to it. Not strong enough to think you are drinking a wine spritzer, but just enough to give it a unique kick and not overcompensate other elements of the wine.

Moving onto Malbec's, Argentina's pride and joy. Many describe Malbec as a versatile red wine, and this is exactly what it is. Malbec in my mind, is almost a hybrid of characteristics commonly associated with other reds such as Merlot, Cabernet and Pinot Noir. Malbec's which have been aged in french oak retain their berry, fruity substance while also balancing in a magical way with the dry and intense tannin's typically associated with a full bodied red wine.

** Reminder to all readers, opinions expressed in this entry are my own and should be not treated as fact. Thank you.

~ Bennett Reiss - International Trade Consultant at Mir Global Marketing LLC

Opportunity knocks for Argentinean and Chilean wine exports to China

[Mir Global Wine Corner Analysis] -- HKTDC article, "China's wine imports slowing."


China's wine imports are slowing reports HKTDC in this article. Wine imports increased a incredible 100% between 2006-2007 but slowed between 2008-2009, growing only 36%. None the less, total imports reached a impressive 6,389,439 cases, or 76,673,268 bottles of wine, making China the world's largest wine import market (once again according to this HKTDC article).

Despite the slow down, the macro picture of China's wine market is still overwhelming positive for wine exporters, especially for lower cost producers in the Southern Hemisphere.

The challenge for Argentinean and Chilean producers will be to figure out a way in which to take advantage of a more conservative and cost conscious Chinese consumer in the midst of the global economic downturn.

The HKTDC article, is of the opinion that the biggest winner from slowing wine imports will be China's domestic producers. While this may be partially true, Mir Global Marketing Co., attributes the rise in the consumption of domestically produced Chinese wine to other far more significant market factors.

1) The global slowdown has forced consumers around the world to cut back on luxury spending and to be more cost conscious. For the Chinese wine consumer who has yet to develop their wine pallet and is exploring wine for their first time, it makes sense they would economically rationalize to spend 20 rmb on a Chinese bottle versus 120 rmb on a French bottle.

2) Wine demand in China can partially be attributed to the symbolism behind wine. As the great American author Ernest Hemingway once said, "Wine is the most civilized thing in the world." If you are a Chinese consumer who has yet to develop your personal wine preferences and are trying to network in the business or political world where it is a good thing to appear "sophisticated," you might be able to accomplish this with a Chinese bottle of wine. So, why invest in a expensive French or Italian bottle of wine?

Although, if a lower-middle class university student was about to meet with the head of Google's Recruiting Office in Beijing, and had never tasted wine in his/her life, I think it would justify dipping into your savings for a French bottle of wine. But, if you're simply going out for a nice drink with some friends on a Friday night to the Beijing's bar district, splitting a bottle of French wine when you don't know what you're tasting will not be a common site.

To further explain:

A considerable amount of wine demand in China is generated from a new elite class of consumers with considerable spending power who can afford expensive wines and liquors. This includes, the rising class of sophisticated, metropolitan consumers in cities like Beijing, Shanghai and Guangzhou. Businessmen and women. Politicians. Wealthy university students. Chinese who have lived abroad. And of course, foreigners living or visiting China.

However, the majority of China's new wine consumers can not afford to indulge in relatively expensive bottles of wine, especially in times of economic uncertainty. What is more likely to occur is the new middle class consumers in 2nd and 3rd tier Chinese cities like Harbin, Dalian, Suzhou, Chongqing, Kunming, Taiyuan, etc will attempt to emulate (the best they can) China's new class of rising elites.

This has been the case in societies around the world since the dawn of civilization.

The main difficulty for Argentine and Chilean producers at the moment is convincing the very brand conscious Chinese to trust the quality of their products. France remains synonymous with quality when it comes to wine, while wines from Italy, Australia and Chile have had to struggle for years to build a trusting image with Chinese consumers.

