Chinese create three-ton wine bottle

Atlas Wine Group - Tuesday, July 24, 2012
The Chinese are really getting into wine by creating a huge bottle of it.

The 30-foot long and eight-foot wide bottle contains a rather large supply of Jinding “claret” and was made especially for the Sixth Yantai International Wine Expo held in Shandong province.

It was designed to give the hundreds of visitors a sample of what the wine tastes like and the whole thing weighs three tons.

“We wanted to make sure everyone at the exhibition had the chance to taste our wine,” a spokesman told the Austrian Times newspaper.

“And with the size of this it turns out one bottle was enough.”

Over 450 domestic and overseas wine producers attended the event.

Source: the Drinks business

China's largest winery to build "Wine City"

Atlas Wine Group - Wednesday, July 18, 2012
China’s oldest and largest winery, Changyu Pioneer Wine Co., is to build an international “wine city” in Yantai, Shandong province, at a cost of £600m.

The project, covering an area of 413 hectares, will be home to a national wine research institute and wine production centre.


It will also include grape planting areas, an international wine trading center, a European-style village, and two high-end châteaux.

The wine production centre will cover an area of 220,000 square metres, making it one of the world’s largest wine and brandy production plants.

The city – an amalgam of research, winemaking and tourism – is expected to be completed by 2016.

Changyu Pioneer Wine Co. was established in 1892, when cuttings from Bordeaux, Burgundy and Alsace were planted in Yantai.

In 2002, the company built its first French-style château – Château Changyu-Castel – in Yantai in cooperation with the Castel Group, planted primarily with Cabernet Gernischt – a red variety similar to Cabernet Franc.

It has since added a further five châteaux to its portfolio, three of which are operational.

The other three: Château Changyu Baron Balboa in Xinjiang Uygur, Château Changyu Moser XV in Ningxia Hui and Château Changyu Reina in Shaanxi province, are expected to open in the next six months.

In 2006, Changyu collaborated with Canadian company Aurora to build the largest ice wine château in the world near Huanlong Lake in Liaoning province. It has also expanded overseas, with Château Changyu Kely in New Zealand.

Changyu Pioneer Wine Co. is the tenth largest wine company in the world.

Source: Drinks business


VINEXPO RECORDS 38 PERCENT SURGE IN VISITORS

Atlas Wine Group - Tuesday, June 19, 2012
Vinexpo Asia-Pacific has achieved a significant rise in visitor numbers compared to its last show in Hong Kong, which was held in 2010.

Speaking to the drinks business, Robert Beynat, chief executive of Vinexpo said, “We have the first data from the first day of the show and we have 38% more visitors than the first day two years ago.”


Of the visitors recorded by the show organiser, Beynat said 60% of them were from mainland China, while he also commented that there had been a surprisingly high number of visitors from Japan.

Although the three-day event will not finish until Thursday this week, Beynat said he believed that the exhibition would surpass the forecasted 14-15,000 visitors.

“It will probably reach over 15,000 and could be as much as 16,000,’ he said.

“We are very happy,’ he added.

He then turned the subject to Vinexpo¹s first ever consumer event called Rendez Vous, which, as previously reported by the drinks business, will take place in New York city in November this year.

He said he expected 5-6,000 people to come to the event, which will cost US$180 per day to attend. He added that he plans to hold a Rendez Vous by Vinexpo every year and in major cities other than New York, mentioning London as a possibility.

Source: Patrick Schmitt the Drinks Business

Berry's to open office in Singapore

Atlas Wine Group - Thursday, June 14, 2012
Berry Bros. & Rudd is to set up an office in Singapore next month to complement its operations in Hong Kong and Japan.

The new office will be managed by Nick Pegna, who previously managed Berry’s Hong Kong business, which is now run by Simon Staples, former sales and marketing director for Berry’s in the UK.


Explaining the decision to open an office in Singapore, Alun Griffiths MW said that southeast Asia was an opportunity for the wine merchant.

