A Beijing success story, virus crisis wine trends, 2020 import customs data & more

Saw this photo circulating. It captured the moment.

[This is my newest Grape Wall newsletter, sent last night, April 6. I planned to release this content as a series of blog posts here but decided to instead post it all at once. I fixed some typos and awkward wording. Cheers, Boyce]

Greetings from Beijing,

Where new coronavirus cases have officially dropped to zero but life is still not “normal”. We’ve seen a major increase in car and foot traffic during the past week but people still wear masks, temperature checks are widespread and restrictions remain, such as no door-to-door deliveries and a maximum three people per table at restaurants. There is a mandatory 14-day quarantine for those coming to Beijing from abroad, with many ending up in the secondary cities to which their planes are diverted. Several wine trade people are stuck there now.

I’ve spent the virus crisis in Beijing, bunkered down at home with occasional trips for groceries and less frequent ones to wine shops, bars and restaurants. Things have been relatively calm: people follow safety rules, supermarket shelves are full, most anything can be delivered to home. International media have reported on xenophobia in China recently but incidents seem rare so far: I have experienced few issues in my neighborhood, although one shop in our apartment complex has a “we do not accept foreign friends” sign.

It’s been a tough year for the wine trade. The bulk of sales are still linked to entertaining, from company, holiday and personal parties to boozing at hotels, restaurants and bars. These were devastated when gatherings were banned and venues closed. But life goes on and we see new trends emerging, and even sales returning as more venues reopen and customers come back.

More on that below, along with notes on virus crisis wine trends, a case study about an owner who lost 95% of revenue and fought back, and wine-related examples of how I’ve stayed sane during the quarantine.

Also, I just saw the Customs stats for January and February: year-on-year imports for bottled wine are down 25% by volume and 22% by value. This is on top of drops of 11% by volume and 14% by value in 2019. Given the vast majority of restaurants, bars and hotels were shut or underutilized in March, and the amount of unsold stock in the pipeline, don’t expect a quick rebound. (But do expect a Grape Wall post in the next day or so re these numbers.)

I also have more posts coming, including details on tariff relief for US wine importers in China, an update on fake wine, and Q&As, including with Wang Shenghan aka “Lady Penguin”, who has over two million fans on video app Douyin. You can also see past posts, including on the Champagne Deutz (Duh-tz?) controversy.

I wish I could write more but I also face economic reality, so if you find the newsletter and blog useful, consider contributing to help cover my domain fee, hosting and other costs and to keep the stories flowing. You can contribute via WeChatPaypalcredit carddebit card or bank transfer (contact me).

Thanks to Amy Lee for the donation last month!

On to the newsletter. I hope everyone is safe out there.
Jim Boyce
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Quick notes on the China wine scene during the virus crisis.

Home drinking. Sales in China still rely on entertainment-driven drinking–bottoms up!–so a rare silver lining of the crisis is people drinking at home, mainly because that’s where they’ve been stuck. Distributors shifted hard to delivery mode and the dozen-plus I talked to report customers ordering and drinking more at home simply for pleasure, long a dream for many in the trade. The question is to what degree this will continue when more familiar social drinking options are fully available.

Lifestyle: My belief is home drinking won’t come close to challenging social drinking for volume but some of this “lifestyle” consumption will continue, including by those people who have invested in high-end wine glasses, wine preservation systems and other tools. We’ve also seen further normalization of ‘cloud wine’ sessions, where friends at home connect and drink with each other via video. And we’ve seen a general boom in creativity and exploration in the kitchen, one the wine trade should leverage. My WeChat feed is full of people posting pics and enthusiastic messages about making their first cake, ice cream, pizza or [insert dish name]. That includes me!

Prices and packages. Lower prices seem to be the lone strategy for boosting sales for many importers and distributors. The craft beer, spirits, and cocktail bar trades appear far more adaptive in adding new products, including single-serving options, and teaming up with restaurants on food and drink specials. And with more creative promotions. One craft brewpub announced a route in Beijing, took its beer kegs mobile, and customers along the way could come out of their apartments and fill up a growler. Another sourced craft beers from a half-dozen cities, including Wuhan, and sells them as a six-pack with commemorative cans. The wine trade has just mostly lowered prices. It’s a bit underwhelming.

Where we do see some more creativity is in packages. One of the best in terms of fun and value has been Sommelier International, driven by the relentless Vicente and Emilio Muedra. They’ve done wine themes like Australia, Spain and organic. Numerous packages feature wines rated at least 90 points and costing less than rmb100 (US$14) per bottle. One had sparkling, rose, white and red wines, a nice starter pack for people to enjoy at home while they are learning all those new dishes in the kitchen. I’ve received good feedback from readers who’ve purchased these packages.