Opportunity has come knocking at the door. Before you answer, just make sure you and your company are ready.

Bennett Reiss - International Trade Consultant at Mir Global Marketing Co.

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China's Wine Imports Slowing -- HKTDC

"China has always been the biggest market of wine imports globally. However, the situation is changing. With the rise of China's domestic wine production, China's import of wine is on a downward turn.

After world renowned brands Hennessy, Remy Martin and Martell, Courvoisier's Napoleon wine, one the four top-class brands of wine in the world has announced its formal entry into the Chinese market. Not long ago, Hennessy announced the debut of its Iridescence, a world classic type X.O. on the China market, alleging that China was its biggest consumption market for the first time.

Although various brands of imported wine products have poured into China's market, the import growth has slowed down. According to statistics from the customs, China's import of packed wine of less than two litres slowed down its growth last year, and the import of wine in packaging of more than two litres has stayed at the same level for three successive years. After hefty rises of about 100% in the 2006-2007 period, China's import of wine was 6,389,439 cases of packages of less than two litres (nine litres per case), rising 36% year on year.

The increase of raw materials for wine production has weakened China's dependence on import. With the expansion of planting areas for grapes, the raw materials for wine production have increased gradually. However, with increasing expansion of China's wine market, there will be more and more foreign brands of wine entering the China market, indicating more fierce competition for China's wine- making industry in the coming years. "

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2009 Southern Hemisphere Wine Harvests -- Chile, Argentina, South Africa, Australia, New Zealand

The results are out, the reviews have been written, and now its time to sample the 2009 wine harvest. At lease this is the case for producers in the Southern Hemisphere of the world.

As producers in North America and Europe watch their grapes ripen, vintners in Argentina, Chile, South Africa, Australia, and New Zealand are preparing to sample their first bottles of 2009.

A healthy growing season is paramount in the process of ultimately producing a quality wine. This is of course why certain regions in the world excel in wine making. These regions are blessed with extremely conducive climates for growing grapes used in wine making. This is why regions like Mendoza, Argentina have historically been known to consistently produce high quality wines. Click here to read more about the region of Mendoza from Mir Global Marketing's home page)

This article from the Winespectator.com provides links to the publications reports on how the 2009 grapes have turned out in Chile, Argentina, South Africa, Australia and New Zealand.

Argentina: Heat spike hurts Argentine white wines, but reds weather the warmth

Chile: A warm and dry year leads to ripe wines and slightly higher yields

South Africa: South Africa's wine regions enjoy a cool, dry season, producing quality across the board

Australia: Yields are down in most regions, but a cool, dry season may have produced elegant reds

New Zealand: A moderate growing season bodes well for the country's reds and whites


To access complete country harvest and grape reports from the Winespectator.com, please click on each respective country link

Affordable, Franzia box wine flying off the shelves!

With the global economic crisis in full swing liquor stores and wine bars are seeing their older, high-priced wines gather dust.

Bronco Wine Co. in Ceres, Stanislaus County produces more than just box wine like Franzia. The group is also behind other affordable brands such as Charles Shaw, Crane Lake and Napa Ridge.


Year to date, Bronco's Wine sales are up 25% on volume. Charles Shaw alone is currently selling about 6 million cases a year. The company has aspirations of eventually moving 100 million cases a year.

Where do they expect to find the bulk of their buyers? You guessed it, China.

Next month, the plan is to unveil a new Australian Chardonnay by the name of "Down Under." It will sell for half the price of Yellow Tale, currently one of the most consumed, affordable, white wine around the world.

Fred Franzia, who sold his brand to Bronco wines, had the following words to offer to offer the SF Chronicle, in this article.

"His only worry seems to be that he might run out of wine - even though he controls reportedly 40,000 acres and buys far more in bulk. "We'll probably have to allocate. Imagine that."

