Invitation

As a New Zealand drinks producer, you are cordially invited to join our featured New Zealand Pavilion in this Gateway to Chinese market

GUIZHOU – A MANAGEABLE GATEWAY MARKET TO CHINA

Guizhou Province is the ideal market for NZ producers – our size, our kind of people. Guizhou (pronounced “gway-joe”), in Southern China, with a population of 34.7 million people, and annual GDP of $US 151 billion, is one of China’s most progressive provinces, as can be viewed in the attached film here

Watch Video

To put it into Kiwi perspective, it’s a market over twice the size of Australia, and its capital city Guiyang (pronounced “gwee-young”) has a population almost the size of the whole of New Zealand. More than just a gateway into the vast market of China, Guizhou Province is a market in itself for medium and small New Zealand drinks producers.

And this China Guizhou Expo is the perfect entry point to that market.

As the result of friendly personal connections established in two earlier visits to Guiyang in 2015 and 2016, WineZeal Enterprises Limited has been invited by the Guizhou Sub-Council of the China Council for the Promotion of International Trade, which has responsibility for the Guizhou International Wine Expo Co. Ltd, to organise a New Zealand Pavilion, which will be a feature of the Main Hall of this vast Expo, and publicised as being the Honoured Guest Nation for this 2017 Expo. Details of the Expo venue can be seen here

Watch Video

Our principal, Terry Dunleavy MBE, has been able to negotiate with Expo management that there will be no charge for either the floor space, or the construction of an attractive New Zealand Pavilion, built to our instructions. Exhibitors will be required to meet only their own costs of travel and accommodation, plus hire of English speaking college students to act as interpreters and assistants on-stand. (Note: this is a completely voluntary service by Terry, whose only compensation is that Guizhou Government is paying for his travel and accommodation).

For this introductory year, time constraints mean that invitations to this 2017 Expo have to be restricted to New Zealand drinks suppliers, already represented in China, and having stocks available for domestic transfer to Guiyang.

Two points of immediate interest:

On-site storage of drink stocks: Terry has negotiated storage within the Expo complex for all stocks which will be available for access during the Expo.

Sale of drinks ex-stand: Exhibitors, can and do sell bottles and cases from their stands, and for those who participate we will give you confidential tips aimed at helping you to sell completely out of your Expo stock shipment by the end of the Show. It is a fascinating and highly instructive (and rewarding) introduction to sales and marketing in the Chinese environment.

Duration of stay: For principals who may wish to attend the Expo, we suggest to travel by China Southern Airlines to Guiyang (via Guangzhou, where tranship for domestic flight to Guiyang), departing Auckland evening of 6 September, arriving Guiyang following morning; departing Guiyang, 14 September, arriving back at Auckland following morning.

Airfares: Terry is seeking assistance from Guizhou Provincial Government for preferential air fares flying China Southern Airlines. Indicative return fares look like being in the region of $NZ2000 for Business Class, and $NZ950 Economy, but final prices will definitely be confirmed before anyone is required to confirm participation.

Accommodation: We will seek accommodation at Hyatt Regency Guiyang, a 5-star hotel just across a busy road from the Expo Centre. Room rates from approx. $NZ 160 night. Participants will need to specify whether they wish a room on their own, or are prepared to share twin.

Arrangements for this New Zealand participation in this 2017 Expo are being made in association with, and with the valued help of, New Zealand Trade & Enterprise (NZTE) staff in China.

Contact for NZ principals: Terry Dunleavy, Cellphone 0274836688 Email: terry@winezeal.co.nz

New item:

CHINA - IS IT TIME FOR WHITE WINE?

The Chinese wine market is a fast-evolving creature, often tough to keep track of. Some of the changes over the past 5 years have been so rapid and dislocating that they have quickly destroyed the viability supposedly robust business models, while creating at least as many new ones.

While ostentatious banqueting with expensive Bordeaux (or something that purports to be so) has declined precipitously, a new class of consumer has emerged in the wine category: those enjoying wine in a more genuine, everyday setting, ordering online (often with same-day or, increasingly same-hour) delivery, and taking their own wine to restaurants. In short, these consumers are behaving in a way more akin to consumers in mature wine markets.

Amid the rollercoaster that is the Chinese wine market, certain articles of faith have remained constant, chief among which is the total dominance of red wine in the market. But the expert panel hosted by Wine Intelligence at last week’s Vinexpo seminar, China’s Diversifying Wine Market, introduced the audience to some intriguing prospects: first, that white wine will soon take its place in the mainstream, and second, sparkling wine (currently a tiny proportion of consumption) will also have a role to play.

Historically, white wine has had virtually no traction in China – all wine was referred to as “red wine” until recently, with white wine often translated awkwardly into Mandarin as “white red wine”. Nowadays, 56% of imported wine drinkers say they drink white wine at least once in a while. According to trade interviews conducted by Wine Intelligence amongst a few importers and retailers in China, strong growth in sales of white wines is predicted, driven by the increasing popularity of aromatic whites, particularly in major cities. Aline Bao, a panellist at the Vinexpo event from COFCO (one of the biggest importers of wine into China as well as a major domestic producer) noted that in some Beijing stores, white wine now accounts for 15-20% of sales.

