Go With The Reds

By Nusiness Beyond the Reef

I enjoyed yesterday’s Wall Street Journal article about China’s burgeoning appetite for wine. The wine press and Asian media have been filled with articles about Hong Kong’s rise as a wine auction site, fueled by demand from China. The United States is still the world’s largest wine consumer. Not on a per capita basis; that crown still belongs to France.

The Chinese drink about a bottle and a half a year, and 85% of that is locally produced wine with brands most non-Chinese have never heard of: Dynasty, Great Wall and Changyu. Actually, I have had whites under the first two brands – and they were so-so, supposedly designed to go with Chinese food. So I wasn’t surprised that 90% of Chinese wine consumption is red wines.

We saw that trend late in the 1980s in Taiwan when I was part of a U.S. negotiating team that convinced Taipei to open up its wine market to foreign competition. Before that, wine in Taiwan tended to be locally-produced rice wine. Not the same thing. Once the negotiations were done, American winemakers descended on Taiwan and wine tastings and tasting dinners were all the rage. We noticed a strong preference for red wines, and some of California’s small boutique cabernet producers were especially successful. Of course, there was the prestige market, with

Mondavi’s Opus One selling nicely.

There was a humorous downside to this. To really develop the market, we had to run demonstrations and put articles in local papers about how to use a corkscrew. I think China is now well past this. And, since wines were coming into Taiwan faster than corkscrews, we had to alert corkscrew makers to the new market. I also advised U.S. shippers to send out anything they had with a screw cap.

This was also the heyday of gambei contests in Taiwan, so American wine connoisseurs had to get used to the sight of fine cabs being gulped down by the glass-full. A heady experience, now blessedly in the past.

The WSJ article was an interview with Robert Beynat, who heads up the VINEXPO international trade show for wines. Mr. Beynat gave some sage advice for companies wanting to enter the Chinese wine market:

His advice? “Find the right distributor.”

“Going to Beijing to organize a tasting — that is easy,” he said. “But to sell the wine, you need a good relationship with a distributor/importer. They don’t have a system built yet in China for distribution.”