Online. The entire trade seems to have boosted its online presence in a fight for eyeballs. Trade publications like Yunjiu feature a steady stream of seminars, many focused on how to economically survive the virus crisis. Everyone from wine importers to trade groups to local producers to educators, ranging from highly certified to newbie, are pushing online seminars, lessons and often (too?) highly stylized video series. This topic is vast and I’ll post separately on it, including the degree to which it results in sales.

Loyalty. Importers and distributors who already established personal links to customers had an extra edge come the virus. Most companies lack the scale of well-known players such as ASCTorres and East Meets West and survive with narrower niches. For example, I’m in WeChat groups, with 500-person limits, organized by individual retailers / distributors, where members get a flow of wine info, memes, deals, customer banter and so on. A sense of trust and loyalty grows in such groups and I have seen it translate to sales during the crisis. Those who nurture their clients, and give good prices and service, have an edge, one that in some cases might mean survival.

Food Fighter

Imagine starting 2020 with four notable restaurants beneath your belt. Two are fine dining. One is set in a stunning Beijing temple’s grounds and, after a decade of blood, sweat and tears, just won the reader’s choice for “world’s best restaurant” from Trip Advisor. The other is across from The Forbidden City, and a favorite of both tourists and long-term residents. And there are two casual dining venues, one established and perpetually packed, the other new and full of promise.

Imagine starting 2020 with those restaurants four beneath your belt. Then getting punched hard in the gut by the coronavirus crisis.

That’s what happened to Ignace Lecleir of TRB Group. In early February, Lecleir told me his revenue was down 95%. Just one of his four restaurants, casual dining venue Hulu remained open. The other three–TRB Forbidden CityTRB Hutong and Merci–were shut. With staff to pay, including many quarantined outside Beijing, and prospects for rent relief an unknown, the situation looked dire.

One might easily wonder, given the outside world felt far safer two months ago, if Lecleir regretted moving here in 2007 to open Maison Boulud, the Beijing branch of Daniel Boulud’s New York-based empire, for the Olympics. Then again, anyone who turned a temple-turned-TV factory into one of the city’s premier restaurants — TRB Hutong — while facing a decade of rumors the place would be shut any day is unlikely to look backward. So it was with the virus crisis. Lecleir was like the guy who rushes into a burning house to save someone on the second floor. What was the alternative? To idly watch the carnage unfold?

Here’s a timeline of some of what Lecleir and his team have done since this revenue crisis, with ramifications for the wine trade..

February 5: Launched a custom-made delivery program for Hulu’s food and drink menus. Rather than use a third-party delivery company like the vast majority of restaurants, he created a team from scratch, including staff from the closed restaurants.

This was partly for safety reasons as it gave him control of his product from kitchen door to customer door, with no need for the ambiguity of a third party. The program served an area first within 3 km, then within 6 km, of Hulu. Prices remained the same, there was no delivery fee, and Lecleir added the same special touches for which he is known. (My last delivery included a free bag of madelaines and a vase with a fresh rose–see above–that is on my desk now.)

In terms of wine, options started at just rmb88 (US$12) per bottle.

February 17: Launched the same program in Shunyi, a suburb housing many well-to-do residents but relatively few delivery options. Lecleir rented part of another restaurant’s kitchen and began delivery within a 10-km radius. A wine trade friend who lives in Shunyi ordered from Hulu and told me Lecleir himself showed up with the delivery, part of testing the system, and gave him an extra bottle of wine!

February 22: Started “cleaning the cellar” and putting out dozens of bottles of wine daily at Hulu, priced rmb150 (US$21), for drinking in store or takeaway. On any given day, you would have picks from Portugal, France, Chile, the U.S., Spain, China and elsewhere. Superb value for that part of town, and for those consumers determined to go out.

February 23: Launched new dishes, including more Asian-themed ones, to broaden the menu’s appeal and give regulars new items to try. Dishes like Thai Coconut Chicken Curry and Gongbao Chicken are still on the menu. Lecleir also continued regular updates of Hulu’s popular “Power Lunch”, which gives people the choice of three appetizers, three mains and three desserts, plus a drink, delivered for rmb98 (US$14).

February 28: Launched a wine package delivery program, with six options, from rmb150 (US$21) for two bottles. (In that particular case, both labels are imported by Lecleir and thus give extra value.) Themes included Australian Shiraz, sparkling, Italian, “Old World” and Burgundy. This helped importers / distributors who have seen restaurant / bar sales go bone dry. Lecleir doubled as a sub-distributor and provided much-needed revenue. The image above is one of several package options launched.

