Grape Wall of China

Posted by admin at December 6th, 2007

- By Dan Siebers

In part 3, I discussed some facts about importers as well as kinds of importers, including independent foreign-owned, independent locally owned, independent Hong Kong-owned, Chinese wine companies, and “cowboys.”  In part 4, I look at brands.

Here are some facts about brand distribution:
- The largest imported bottled brand in China in 2005 totaled 37,000 9L cases.
- The largest imported bottled brand in China distributed by an independent company, instead of the brand owner, in 2005 totaled 25,500 9L cases.
- Most key international brands (Penfolds, Wolf Blass, Hardys, Mondavi, Beringer, Torres, Mouton Cadet, Georges Duboeuf, Antinori) totaled under 10,000 9L cases in 2005.

Now, here are some “soft facts” on brand distribution. In particular, there are cases that might be labeled “the dangers of success.” Take as examples the experience of Canadian Ice Wine and of a Bordeaux brand in China.

In terms of Canadian Ice Wine, there were relatively large imports into China several years ago. Then, the market was severely damaged by fakes and imitations.

With a Bordeaux brand, a heavy marketing and distribution campaign made it relatively well-known across China. Then, the brand’s image and pricing structure was severely damaged by fakes, a situation exasperated, and possibly facilitated, by a distribution network based on wholesalers.

The advantage of wholesalers is that they provide instant access to their market geography and/or segments, prepayment terms, and single deliveries to the wholesaler’s warehouse. Their disadvantage is a lack of control of pricing and marketing, lack of proper storage and inventory control, and frequent treatment of the product as a commodity.

It is extremely difficult to stop supplying wholesalers as they will often use parallel or produce imitation products. In the case of the Bordeaux brand, a distribution network based on wholesalers allowed counterfeit products to instantly enter the entire distribution network. Some people theorize that it is the wholesalers themselves that develop and produce the fakes in order to save margin.

On Tuesday, part 5 of the series, covering distribution and “landmines” to avoid.

Posted by admin at December 6th, 2007

- By Jim Boyce

Thanks to the persistence of Adam Steinberg at ASC Fine Wines, I attended the media tasting with Australian wine guru Jeremy Oliver at Hilton’s recent two-day Food & Wine Experience in Beijing. Sponsored by the Australian Wine and Brandy Corporation, with wines supplied by ASC, the seminar outlined a new approach to how Australia explains its wine. This is a handy alternative for those who have neither the memory nor inclination to grasp the nuances of regional wines and varietals.

Oliver explained the four “personalities” of Australian wine:

Brand champions: labels that have “been extremely successful for Australia around the world”, whether in the United States, Europe or elsewhere, he says. They are simple and provide consistent flavor at an affordable price. We tried Wolf Blass President’s Selection Chardonnay 2004 and Penfolds Bin 8 Cabernet Shiraz 2004 as examples. Yellow Tail also fits into this category.

Generation next: this represents the “change, evolution and energy” of Australia’s wine industry, and includes unique grape blends. We tried Torbeck The Steading 2004 and Brown Brothers Cienna 2006. Glaetzer also fits into this category.

Regional heroes: labels such as Coonawara Cabernet, which are pricier and of higher quality than brand champions. “The trend has been to drink it ourselves,” says Oliver. “Now it’s time to share it with the rest of the world.” As examples, we tried Petaluma Riesling 2006 and Saltram Mamre Brooke Cabernet Sauvignon 2004.

Landmarks: these rank among the “elite and iconic” wines. “We understand that the best Australian wines sit very comfortably with the best wines in the world,” says Oliver. We tried Leeuwin Estate Art Series Chardonnay 2004 (beautiful stuff!)  and Penfolds Magil Estate Shiraz 2004.

This explanation of Australian wines seems particularly useful in China, where consumers typically associate wine in terms of countries (especially France) rather than regions (with few exceptions, such as Bordeaux). Even better, the seminar was just before lunch, a perfect time to test our tastebuds.