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140 WINES&VINES January 2016 MARKETING 140 WINES&VINES January 2016 All Eyes on the Chinese Market North American vintners look for best strategies and more sales at Hong Kong wine fair By Jim Gordon E xporting wine to Asia may seem like a far-fetched idea for North American vintners; that is, until they visit the region, get a sense of its burgeoning prosperity and the popularity of Western culture there including American restau- rant chains, 7-Eleven stores and even Wal-Mart. A smallish contingent of vint- ners from the United States and Canada used the Hong Kong Inter- national Wine & Spirits Fair in November to break into the Chi- nese market and wider Asian mar- kets or improve their existing exports. Exhibitor attendees from the U.S. numbered 27 and those from Canada numbered 10. At the bustling exhibition at- tended by a reported 20,000 trade members, owner Jeff Gordon of 25,000-case Gordon Brothers Cel- lars in Pasco, Wash., said he was impressed with how young and enthusiastic the trade attendees were. His and a handful of other Washington wineries built their own small pavilion and even shared it with an Oregon winery. Gordon hoped to increase his current level of shipments to China from 300 cases of red wine plus another 60 cases of white, and noted that buyers seemed es- pecially interested in high-quality reds priced at $100 per case wholesale or less. It was his first time at this show, though he had attended Vinexpo Hong Kong be- fore. Another Washington state vintner attending was Bob Betz of Betz Family Winery in Woodin- ville, Wash., who ships two pallets per year to China. While there was no California wine pavilion, a number of Golden State winemakers were pouring at booths sponsored by their Hong Kong importers or agents. Joseph Lange of Lange Twins and Layne Montgomery of M2 Wines repre- sented their Lodi, Calif.-based win- eries in a big booth where they stood next to European vintners to meet potential customers. A booth sponsored by the North Carolina Agriculture De- partment featured the wines of 7,500-case producer Rock of Ages winery in Hurdle Mills, N.C. The owner, Kevin Moore, poured wine for and chatted with an eager crowd of Asian wine buyers on the first day of the show. Moore has been in the wine business for 14 years and said he would try to set up distribution in Asia based on people he met there, acknowledging that it will take time. "In my experience you need to sell one bottle at a time," he said. Keys to selling wine in China The keys to selling wine in China can be summed up in a couple of simple phrases, according to a market researcher supervising a multiple-year study of consumer attitudes and buying habits there: "mental availability" and "physical availability." Vintners who give their wines both can succeed in sales with a growing demographic segment of grape wine drinkers in the Peoples Republic of China, according to Dr. Justin Cohen, senior research associate at the Ehrenberg-Bass Institute. Cohen was one of several speakers tapped by organizers of the Hong Kong International Wine & Spirits Fair to help educate the hundreds of wine producers and many more trade members who attended. Cohen's message to the sellers was to keep it simple, since China in particular is still a new territory for consumption of international wine types—even though the Chi- nese have a long history of drink- ing indigenous wines. "We're seeing a country de- velop as fast in a few decades as it took other countries centuries to do," he said. One effect of that growth was that imported wine became a symbol of prosperity and was bought often for gift giv- ing among business executives and government officials and to pour at lavish banquets. That practice became excessive and corrupt by 2012, according to the national government, which called for austerity measures. S a l e s o f h i g h - p r i c e d w i n e s dropped dramatically. While that drop discouraged wine traders, Cohen said it's not a bad thing in the long-term view. "Wine had been seen as some- thing only for the elite, but that is changing now, " he said. The focus has turned to the average con- sumer, including the younger gen- eration that now has disposable income and a small but growing interest in wine, he said. Study follows 5,000 Chinese consumers Cohen's organization is part of the University of South Australia, and the Australian Grape and Wine Authority sponsored the research. The study spanned three years KEY POINTS Winery exhibitors at the Hong Kong International Wine & Spirits Fair met with buyers from Asia to build a bigger wine business. Attendance by North American wineries was modest, but several vintners reported encouraging results. A market-research study presented at the fair provided guidance about how to win more Chinese customers. John Tsang, financial secretary of the Hong Kong SAR Government, announces expansion of a customs arrangement between Hong Kong and mainland China.