March 2: Continued to create new “power lunch” menus each week to give regulars fresh dishes to try for delivery. Featured a one-week Duvel delivery promotion — one kuai (14 cents) per bottle.

March 7: Launched another set of wine packages, themes including Cabernet, organic, Tuscany and Champagne. The prices ranged from rmb150 (US$21) to 888 (US$127).

March 12: Did an early Spring opening of Hulu’s terrace. The terrace, like the restaurant, is limited by a three-person-per-table rule, but nevertheless added more capacity. (I spent a chilly seven hours there one evening drinking wine, content to trade warmth for conversation with friends.)

March 19: Reopened TRB Forbidden City, thus adding a second in-house dining venue.

April 2: Prepared to launch a cake delivery service. Offered free cakes to the first dozen people who requested one in Hulu’s WeChat groups, which meant feedback and treated fans, before letting these sweets loose onto the market.

April 4: Launched six more wine packages, including themes such as Sicily, New Zealand, Champagne and “fruit bombs.”

I know I missed some events in there but you get the idea. It’s a testament not only to Lecleir but to the strong team at TRB Group. And the results are good: about three weeks ago, Lecleir told me delivery revenue had surpassed in-house. Was it as profitable? I didn’t ask. But as he reopens his restaurants, he also now has new sources of revenue and, of special interest to this site, is moving wine.

Bottled Up Inside

Some trade people advised me to spend my quarantine time studying, with one arguing it was a good chance to “get ahead” of others. I dunno, that kind of attitude is why I am wary of the vintelligentsia. Instead, I spent my time on not-getting-ahead activities, including these three, to help preserve my sanity.

1 “Cloud wine” tastings, where up to nine friends can simultaneously video conference on WeChat. I’ve done such sessions not only for wine but also for lunch meetings, an “ice cream for breakfast” event and happy hours with friends worldwide. It does feel weird to open a bottle of wine of Domaine du Meteore (apocalyptic name!) at 7 AM to do a happy hour with friends in New York, 7 PM their time, but such is quarantine life. And it’s been comforting to reconnect with friends to share experiences, trade tips and recount old stories.

Cloud tastings can be useful for wine companies, too, to keep in touch with customers and even connect them with winemakers overseas. There are lots of tasting options, from sending participants the same wines to taste and talk about or simply having people grab a bottle out of their home stock, maybe based on region, style, grape variety or vintage. The sessions can get sloppy as people talk over each other but are usually fun.

2 Home wine pairings. Given all of the wine I stocked for Chinese New Year holidays went unused, and given a steady flow of home meal deliveries, I’ve been doing pairings and sharing them with friends and readers on WeChat, and receiving informative and often funny feedback in return. I won’t go into every pairing but fun ones included Enclos de Viaud from Bordeaux with egg McMuffins (see above), a nice match for the toasty muffin and its creamy and cheesy contents.

That wine did double duty as I saved some from breakfast and paired it with a lunch that included mushroom risotto from Hulu.

And, a final pick, “shao mai” pesto pasta with fruit-forward Chinese New Year wine from Grace Vineyard in Shanxi. I didn’t have any shrimp for this dish so I used shrimp-topped shao mai. Hot tip: steam shao mai over the boiling pasta water. Yes, efficient cooking at Maison Boyce.

I read a dozen pairing suggestions for pesto, lots of them for white Italian varieties, but I felt like opening a fruity red. (Another hot tip: open whatever wine you feel like.) Given previous Grace Chinese New Year wines have been light, fresh and fruity, I cracked open my lone bottle. It fit the trend but with an extra touch of spice. Was it a perfect match? Perhaps not, but it did pair pretty well and, with nice food and nice wine, I’m good.

3. Pairing buyers and sellers. On one hand, I had lots of friends and readers stuck at home and in need of libations. On the other, I know lots of retailers and distributors whose hotel, bar and restaurant sales disappeared and needed revenue to survive. In general, I post dozens of deals per week on my social media feeds. In particular, if I get direct requests, I connect the consumer to wines and distributors they might like.

My favorite case was a quarantined guy who gave me a rmb5000 budget and asked me to surprise him with deliveries. He had no idea what was in each of the boxes showing up at his place It took ten days of hemming and hawing to spend the money, given I checked with over a dozen distributors, and I ended up sending 20 bottles.

Six bottles from Canon Fronsac producer Ponty, as owner Helene Ponty has been one of my favorite interviewees over the years — see here and here — and her wines offer good value. (I was also able to get a member discount and the “free Clairet offer.”) The mystery buyer got a white (Blanc de Grand Renouil), four reds (Petit Renouil, two Cos Virolle, Grand Renouil) and that tasty Clairet. (Bordeaux represented!)

