Chinese market moving past Bordeaux

China is no longer only about classified Bordeaux with the middle classes driving demand for entry-level wines, opening up the market to other exporters for the first time, says the CEO of Vinexpo, Guillaume Deglise.

“Up until 2012 wine was not consumed, it was purchased for status and as a gift”, explained Deglise speaking to the drinks business this week. “Whereas now we see wine consumed by the Chinese consumer, especially by Chinese middle classes, which is totally new. This means also that the wines are not the same, especially in value. Before wines consumed were mainly classified growths and high value wines. Now we are talking about more entry and middle-level wines, which creates many more opportunities for wine exporters, not just Bordeaux.”

Of the top 10 wine consuming countries in the world by volume, China (including Hong Kong) currently places fifth and is expected to show the second biggest growth between 2015/19, second only to Russia, according to figures released by Vinexpo in partnership with the IWSR.

In 2015 China consumed 149.2 million nine-litre cases of wine. This is predicted to reach 154.8m in 2019, representing a 3.8% increase during the 2015 to 2019 period. This growth rate was second only to Russia, which is expected to increase its consumption by 6.5% during 2015 to 2019 to 92m cases. By region, Asia Pacific is expected to show the biggest growth of any region during 2015 to 2019, adding 20.5m cases overall – a rise of 1.5%.

Growing diversity

The biggest opportunity within the Asia Pacific market however is for imported still wines in China and Japan, which by volume are expected to increase by 16.1% and 17% respec
tively from 2015 to 2019. Currently imported wines account for about 20% of the Chinese market.

“The Chinese consumer now is more into price and gaining knowledge, whereas before it was a question of packaging and price”, said Deglise. “It had to be expensive to be good. Now it’s all about entry level pricing and that will help to drive volumes. Bordeaux is still a very hot name in China, but it’s not just the classified growths anymore. It’s about the entry level Bordeaux as well.”

Referring to growing diversity among imported wines in China, and an apparent shift away from traditional Bordeaux, Deglise said: “I was in Beijing and one individual said drinking classified growths now, when you are a wealthy individual, is actually a bit passé. There will be new trends coming up and I’m sure that Italy will be one of them because they also have some very luxury wines, but also other countries will become successful in China.”

Guillaume Deglise, CEO of Vinexpo

Italy focus

Italy is due to be the guest of honour at Vinexpo’s Hong Kong exhibition, which will run from 24 to 26 May. It’s he first time that the fair has named a guest of honour since its inception in 1988.

“We have planned a number of events to help [Italian producers] do more business in Asia”, said Deglise. “Italy is the largest wine exporter in the world bit only the 5th biggest in Asia and 6th in China. So it has a long way to go in Asia. That’s why we decided to push Italy.”

As part of this push, Vinexpo will he hosting a conference on Italian wine in Asia, will feature Italian restaurants inside the HKCEC and will be hosting Apperitivo Italiano – a party after the show for producers and distributors to network.

Representing the market’s growing diversity, the Hong Kong show will also have a day dedicated to Shiraz/Syrah with a lecture entitled “Can Shiraz become the next trend in Asia” due to take place on 26 May.

“The Asian markets are very much driven by Cabernet Sauvignon and Bordeaux blends”, said Deglise. “We wanted to talk about another grape variety and explore the opportunities of this grape variety in Asia. It’s good one to get closer to Australian producers but also to help Rhône producers expand their business in Asia. The Asian wine business is dominated by French wines and Bordeaux blend varieties, but we believe the Rhône has an important part to play in the future.”

All white in China?

When asked if any white varieties could one day make an impression in China’s red-dominated market Deglise is optimistic, but realistic.

“I don’t see a change in the near future”, he said, “but maybe in the long term. Look at Japan, which is now 30% white wines. But red is so strong in China. It’s so symbolic of good luck and white is the colour of death, so it’s very difficult to promote white wines in China. Maybe the white category will be helped by sparkling wines, because sparkling wine is increasing in China, but it’s mainly consumption in big cities and clubs.”

Around 17,000 visitors and exhibitors from 45 countries expected to attend Vinexpo Hong Kong in May.

“What makes Vinexpo so special in Asia is that the top brands are exhibiting”, said Deglise. “They don’t get to come to all the exhibitions but Vinexpo is the key platform to meet with customers. Vinexpo is a French company but we are not only promoting French wine but all wines of the world.”

Its focus on the Chinese and Hong Kong markets will be reinforced by a conference on 24 May discussing the Chinese wine industry.

“The Chinese market is changing very fast”, said Deglise. “Every two years we are back in Hong Kong and every two years we can see that the market has changed and new perspectives arise.”

One to Wine

A key feature of this year’s fair will be its “One to Wine” service, a free service whereby Vinexpo organises meetings between exhibitors and buyers. The service made its debut in Bordeaux 2015 with 1,500 meetings arranged, and will roll out at the Hong Kong fair in May.

“Chinese buyers are sometimes quite shy”, said Deglise. “They don’t always speak the same language, so having an arrangement set up makes life easier for them. I think Vinexpo is the only company to do that in the wine business. We expect it will be very successful this year in HK as it was in Bordeaux.”

For more information on the fair visit vinexpohongkong.com