Wine importers to China up 200%

The total number of wine importers to China is up 200% in the last five years according to a new report by Rabobank International.

The research entitled China Wine Market – Mind the Gap identifies the difficulty for a number of global brand owners to bridge the gap between the overall growth of the market and the opportunities they face in conventional market channels.

Supply of grape wine have risen 14% year on year to roughly 1.4 billion litres in 2011. Of which 17% (or 241 million litres) was foreign bottle wine, a 65% increase yoy.

Both domestic and foreign wine companies continue to grapple with how to most effectively identify, reach and communicate to an ever changing consumer base.

In terms of the opportunity offered in China, the Rabobank International report shows that the region is still an emerging market.

The report stated, ” Wine has taken some share from premium Chinese baijiu producers, a local white spirit, traditionally consumed and offered during government and business entertainment gatherings.

“Attracted by the strong volume growth and sound margins being observed in the imported wine market, the total number of importers is estimated by China customs to have reached 3,863 companies in 2011. Up around 73% from a year earlier.

“Wine is well positioned for the future with a growing number of a younger (between the ages of 20-39 years old), more affluent consumers who are increasingly exploring wine as a viable alternative.”

However there is a warning, especially concerning domestic Chinese wine companies.

“While the growth story remains intact, suppliers are cautioned to be mindful of a number of apparent  gaps. Chinese domestic wine companies have been largely caught off-guard by competition from foreign wine imports,’ the report added.

“However they are restructuring their businesses to ensure they aren’t denied their share of the market’s future growth. Just as in the US, domestic companies are uniquely placed to use their business networks, market intelligence and distribution reach as a powerful platform to promote the category – including foreign wines – to Chinese consumers.”

Picking up on another emerging trend in Asia the Rabobank report predicts that brands are expected to become increasingly important to consumers in the grocery, hotel and restaurant channels.