Six bottles from Grace Vineyard, China’s veteran quality wine producer. I sent entry-level and reserve bubblies, so he could contrast them, plus a trio of reserve reds, one Cabernet and two Aglianico– I believe only Grace is using this grape variety in China. And a bottle of that widely selling second label, Deep Blue. I’ve had mixed feelings about that wine over the years but do like the 2017. (China on the map!)

Six bottles from Shi Bai Pian, a quality wine producer just outside Beijing and poised to be a top story this year. I’m a big fan of the “Mastery” Pinot Noir 2017 and Cabernet Sauvignon Reserve 2014, and got two bottles of each, along with a pair of Chardonnays–the crisp fresh “Mastery” and the more butter-y reserve level. These wines just came on the market at the end of 2019, and are not easy to find, and I had to work with winery president Richard Li to get it done. (Exclusivity!)

Finally, two bottles of Tempranillo from Rodriguez & Sanzo, aged in whisky barrels. I got these from Carlos Miranda, who has been posting lots of useful stats and trade show info over the years, because the mystery buyer cited a preference for “big” wines. These seemed worth the risk. (Wildcard activated!)

I don’t have full feedback, but so far Shi Bai Pian Cabernet and Rodriguez & Sanzo Tempranillo got thumbs ups. It also turns out you can live vicariously through another’s wine orders!

Old Is New?

Nothing or everything is new in this next anecdote, depending on how you see the world. It is about how a wine experience in Beijing during the coronavirus crisis underscores the role tech plays in sourcing, purchasing and enjoying this fine beverage. From online ordering to sharing via video with distant friends, things are starkly different from how the world worked a decade or two ago. Tech is all-encompassing in this anecdote and to me it still feels new.

Three weeks ago, while walking my nearly deserted Beijing neighborhood, I exchanged WeChat messages from Claudia Masueger, CEO of the China-based wine chain CHEERS. Masueger was stuck in Switzerland and we shifted from text messages to voice and talked, while I walked, about what was happening on the ground here in Beijing. I’ve interviewed Masueger often over the past six years and we shared ideas with ease despite being thousands of miles apart.

As I entered the mall where I buy groceries, I pinched the phone between my shoulder and ear as a guard took my temperature while I wrote my name and phone number on a registration sheet. (34 degrees–sounded a bit low!). I stayed on the line because CHEERS has a shop a few meters inside the door, one that had been closed more than a month, and I wanted to give Maseuger a live report.

Yes! The shop had reopened, just the day before! I switched my phone camera to selfie mode so Masueger could see me and the shop manager. Greetings were exchanged, an impromptu hello session that would have been novel not long ago. While I talked with Masueger, she decided to help the shop and transferred rmb200 to me to spend there. That money arrived in my WeChat wallet in seconds and ten minutes later I spent it, and some of my own, on three bottles of wine.

Within an hour, I’d provided on-the-ground updates to someone on another continent, made a surprise video connection with a store manager, and accepted and spent cash for wine. On top of that, I posted the details of my purchase on my social media timeline for thousands of people to read, with a poster / link for a deal on one of the wines that I bought. And I would soon have one of those wines open at home for a video “happy hour” with friends in New York. Maybe I’m getting old, but even though such tech is normal now, I continue to find that the speed and ease of this stuff amazes me anew. And it’s certainly made life easier during the coronavirus crisis.

Finally, a moment of normalcy. Last Sunday, I helped organize a wine tasting, with social distancing characteristics, with Frank Siegel, who is often credited with opening Beijing’s first non-hotel bar, Frank’s Place in 1990, and held weekly wine tastings for years until 2011. Call it a much–needed blast from the past.

The rules: a maximum of nine customers, three people per table max, and loads of snacks. We tasted Chinese and Australian Chardonnay, Pinot Noir and Cabernet-Merlot side by side. I brought entry-level bottles from Shi Bai Pian, the winery founded just outside Beijing in 2006 that finally began releasing its wines last year. Siegel sourced Australian wines from Oakridge, distributed in China by The Wine Republic.

Despite a small crowd, and a consciousness of the ongoing virus threat, we had a lot of fun and energy in the room. It’s the old “you don’t appreciate something until it’s gone” thing. We could sense stylistic differences between the Australian wines (clean, pure, technically proficient) and the Chinese ones (more aromatic, textured, unique). Later, we opened a higher-level Merlot from Shi Bai Pian as well as a bottle of 2013 red from Helan Qing Xue in Ningxia. It felt weird to be wondering if the oak on that Ningxia wine was better than most from the region, when just a month ago a tasting like this seemed unthinkable. Given 2020 so far, maybe weird is a good place to be. Ganbei.

Jim Boyce
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