Booming wine consumption in China is leading to a growth in locally produced wines but as Chinese tastes become more sophisticated, local wineries are finding that they need to play catch up in terms of quality and vintage.
According to China Organic Agriculture, Demand in China for foreign wines, including those produced in California, is growing rapidly. In 2007, the import of wine into China totaled approximately 54 million bottles, representing a 125% growth from 2006, according to the latest report of the International Wine and Spirit Competition.
The market share of imported wines in China increased from 6.6% in 2006 to 10% in 2007, while industry analysts project that share will reach 18% in 2008. Total wine consumption in China is expected to increase 65% from 2001 to 2010, a growth rate 6.5 times faster than the global average.
Dozens of wine enterprises have set up operations in the region, which has the latitude roughly similar to the Bordeaux region in France.
The coastal city of Yantai, home to over 10,000 hectares of vineyards in Shandong Province is regarded as China’s Bordeaux by the locals.
Many of China’s leading winemakers are expanding rapidly to cater to change in China’s taste buds, and the surge in demand for wine.
Once drinkers of beer and local spirits, many professional Chinese are choosing instead to toast to what they perceive as the more refined and healthy image of grape wine.
By 2011, Chinese drinkers are expected to down more than 1.1 billion bottles of wine or 828 million litres of wine a year, double the figure in 2007, according to a study by the International Wine and Spirit Record in London.
More than 100 wineries have opened since 1996 and there is an estimated 500 vineyards across China, which supply 95 per cent of the wines consumed domestically.
Great Wall Winery, one of the leading local brands in China produces over 50,000 tons of wine each year from its 3 main production areas in North China.
The biggest consumers of wine in China in 2003 were people aged between 35 and 44. The age group that drank the least wine was the over-55 age group.
Price is a major consideration to most Chinese, and imported wine is out of reach to most consumers. A domestic bottle of wine may retail for as little as $3 while imported wine is generally $10 to $20 a bottle or more.
According to a Datamonitor report Wine in China: a market analysis, the influence of western eating and drinking habits, along with rising incomes, have been the keys to market growth. Source: AP
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Jack Shelton 10.13.08 at 7:14 am
The Chinese market for wines is increasing at a staggering rate compared to other countries, especially in the 21-45 age market who embrace western culture. This increasingly more affluent market can afford to drink imported wines while the average citizen mostly drink domestic wines.
There are a handful of wineries in China that are either making or capable of making wines that can compete with the import market. One of these is the Suntime winery located along the 42nd parallel, same as Loire and similar to Napa valleys. With 25,000 acres, it is one of the top three wineries in the world in capacity. The Chinese government invested more than $175mm (US) into the equipment and infrastructure more than 10 years ago. It is ISO certified and has the capacity to bottle 35,000 per hour.
A U.S. company called China Silk, which began four years ago has been importing their formulated varietal since January of 2007 winning awards in the San Francisco International Wine Competition and the Dallas Morning News’ “Grape Expectations” International Wine Competition. They have their own winemaker, John Weeks, who works with the wineries French winemaker to develop wines for the “Western” palate. The wines are between an old world and new world taste and surprisingly good. This proof that China is certainly capable of producing quality wines and viewed by consumers as a good value.
China Silk Wines are distributed in approximately 13 U.S. states and is planning on expanding their distribution nationally over the next 3-4 years. They are attempting to raise their first round of funding to help them compete in the wine category with increased advertising, marketing, merchandising and sales.
The current offering is five varietals: Marco Polo White (90% chardonnay & 10% riesling)and Marco Polo Red (85% cabernet, 10% merlot and 5% syrah; both medal winners in the San Francisco competition. Dragon’s Kiss Riesling is their best seller and is a subtle riesling with a hint of sweetness. Emporers Delight Rose (100% Syrah) medaled in the Dallas competition and was one of only two Roses that were recognized. The Reserve Cabernet is their benchmark varietal gathering praise among wine and industry experts.
The most recent harvest,currently aging, is said to be exceptional and expected to surpass the current offerings.
The U.S. Asian restaurant market is huge with more than 50,000 locations that want a wine from the far east to represent their part of the world. This segment, alone, represents over $250mm (US) is annual sales. China will one day be a major exporter of wines and eventually become the largest wine producing country in the world; they are currently fifth with little exporting.