“We believe there is a lot of business in Indonesia and Malaysia,” he commented.

He stressed the increasing number of successful businessmen in these countries who “have travelled widely and like to eat and drink well.”

He added that such potential customers were, presently, “not served well in their own country”.

While Pegna will manage southeast Asia from July, he said that Staples would take on the responsibility for the north Asian region for Berry’s, and that he would be taking a six-month secondment to Japan.

“We have already been in Japan for three years and Hong Kong for 13; Singapore is the next step,” he concluded.




Tapping into local tastes key to success in China

Atlas Wine Group - Thursday, June 14, 2012
One of China’s largest wine importers has said that pinpointing different tastes across China’s provinces could be key to successfully marketing a wider array of wines.

Speaking to the drinks business, XuGuang Chen, vice-general manager of C&D International, said that while Bordeaux was indisputably still the most important wine for most Chinese, he was “confident of success in the market” with New World wines and stated that, sold in the right place, white wines were increasingly popular.


He noted that white wines were growing in popularity in particular in the coastal provinces of Fujian and Guangdong.

In Fujian Province he added that German Riesling is especially popular, helped by relatively low prices.

His strategy for China therefore is very much one of identifying styles that work in particular regions – sometimes led by cuisine – and pushing the appropriate wine.

He said: “Where there is more seafood we find there is a greater acceptance of white wines so we push it in these provinces.

“Elsewhere though it is still a very small part of our business. The focus in the rest of China is still on red.”

To show just how small white wine still is he said that of the 12 million bottles of wine C&D imported last year, only 20% were white and 30% to 40% alone was sold in Fujian.

Sparkling wines present more of a problem in Chen’s opinion. It is a still a category not widely understood by most Chinese and it does not suit the “gambei” drinking custom.

“Imports of sparkling wine have just started and most Chinese cannot distinguish between a sparkling wine and Champagne,” he continued.

“In China we also drink by doing toasts (gambei) and this is very difficult with sparkling wine.”

Again, figures show how low sparkling wine imports are. Chen said the latest figures recorded 320m bottles imported into China last year, of that just 3.9m or 1% were sparkling.

France took the lion’s share of imports with 1.4m bottles and Italy wasn’t far behind on 1.2m bottles. The remainder was split between other countries.

Chen also touched upon the eagerness among Chinese consumers for education on wine – even if it is an education based more on history than on wine appreciation as it might be in the west.

“Chinese consumers like to know about the customs and traditions of wine,” he said. “Every year we invite over 1,000 people to travel with us to Europe to visit the vineyards.”

C&D also runs more traditional tastings and seminars in China and Chen was particularly struck on his visit to London by the concept of blind tasting – he was in London for the Seña tasting last month.

“We don’t have a lot of blind tasting in China. It is very interesting and it has certainly given me confidence in the quality of Seña to compare it with the likes of Lafite and Mouton Rothschild and see the end result.”

Founded in 1998, Xiamen C&D International is one of the biggest Chinese wine importers and the biggest Bordeaux buyer. It operates a distribution chain with over 2,000 distributors across the country as well as owning 10 shops in major cities, under the name Château & Domaine.

In 2010 it became an importer and distributor for the five first growths.

Source: Rupert Millar the Drinks Business


Building Wine Brands in China is Complex and Costly

Atlas Wine Group - Wednesday, June 13, 2012
The conditions for building international wine brands in China aren’t as propitious as many think, according to Rabobank’s Marc Soccio.

Following the release of the Dutch bank’s first research document on the world’s most talked-about wine market, Soccio told the drinks business: “Branded wine companies need to be reminded that the overall potential for grape wine in China is not what they might believe.”

As previously reported by db, the report has been dubbed “Mind the Gap” by Rabobank, and marks the first standalone piece of printed research by the bank on the Chinese market.

The “gap” refers to the difference between the headline volume figures for imported wine in China and the actual market where wine brands may safely operate.

