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How do red wine producers do it?
The emphasis on status has had affects on the sales of red wine in China. Bordeaux quickly became the most popular region because of the iconic wines the 1855 classification system promoted. Indeed, the greatest volume of red wine grapes consumed in China, according to Euromonitor International, in 2015 were Merlot and Cabernet Sauvignon, the two most prominent grapes varieties from Bordeaux. Due to branding and taste, the red wine industry began to prosper. Consequently, one must conclude that for other wines to succeed in China they must attempt to appeal to Chinese consumers in comparable branding to the premium French red wines. Clarets, for example, have a unique history and recognized quality. This has been advertised effectively to Chinese consumers.
Additionally, by assessing the efforts of wine makers, such a Cecil Park, one can comprehend alternative pathways to success. Park does not produce wines of a similar history to premium clarets. Indeed, her Californian blend is predominantly pinot noir, whilst being strongly supported by Syrah and petit Syrah with just a small hint of Merlot. Nevertheless, she is very aware that she must comprehend the exact tastes of her clients, depicting herself as ‘more of a listener than a talker’. Her aim is to find a ‘common language’ with her clients in Asia so that she can tailor her produce to suit their taste requirements. It is clear that those driving the red wine sector forward in China either push their branding or match the taste of their produce specifically to please their target audience. Sparkling wine producers around the world must take note if their wines are to flourish in China too.
Will producers of sparkling wine in China prosper similarly?
Although Guillaume Deglise, the CEO of Vinexpo, acknowledged that the dominance of red wines in the Chinese market would continue for the ‘near future’, it is clear that leaders in the sparkling wine industry from around the world are aware of what they must do. Indeed, Prosecco is an Italian sparkling wine that holds a specific geographical location and an established position amongst Italian wines more generally. With 70% of its produce sold abroad in 2014, it is appreciated globally. Such is the demand elsewhere that the UK’s prosecco market has grown 35% in the last two years. Giancarlo Polegato, the CEO of the prominent Prosecco producing Villa Sandi, however, has acknowledged that Chinese consumers still view the beverage as a ‘poorer version’ of champagne. A lack of information and branding is preventing Polegato from entering a ‘prime market’ and succeeding like French red wine producers. Moreover, Prosecco is a drink that could potentially appeal to Chinese consumers as it has a specific status, like many French wines, and has global popularity. Consequently, Polegato is intent to ‘engage with consumers’ to teach them of the history behind his produce and its distinctive flavor. This desire and understanding of the Chinese market orientation will be vital if his efforts are to be profitable. He wants to engage with consumers to promote Prosecco’s unique history, location, and taste. Perhaps with time and a maintenance of this attitude, premium sparkling wines, such as Polegato’s Prosecco, will be increasingly appreciated by the Chinese market.
The Chinese in the twenty-first century have consumed vast quantities of wine. This has, however, been predominantly red wines. Furthermore, the volume of red wine consumed in China is only meant to increase. Although sparkling wines have entered the Chinese market, it has never reached the level of French red wines and is also set to decline. From analyzing how producers of red wine have been so successful, one can see that they have understood very closely the Chinese market orientation. With status-focused branding and research-based blends, they have satisfied the tastes and ideals of Chinese consumers. Sparkling wine producers must adapt to the Chinese market orientation comparably. If they act appropriately on ambitions, such as those of Polegato, they stand a far stronger chance of generating profit and growth in the future.
Case Study: A client in the Wine industry
Daxue Consulting has conducted a price monitoring methodology for one of its client, wine producers and exporters. In order to provide the most up-to-date market intelligence, Daxue Consulting had monitored in-store strategies implemented on the Chinese market in tier 1 and tier 2 cities, with a focus on the pricing policies, regarding the origin, the size of the bottle, the year etc. A monitoring report was sent to the client every 3 months, including photos, prices, description and evolution of the products.
See also:
- How to sell wine to Chinese consumers ?
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