Pontyfications | Bordeaux’s China exodus, ‘passionate’ distributors & new niches

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Helene Ponty has partnered with distributors in fifty-plus cities in China to sell her family’s Bordeaux wine. She’s everywhere from “tier one” metropolises like Beijing and Chengdu to more isolated places like Heihe, a town of less than 100,000 that borders Russia. As a follow-up to our sprawling 2018 interview–The Full Ponty–I asked her about the current China market situation,

Shifting Attitudes

“Many people in France do not want to deal with China any more. Five or six years ago, when people were learning about what I was doing in China, everyone was calling me, emailing me, to get me to sell their wine here. Now if I try to find some wines to import to China, if I tell people l have this company in China, I’m selling in China, they look at me and go ‘Hmm, no thank you. I don’t want to sell in China. I’ve tried and I’ve stopped’.”

[She’s talking about wineries that produce, say, 300,000 bottles and have been active in China for five to ten years.]

Culture Shock

“[Bordeaux producers] feel the market is difficult to understand. A lot of people have had relationships with distributors that were all short-lived. They’ve invested money, they’ve invested time. They’ve done dinners and events, and they don’t really understand the culture. The volume hasn’t really been worth it. Instead, they can go to the UK or to the US. It’s easier — they can get a good relationship with their importer and the volume is pretty much the same.”

Falling Attendance

“I think there will be a lack of wineries actually wanting to go to wine fairs in China or to want to sell their wine in China. If importers are not going to fairs in France or Italy or Spain, they’re not really going to get access to many brands. That’s why I think only the bigger and more serious importers are going to be able to survive. I think the relationship between the wineries and China is going to change a lot — and has changed a lot already.”

Falling Imports

“Throughout 2018 and January 2019, we didn’t feel any difficulty. We really started to feel it in February although I know in Bordeaux there’s been a big drop and everyone has been very worried since last year. As far as the reasons for the drop, even though last year we were still growing, I was anticipating difficulties.”

Old School

“It’s already been two and a half years that I’ve been trying to help my distributors transition from being able to sell based on older ways, such as being introduced to someone and not really needing to know about wine, where the relationship and entertaining your client and inviting them to big dinners is more important than your wine knowledge, or even the wine quality.

“I’ve been trying to transition them from that to actually having to know about wine and having a sales strategy and being able to grow your company. A lot of importers and distributors are too anchored in their old ways. The consumer is getting more knowledgeable about wine and wants to spend their money in a smarter way.”

Double Dipping

“A lot of my clients have two businesses, they do wine and something else. And a lot of them are telling me they are focusing on the other business because wine is too difficult, wine doesn’t make enough money. Or they are starting another business because wine isn’t meeting their expectations.”

“Honestly, if I was your customer before and I see you are also now doing construction or selling electronics, well, I’m not going to feel very good about continuing to buy wine from you.”

Economic Anxiety

“In general, the economy isn’t necessarily doing bad, but people have it in mind that the economy is bad, so they’re a little bit worried, they’re putting their foot on the brake, they don’t want to spend as much.

“I can see it when my clients do dinners, they are having a little bit more trouble getting people to come, people don’t seem to want to be going out that much.”

Eager Distributors

“I think more than a kind of wine that is doing better, I see a kind of distributor doing better. My distributors who know about wine, who actually care, who don’t just see it as a business, as a way of making money, but who want to learn, to introduce something interesting to their clients, who want to have a company but also like wine as a hobby or a passion, these distributors have been doing better this year.

“Those people are trying to do something good and it’s paying off. And they’re selling to a younger crowd that sees their passion, that they want to do something and are trying to do it well.”

Bricks ‘n’ Mortar

“I’m expecting more wine stores popping up, particularly in second- and third-tier cities, because the wine store is something that’s still very non-existent in China.

“You have some in Beijing, you have some in Shanghai, but people don’t walk into a wine store and browse and think, “What should I drink tonight?” Younger people are beginning to do that, in shops like CHEERS, but people in smaller cities and people a bit older are not used to doing that.”

‘But I’m thinking with the consumer becoming more knowledgeable, wanting to try different things, I think people are becoming more open to the idea of just walking into a store and finding wine, I think they’re a little less worried about fakes and copycats, so I think wine stores are going to become a bit more normal and not just be showrooms.”

New Niches

“There are more opportunities for wines that didn’t have much of a market before, like the Clairet we’ve introduced. It’s a very niche wine in China. Rose is already a niche wine and Clairet isn’t even a rose, it’s a light red. It’s difficult to explain, it’s difficult to introduce, and still we sold out everything we brought in two weeks after importing it.

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