Soccio, who is Rabobank’s senior analyst responsible for food, wine and horticulture, said that the latter, traditional market was actually around 40% of the total 361 million litres of bottled and bulk wine imported into China last year, or 144.4m litres.

When asked about the other 60%, Soccio said there was a significant volume of wine, often buyer-own-brands, coming into the Chinese market through “unconventional channels”.

Such channels, he explained, comprise small-sized importers with “business and political interests in China” who may have decided to add wine to other goods they distribute due to the demand from their clients.

“The wine is imported and distributed directly to contacts in businesses and the government in China and it’s not a channel where well-known brands tend to thrive, and such distributors don’t crave transparency,” commented Soccio.

Although such wines bypass the brand building opportunities available in the retail and restaurant sectors, the possibility for shifting large volumes of lesser-known labels through this route are impressive.

“A lot of wine is consumed in business and government channels for entertaining and a lot of the demand is coming because the business and government are switching from baiju to grape wine – it is a way to show sophistication and success.”

However, for brand owners who want to position their labels in restaurants and retailers, Soccio stressed that they “have to rely on a smaller number of bigger distributors which rely on traditional channels, mostly HoReCa.”

“But it is harder to distribute through those channels and some of these distributors don’t have the reach the big brand owners would want,” he added.

In essence, Soccio identified a gap in terms of distribution capabilities between the select few large national distributors (such as Nanpu, ASC Fine Wines and Shanghai C&D) and a number of small regional distributors and sub-distributors.

Indeed, he pointed out that as many as 97% of the 3,863 companies importing wine into China handle less than 500 tonnes.

Furthermore, he said that there is also a gap in terms of brand owners expectations: “Brand owners are frustrated by their distributors because they see this volume coming into the market but they are not seeing the growth.”

Summing up, Soccio said, “As a brand owner there are relatively few distributors who can build a brand in China and you have to invest a lot of resources to support them – it is a costly market to develop as a brand owner.”

Key findings from the Rabobank report:


Market

  • Chinese grape wine market: 1.4 billion litres in 2011 (up 14%)
  • Foreign bottled wine: 241m litres (17% of the total market).
  • Foreign bulk wine: 120m litres (but much of this can be accounted for in domestic production)
  • As bulk wine is an input into the production process, Chinese wine companies are highly cost-conscious in sourcing their foreign bulk wine requirements according to Rabobank. (And hence, currency movements can have a strong bearing on where supply is sourced).

Taxation:

  • Bottled wine is subject to a 14% import tariff (20% for bulk wine)
  • Bottle wine is also subject to a 17% VAT and 10% consumption tax

Consumers:

  • There are 1.34 billion people spread across 5 tiers of economic development and 31 provinces with diverse cultures, record Rabobank.
  • Almost 70% of the population live in low-tier cities (below tier 3).
  • In 2011, each grape wine consumer drank on average 6 bottles of wine, according to Sinomonitor’s 2011 China Marketing and Media Study
  • Half of heavy grape wine consumers (4 or more bottles in the last 6 months) lived in tier 1 cities.
  • Wine is more likely to attract either younger, better-educated, wealthier and/or female consumers than baiju or beer.

Distribution:

  • Total number of wine importers: 3,863 companies in 2011 (up 73% from 2010 and up 200% in 5 years). This figure is from estimates by China Customs.
  • The 3 largest importers of wine into China and the three largest Chinese wine companies (due to high demand for foreign bulk wine).
  • 97% of the importers handled less than 500 tonnes of wine in 2011, and accounted for almost 40% of the total import volumes. (Wine is measured in tonnes by China Customs).

Australia Seeks Rising Asian Middle Class

Atlas Wine Group - Tuesday, June 12, 2012
An increasingly affluent middle class in Asia will be pivotal for the development of Australian wine in the region think producers.

To do so the message will have to be on brands and the premium end of company ranges.

