Issue link: http://winesandvines.uberflip.com/i/437909
116 Wines&Vines January 2015 sales & marketing I n recent years the United States was named the No. 1 country for wine imports, but some domestic wineries still yearn to diversify their consumer base beyond U.S. borders— and for many of them, overseas markets are the final frontier. For West Coast wineries—and a surprising number of Midwest and East Coast wineries—the logi- cal first place to look overseas is Asia. And with 1.3 billion inhabit- ants rushing headlong into the middle-class, China commands the most attention. To take a look at the potential as well as the pitfalls, Wines & Vines attended the Hong Kong In- ternational Wine & Spirits Fair this past November and spoke with representatives from a number of North American wineries about their experiences and expecta- tions of marketing in Asia. What recession? While China is looking at its slowest rate of eco- nomic growth since 2009, the country is still experiencing 7% growth. The decline led by housing and infrastructure is also taking a toll on luxury goods—including higher priced wines. In early 2013 China launched an austerity campaign to crack down on government waste. Among the casualties have been government- sponsored conferences with "empty speeches" serving as the pretext for extravagant dinners. This effort hit luxury hotels hard (some 50 hotels have asked to be downgraded from five stars to four stars, as the government frowns at holding meetings in the best hotels) and high-end wine sales. Wine inventories were high at the end of 2013, and the subsequent working down of inventories has suppressed sales. Luxury goods in general are taking it on the chin, which may explain why Chile has leapfrogged over Aus- tralia and Italy become the second-largest for- eign exporter of wines to China (France KEY POINTs As other countries try to capitalize on the thirst of U.S. consumers, many domestic wineries are considering sales abroad. A handful of U.S. regional associations banded together to send a delegation to the Hong Kong International Wine Fair. Engaging an export firm, distributors and retailers are all ways to get wine into the hands of Chinese consumers without having a staff there. Door to China Still Open Economic growth continues as Chinese distributors sell through back wine inventory By Dave Bayard A woman samples wine from New York state during an educational session at the Hong Kong International Wine & Spirits Fair in November.