By Jim Boyce
Alberto Fernandez has been running the China operations of Torres since the year 2000. I interviewed him about his take on China’s wine scene, Torres’ relationship with local winery Grace Vineyard, the preferences of Chinese consumers, the rapid growth of wine importers and imports, and more.
How did you get involved in the wine industry and with Torres China?
I started working with wine 11 years ago in Australia.
I went there on a working holiday visa and interned with a fine wine distributor in Sydney. I learned a lot, from offloading 20-foot wine containers (it builds muscles!) to handling iconic wine journalists and professionals in Australia.
After two years, I felt my time “Down Under” was over and new challenges awaited me in the “Old World.” My bet was right and a few months later I joined the export department of Torres winery in Spain. In May 2000, Torres sent me to Shanghai to be in charge of the company’s China operations, and I am still here. We have grown over the years from four employees to 120. I consider myself highly specialized in the Chinese wine industry since I have spent eight out of my 11 years in it.
Torres China has offices in Beijing, Guangzhou, and Shanghai. How do the three cities compare? Are there plans to open offices and sell wines in other Chinese cities?
We are opening a Shenzhen office in May and have “missionaries” spread about the country who work closely with our agents.
Shanghai is the largest and most sophisticated market in China, with boutique and expensive wines being popular. Things are changing in Beijing, with the Olympics approaching, but historically it has been a good market for inexpensive wines. Lastly, the primary cities in south China are a bit “traditional” in preferring wines by region, such as Bordeaux, but there is an eagerness to develop a wine culture that matches the region’s longstanding gastronomic traditions.
If we were to open another office in mainland China, it would be in a city where we could become pioneers in professional wine distribution. I reckon there are still some 20 good locations for that!
Where are the biggest markets for your wines? What kind of taste preferences do you see among Chinese consumers?
We specialize in famous family-owned wineries and now have 34 brands. Those appeal more to the on-trade channel, such as hotels and restaurants. Another important channel is “direct sales“â€” goods delivered to the consumer’s doorâ€”including orders made online.
I see Chinese tastes developing in line with those in other emerging markets in Asia. China is still a “red country” when it comes to imported wine, and people go for conventional labels and regions, again, such as Bordeaux. Wines that are sweeter tend to sell to beginners, but step by step consumers are also opening up to drier wines and to wines from newer producing regions. At the market’s high end, consumers are really going for iconic brands, and money seems not to be a problem.
What really worries me is the quality of locally produced wine, which accounts for most wine consumed in China. With the current trend on increasing production in the local wine-making industry, a trend that has been referred to as “70 percent ingredients, 30 percent technique,” millions of customers are far from having access to good wine. There are exceptions, such as Grace Vineyard, which we distribute.
I increasingly see Grace Vineyard wines in bars, restaurants and hotels. How did Torres’ relationship with Grace come about?
This is my personal contribution to the Chinese wine industry. I was able to put this Chinese wine jewel into the Shanghai and Beijing markets over five years ago. The story goes like this: one day in September 2002, I received a call from my good friend Xavier Tondusson (who I hope soon recovers from his recent injury). Xavier works with Bacchus Wines and told me he was at Brasserie Flo in Beijing and drinking an exceptional local red wine made by a French winemaker. The wine was from a new wine regionâ€”Shanxi province.
As winemakers, we at Torres have long had a big interest in local wine production, and even planted an experimental vineyard in Hebei in 1997, though it did not produce grapes of sufficient quality. Since I never trust the origins of Chinese-branded wines, I decided to visit Grace Vineyard in Shanxi the following weekend.
I could not believe what I had foundâ€”an undiscovered treasure, the China dream for making fine wines. Grace’s winemaker, Gerard Colin, received me with a big hug and briefed me on the Grace Vineyard project, which had come to fruition with the assistance of famous Bordeaux Professor Boubals, who was [Torres President] Miguel Torresâ€™ professor some 20 years ago! After, I met with the Chan familyâ€”which owns the wineryâ€”and since then we have enjoyed working to promote Grace’s wines, considered Chinaâ€™s finest by many people in the international wine media.
The passion for excellence in the vineyard is what has made Grace Vineyard wines different and distinctive from the rest in China. Genuine wines. Genuine aspirations.
Imported wine is pouring into the market and the number of importers is quickly growing. How do you think this situation will play out?
Competition is coming! Competition is healthy! I think we are heading toward a much more dynamic market where the big players will remain alongside a surge of many new companies bringing in interesting wines. How many wine lists are still identically boring in the major cities!? Both trade and consumers will be pleased to enjoy a range of wines unheard of before in China.
In terms of marketing, wine brands will be king, rather than the names of distributors. Most of our competitors spend most of their marketing budgets promoting their own company’s name in China, sometimes to the absurd point that their name is actually more important than the brands they carry.
Other than that, channels will expand and operate vertically, that is distribution will be controlled directly by those who produce or import the wine, all the way to the consumer. White wine sales will grow, wine clubs will go mainstream, joint-venture wine production in China will soar, wineries like Great Wall will need to reinvent themselves, and hopefully quality will be more important!
If you could pick one white and one red from the Torres portfolio for dinner, which would you choose?
Fransola Sauvignon Blanc andâ€”from our new project from Ribera del Dueroâ€”Celeste.
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