Anthony Davie, managing director of Treasury Wine Estates Asia, told the drinks business that the company was focused on brand building as it sought to cement the reputation of Australia.

“We believe in building brands,” he said, “In China especially it’s what they’re looking for and we have them in the form of Penfolds, Wolf Blass and Beringer etc.

“We have to take a long term approach though,” he continued. “We haven’t chased volume we’ve focused on the premium end and again we have brands that can operate at that end of the market.”

He explained that China and indeed the entire region was a “complex market” and it was best navigated with good distribution and brand building.

More importantly he stressed that companies had to be “realistic about how they build their businesses” and he was glad to see domestic wine and spirits companies developing, as they helped bring drinkers into their respective categories.

Speaking to db, Nick Blair, global communications director for Pernod Ricard, was positive about Australia’s chances too and also highlighted the importance of brands and the premium end of the market when focusing on Asia.

“We need to focus on our premium wines and our strong brand heritage, it’s very important in this market,” he said.

He commented on Australia’s growing market share – although he added that it was the product of 20 years work not something that had sprung up “overnight”.

“France has the lion’s share but Australia is number two and growing. We have momentum and if we continue in that vein and don’t do the wrong thing it’ll be great for all Aussie producers in the long run.”

Chris Hatcher, chief winemaker for Wolf Blass, said that Australia had to capture the rising middle class and the approachable style of its wines could lead it into a position of favour it last saw in the UK in the 1980s and 1990s.

“It’s not dissimilar to the UK in that period,” he said, “Lafite and those big names will always be there but the rising middle class here will look for countries like Australia because they’re after wines to drink and labels they understand.”


Australian Wine Grape Production Down

Atlas Wine Group - Tuesday, May 08, 2012
New data has shown that Australian production of wine grapes is set to sink to a five-year low this year.

Two wet summers damaged vines in New South Wales and South Australia and production in the 2011/12 season will total about 1.53 million tonnes, down 2% on last year, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said.

This is the lowest production since the 1.41 million tonnes produced in 2006-07.

Yields of Chardonnay, Shiraz and Cabernet Sauvignon are expected to be the most significantly affected by last year’s wet conditions.

Australian wine exports have been sliding in recent years and ABARES said it expected the Australian wine market to continue to face strong competition on the back of abundant wine supplies, the global economic slowdown and a strong Australian dollar.

ABARES executive director, Paul Morris, said: “For many regions in eastern Australia, the damage sustained by vineyards during the wet 2010–11 growing season had a negative effect on the fruit set of this year’s crop.”

“As a result, vines had fewer grape bunches with smaller berries on each bunch, although the quality is expected to be good.”

ABARES, which expects the harvest to recover to 1.63 million tonnes by 2013/14, said the quality of the current wine grape crop was reported to be good.

Source: Martin Crummy The drinks Business 

Chinese Continue Thirst for International Brands

Atlas Wine Group - Monday, May 07, 2012
Chinese alcohol consumers are maintaining a thirst for high end luxury international brands as the region presents itself as a market of the future.

The Worshipful Company of Distillers’ city debate agreed that “China is the Heart of Asia” with evidence that Chinese consumers are continuing to purchase prestige spirits at the top end of the market.

This debate centred around the spirits business, with Martin Riley the chief marketing officer of the Pernod Ricard Group the most vocal in support of China as the heart of Asia.

He started by outlining how alcohol plays a major role in Chinese society. “It has no negativity surrounding it, is involved in the majority of food occasions and the Chinese drink 11.6 litres per head a year of beer, wines and spirits,” he said.

Riley also explained Cognac and whisky were the only spirits making an impact in the region as three brands account for 50% imported spirits – Hennessy Cognac, Martel Cognac, and Chivas Regal whisky. International spirits consumption in China only accounts for four million cases compared to an estimated 900 million for the domestic clear spirit Baijiu.

This, he explained, is one of the main issues with tackling the Chinese market from a spirits perceptive as you need a good understanding of the culture and where alcohol fits in to successfully market your brand.

