China wine-lovers go for French reds
As the world’s largest wine expo opens in France, French companies are excited about China’s love of foreign wine.Bordeaux -- Much to the glee of French winemakers, China confirmed its passion for red wine within the first 24 hours of the opening of the world's largest wine exhibition here, Vinexpo.
Barely had the first visitors hit the stands when Hong Kong luxury goods company A&A International announced its acquisition of an historic wine estate near Bordeaux, Chateau Richelieu, a 17-hectare property surrounded by 14 hectares of vines.
According to financial consultant Marc Sabate who brokered the deal, the goal is to control the brand in order to distribute the estate's 70,000-bottle production in China.
"I suspect it's a good idea distribution-wise," said Philippe Laqueche, General Manager of Yvon-Mau, the fifth largest Bordeaux wine merchant with an annual turnover of 100 million euros.
Yvon-Mau's exports to China currently total less than 5 million euros, but with three full-time employees in China, the company hopes to rake in big sales in the future.
A recent study pegged China to become the seventh largest nation of wine drinkers by 2012.
At the moment, the Chinese mainly drink their own wine, often cut with foreign imports and sold under a Chinese label. But the nascent middle class is changing the country's relationship with wine.
They are thirsty for red with a foreign label. But meeting that demand is a challenge.
In China the "trouble is getting the right distributors," said Laqueche. "It's difficult to find a partner who can pay you and is trustworthy. This business is about consistency. You have to invest time, know-how, money -- and wine education."
His opinions were echoed by Christophe Truin, export manager for Les Grands Chais de France (GCF), the biggest wine exporter in France, who solved part of the problem by finding a Chinese partner.
Days before Vinexpo, GCF announced that Dynasty Fine Wines, the Chinese behemoth, would have the exclusive distribution of GCF's successful J.P. Chenet range. However, even with distribution and a Chinese partner in place, an even bigger challenge remains, according to Truin -- "the education of the consumer."
"The consumers, they know absolutely nothing about wine and labels, so they make their choices based on two criteria, price and packaging," said Peng Jia, director of the brand-new Wine World Education school based in the Wine City building in Shanghai, which also houses the city's largest wine store.
Peng partnered with the prestigious London-based Wine and Spirit Education Trust (WSET) and recruited an award winning sommelier and Master of Wine to give classes.
The school opened its doors last month and was immediately flooded with requests from wine lovers as well as professionals.
Peng believes that educating the professionals is critical for building a solid market. "If the professionals don't know how to choose a wine and set the price, the market is confused," said Peng.
Peng came to Vinexpo to find French winemakers to teach at her school. Happily she found another Chinese wine professional on the stand of celebrity winemaker Michel Rolland.
It seems that even Rolland, one of the most famous winemakers in the world, hit a wall when trying to distribute his wines in China.
David Lesage, export director for the Rolland Collection, revised their strategy and hired Ma Lin, a Chinese sales rep with an oenology degree and family background in grape growing in northern China.
Ma travels to China at least once a month to help her compatriots understand Rolland's wines, a job that includes basics such as translating the label. Both Peng and Ma are relishing the challenge of bringing not just wine, but wine culture, to China.
"It's a new product," said Ma. "There aren't any rules."
Bordeaux can expect more local investments by the Chinese. Ma reported that "at least four or five groups of Chinese investors" had approached her to see if she knew of a chateau wine estate for sale.
The Chinese "are everywhere," according to one Bordeaux chateau owner exhibiting at Vinexpo. "And they have got money," he said happily.