The main driver of change appears to be the emerging generation of Chinese consumers who have graduated from university in the past 10 years and are now exploring beyond the frontier of traditional red Bordeaux that their older peers once flocked to. The dominant local social media platform, WeChat, has lit a fire under younger consumers and promoted experimentation; it has become a social and informational umbilical cord for most young urban Chinese wine drinkers, and can quickly turn a new idea into a viral trend.

According to trade sources in China, there will also be ongoing growth for sparkling wine in China, although from a very small base. Currently Champagne dominates the category, driven by strong, established brands such as Moët & Chandon and Perrier-Jouët. However, Champagne is predominantly drunk in night clubs or for business functions (incidentally, the same purpose for which prestigious Grand Cru Classé was used for 5 years ago).

A more approachable, Prosecco-like, sparkling product – in terms of taste profile and price – is needed to drive the growth for sparkling wine in China. We have started to see a growth opportunity for sweeter sparkling wines with fruity and floral characteristics, with the likes of Asti and sparkling Moscato from New World countries leading the way. We are seeing more consumers drink these products on more informal occasions as a ‘treat’. And again, the ‘selfie culture’ on WeChat has helped the sparkling trend among the urban millennials, who use sparkling wine to reflect their western attitude and modern lifestyle.

More insight on this topic is available in the new China Landscapes 2017 report, released this coming Thursday, 29 June.

Authors: Richard Halstead and Chuan Zhou

Email: richard@wineintelligence.com, chuan@wineintelligence.com

CHINESE WINE MARKET IS BECOMING MORE MATURE

Our research director finds 12 reasons why the Chinese wine market is becoming more mature

Last week, Wine Intelligence joined forces with long-standing partners Wine Australia to deliver two working lunches, one in Sydney and a second in Melbourne. In front of the iconic backdrop of the Opera House, the Sydney session held at Quay Restaurant was focused on Australian wine’s most important and now most valuable export market: China.

Wine Australia’s Senior Analyst, Mark Rowley, opened the seminar by recapping how far both the Chinese wine market, and Australia’s participation in it, has been transformed in the past 5 years. “As a category, bottled imports increased by 14 per cent to 500 million litres in the year to May 2017. Most countries recorded growth, with USA the only country receding. Australia recorded the strongest growth figures and remains second in the market with 17% share of bottled imports… due to a short Argentinean crop and price being the key concern in commodity wine markets, the biggest impact has been in the bulk wine market where Australian suppliers have begun to win share from Chile.”

Then, as the last of the canapés circulated (blue swimmer crab cake, sea scallop pearls, and jamón and truffle crostini, for those taking notes), Wine Intelligence’s Research Director, Chuan Zhou, stepped up to the podium.

CZ australia

Chuan has been researching China’s growing obsession with wine for the past 3 years, and his latest thinking focused on 12 key trends that are currently driving the market. While full details can be found in our China Landscapes 2017 (now available) and our upcoming consumer segmentation report, China Portraits 2017, we outline just a few of our findings below:

An expanding market Growing disposable income, coupled with improved distribution logistics for wine, has enabled increased access to wine in lower tier cities, contributing to a sharp increase in the population able to find and afford imported wine

The acceleration of “non-event” wine consumption Wine is increasingly purchased for personal, everyday consumption. The top 3 reasons for drinking wine in China are well-being (“Wine is good for my health”, 56%), relaxation (“Wine helps me to relax”, 51%) and personal enjoyment (“I like the taste”, 47%)2.

The normalisation of retail prices Increasing consumer knowledge and the advent of price transparency at online retailers has resulted in a general lowering of prices and a better price / quality ratio

More distinct regional tastes Regional differences in culinary traditions have resulted in geographically diverse palates: those in the North prefer dry and full-bodied wines, in the East fruity and rich, the South fresh and juicy and in the West, light and sweet2.

China taste map

Most of our audience’s questions centred on putting insights into practice: should the back label be in Chinese script or English? What do Chinese consumers like on the front label of a wine bottle? Chuan responded: “Consumers tend to prefer a translated Chinese back label on top of the original back label; its perceived to be more authentic than just a Chinese back label. As for the front of the label, the diversification of the Chinese wine market is making room for more modern, elegant and contemporary designs. Labels are now less dominated by traditional French-looking labels.”

And what can international marketers do to be more accessible to the Chinese consumer? “Understanding the Chinese culture is the key to connecting with Chinese consumers. The most common examples include using Chinese zodiac animals when appropriate, or using numbers that are believed to be auspicious in Chinese culture.”

With thanks to Wine Australia.

wine-australia (1)***

Sources:

1 Wine Intelligence China calibration studies

2 Wine Intelligence, Vinitrac® China, March’17 (n=1,000) Chinese urban upper-middle class imported wine drinkers


For more information about the Chinese wine market, take a look at our China Landscapes 2017 report.

For detailed information about consumer segmentation in China, our China Portraits 2017 report will be published this August.

Author: James Wainscott

Email: james@wineintelligence.com