“Alcohol plays a key role in the culture of China,” he said. “It is important at the food occasion as 85% of the total Chinese alcohol consumption happens then. Baijiu has established itself as the brand used with food and has the market share, Cognac has some foothold there as well as it is used in tradition Chinese toasting.

“In terms of route to market the Chinese like the idea of luxury and are keen to associate drinking good quality alcohol with success and Cognac can hold the high ground there. There is an emerging trend of young professionals buying their first home and then building a bar in it and wanting prestige international brands stock there to be proud of.”

Riley also added that the Chinese influence is beginning to be felt outside of Asia.

“There is no choice but to grab the opportunity in China because it has a huge influence in Asia and beyond,” he added.

“The influence of the Chinese beyond China is huge. If they go into an Asian hotel in France, they will expect to see the international spirit brands that they see at home. That is part of our job to get our product in the right places.”

Another speaker, Bill Farrar of The Edrington Group, had what he described as “reality checks” about the potential in the Chinese market.

After laying out the positives in the Chinese alcohol market for spirt producers, he said: “China may go its own way in terms of the international spirit brand market. In the longer term they might just want to do their own thing and look inward to domestic production.

“They have done that in the science and technology market, where they like the technology Samsung has to offer but instead of selling the brand they use the new technology in their own brands.”

Farrar also spoke about the pace of the opportunity in China, explaining that the Chinese market liked older whiskies but that presents a supply and demand conundrum for producers who are thinking ahead to 2030.

Another warning addressed at the London debate was from Chris Pitcher, partner and drinks analyst at Redburn Partners, warned: “Look East with open eyes as they are beginning to look West at us.”

“Alcohol producers in China will look internationally soon and they will not sit back and wait for international alcohol brands to take their domestic market. It will mean the country is slowly re-earning their bracket as the number one economy in the world.”

Pitcher’s main argument was that the scale of opportunity was apparent in China, but the pace of change is in doubt.

He continued: “The opportunity is there at the high end but the country is not rich to the core and it leaves an uncomfortable parody as it is uncertain and uncomfortable to value the country.

“The speed of the opportunity can easily be misrepresented. You may want one million cases today, but what about tomorrow?”

Source: The drinks business

HONG KONG IWSC UNVEILS VIP JUDGES FOR 2012

Atlas Wine Group - Monday, April 30, 2012
Karen MacNeill has been named as Guest VIP Judge at this year’s Cathay Pacific Hong Kong International Wine & Spirit Competition.

The Napa-based US wine writer, educator and consultant will join chair judges Debra Meiburg MW, wine journalist, and Simon Tam, Christies head of wine for China, who head up panels of Asian born and based judges.

MacNeill said: “I’m absolutely delighted to be working with the Cathay Pacific Hong Kong International Wine and Spirit Competition. The wine and spirit market in Asia is incredibly exciting and I’m looking forward to working with some of the finest palates judging the competition.”

A major feature of the Competition is its Asian food and wine pairing awards, an area where MacNeill’s background in food writing will prove particularly valuable.

Describing MacNeill’s appointment as “an exciting development for the Competition,” HKIWSC managing director, Allen Gibbons commented: “With Hong Kong proving to be the gateway into the Asian wine and spirits market, Karen is the perfect person to join Debra and Simon as co-chairs.

The largest wine and spirits competition in Asia, judging for the HKIWSC takes place from 4-8 October 2012, with results announced at the Hong Kong International Wine & Spirits Fair, which run from 8-10 November.

In order to ensure standards meet the highest international levels, wines and spirits are stored prior to judging  in the temperature controlled environment of Crown Wine Cellars, with the final results check by a team from KPMG.

Since it was established four years ago, Cathay Pacific Hong Kong IWSC has seen the position of Guest VIP Judge filled by UK wine critic Tim Atkin MW and Italian oenologist Alberto Antonini.

Source: The Drinks Business