This is the year, after all, when cult-wine allocations are being busted, when retailers can cherry-pick the finest wines. And yet many wineries still won't flinch on pricing. Suddenly, Franzia's crusade against high prices - he still believes no wine should cost more than 10 bucks - has an eerie resonance.


Mir Global Wine Corner Analysis

It does not take a genious to figure out Franzia's market strategy, especially when it comes to China. In general, Franzia hopes to capitalize on the rising consumption of wine in markets like the United States, China and Russia by tempting people who like to drink with cheap prices and wine that doesn't taste like rubbing alcohol.

Franzia box wine and Charles Shaw do taste better than the majority of Chinese wines I sampled in the past. That does not however mean that they are by any means... good.

In the United States where a great variety quality wines from Chile, Argentina and Australia are widely Franzia will get lucky if this recession forces consumers to substitute slightly higher priced, quality wines from these countries for their poor alternative.

If Franzia is able to slightly improve its quality and hook consumers however, I can see their strategy working out to a certain extent.

As for China. This is great news for companies like my own Mir Global Marketing Co., which specialize in South American wines.

If Franzia goes through the trouble to promote their cheap products in China and are able to successfully get the Chinese consumers buying cheap, lower quality Chinese wines to switch to their wines, they will be doing South American wines a great favor.

One of the main difficulties for Argentine producers at the moment is convincing the very brand conscious Chinese to trust the quality of their products. France remains synonymous with quality when it comes to wine, while wines from Italy, Australia and Chile had to struggle for years to build a trusting image with Chinese consumers.

Franzia already has a decent customer base in China where wines are outrageously over-priced. Although something just does not sit well with me when you must pay $6-8 for a glass of Franzia.

What if there was a Chardonnay from Argentina listed on a menu just Franzia's selection?

If Franzia's marketing and promotion of their own wines have worked, this will inevitably mean the Chinese consumer has become more educated about wines and that his/her tastes have evolved.

I have a feeling, after drinking a few glasses of Franzia, the sophisticated wine drinker in China will decide to spend a few extra RMB for a much higher quality glass of wine.

So let me say the following:

"Thank you Franzia."



Bennett Reiss - International Trade Consultant at Mir Global Marketing Co.

Argentine wine harvest down 25%

Below I have copied and pasted a excerpt from this article from Decanter.com about Argentina's wine harvest falling 25%.

What really grabbed my attention was the last paragraph... During the past few years NYC's restaurants and wine bars have increasingly been carrying more wine from Argentina.

Guillermo Garcia points out that the economic crisis has helped Argentine wine. This has been crucial in helping Argentina break the mold and get their wines onto tables, which would normally be occupied by a French, Italian or Californian bottle.

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Due to climatic conditions, this year's wine harvest in Argentina will be down 25% as compared to last year.

Mendoza, Argentina

According to Argentina's National Wine Institute, hail in some provinces, and overall higher temperatures in February and March, are factors in the lower production output this year.

The lower production this year has occurred despite Argentina having a 12% increase in land under cultivation for wine grapes.

Guillermo Garcia, president of the National Wine Institute, said: 'If there had not been an international crisis, we would not have been able to provide wine to countries with developed markets.'

Chile's Concha y Toro Q1 profit up 37.6 pct yr/yr reports Reuters

Chile's leading wine exporter Concha y Toro CHT.SN(VCO.N) said on Wednesday its first quarter net profit rose 37.6 percent from a year earlier
to 8.395 billion pesos ($14.4 million).

Concha y Toro said consolidated sales rose 12.6 percent during the period to 68.458 billion pesos.

"In this quarter, we saw significant growth in the UnitedStates market," CEO Eduardo Guilisasti said in statement, adding the company also saw growth in the United Kingdom and Japan.

Concha y Toro reported in February its profit for 2008 slipped 5.23 percent to 35.152 billion pesos.

The company said in November it planned to raise up to $189 million in a capital increase and bond issues on the local market to pay for future projects and pay down short-term debt.


[Reuters Article]