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Lesser-known Drink Brands Continue to Persevere at ProWine China

While securing import orders remains a problem for all but the most well-known wine marques and spirit brands, the mainland is now gradually opening up to less high-profile alcoholic beverages, including Madeira and Armenian brandy.

Photo: ProWine China 2017: Toasting the expansion of the mainland drinks market.
ProWine China 2017: Toasting the expansion of the mainland drinks market.
Photo: ProWine China 2017: Toasting the expansion of the mainland drinks market.
ProWine China 2017: Toasting the expansion of the mainland drinks market.

The origins of ProWine China can be traced back 24 years and 8,859km to the German city of Düsseldorf circa 1994. It was then and there that ProWein – now one of Europe's leading events for the drinks' trade – was first held. It wasn't until 2013, however, that its organisers decided to export the formula to Shanghai, with sister events now also running in Hong Kong and Singapore.

In 2016, the mainland iteration of the event attracted 12,431 visitors – of which 10% came from outside China – as well as 650 exhibitors from 37 countries and territories. For 2017, the signs were that the show had blossomed, with a 20% increase in the exhibition area and a concurrent rise in the number of exhibitors.

For Guillaume Deglise, the Chief Executive of Vinexpo, the Bordeaux-based company that is ProWein's primary rival, the success of such events in Asia is no surprise. Assessing the potential of the mainland market alone, he said: "China is set to become the world's second-largest wine market by 2020. Its consumption, though, is still relatively low in terms of population, with a per-capita level of just 1.34 litres recorded for 2016.

"In total, there are said to be 38 million wine drinkers in China. Despite this, in popularity terms, it still lags behind a number of spirits, most notably baijiu, whisky and brandy."

Regardless of these impressive numbers and the clear potential of the mainland market, making inroads in China is far from easy, particularly for the lesser-known brands. While the premium Champagne marques, for instance, are often a wilfully ostentatious feature on the tables of many Chinese nightclubs, many smaller- champagne producers have struggled to gain similar acceptance.

One clear casualty of the mainland's big-brand fixation is Aspasie, a family-owned Champagne house in northeast France. Despite this being the third time the company has participated in the Shanghai event, it was candid about its frustrations at its slow progress in the mainland market.

Summarising the difficulties the company has faced to date, Export Manager Caroline Ariston said: "If you're not a famous brand, it's even difficult to find a willing importer. Overall, though, the biggest problem is the market's relative lack of sophistication, with many Chinese consumers thinking that all Champagne tastes the same.

"This year, though, we are here to show who we are, just where we are positioned and why we taste different. I believe we are about to make our big breakthrough, but getting to this point has taken a huge investment in terms of both time and money."

Avanzi, a family-owned wine producer from the Lake Garda region of northern Italy making its second appearance at the event, had a similar story to tell. According to Export Director Nicola Avanzi, the company had made a number of mistakes when it first eyed the China market, particularly with regard to talking to importers who were solely concerned with low price points.

While conceding that wines from the Lake Garda region remain largely unknown among mainland tipplers, she was confident that the company's export prospects were looking up, saying: "In the past, we primarily serviced our domestic market. Now, though, 60% of our output is exported and we are on sale in 18 countries.

"In terms of China, usually when we exhibit at trade events we line up appointments with various key people, but this has previously proven virtually impossible with regard to this particular event. This year, though, has been much better and we are confident that we are meeting the right people."

One company that seemed to be encountering far fewer difficulties during its debut at the event was Alexander Valley Vineyards, a Californian producer exhibiting in its home state's pavilion. Having recently upped its production levels, it was understandably keen to secure new export orders, with China topping its target list.

Clearly undeterred by the reputedly difficult local market, Harry Wetzel, a Partner in the family-owned business, said: "There are clearly a lot of opportunities on offer here and not all of them relate solely to China. We had one guy from Portugal who was interested in importing our wines back to his home country and to Russia."

In the past, the majority of the company's wine was distributed in North America, with California and Texas alone accounting for 50% of its annual sales. Following its capacity upgrade, it now produces two million bottles a year, with Cabernet Sauvignon accounting for a slim majority.

While the presence of a Californian pavilion would surprise few experienced wine-show-goers, stumbling across a similar cluster of Armenian winemakers might be a little less widely anticipated. Although this former Soviet republic may not be entirely synonymous with wine production, it does have one particular viticultural claim to fame – roll back some 6,000 years and it was, apparently, the birthplace of wine. As exhibit A in this seemingly unlikely claim, the country cites its stewardship of the world's oldest known wine cellar, which dates back to about 4,100 BC.

Photo: Karas: Counting on geographic proximity.
Karas: Counting on geographic proximity.
Photo: Karas: Counting on geographic proximity.
Karas: Counting on geographic proximity.
Photo: 1887 Unicis: High-end Armenian brandy.
1887 Unicis: High-end Armenian brandy.
Photo: 1887 Unicis: High-end Armenian brandy.
1887 Unicis: High-end Armenian brandy.

Although 2017 saw the Armenia pavilion putting in its first appearance at the show, at least one of the country's producers – Karas, a 15-year-old winery based in the Ararat Valley region – said it had already seen considerable interest from potential Chinese customers. Commenting on the country's appeal for mainland buyers, Gabriel Rogel, the company's Head Winemaker, said: "We are geographically much closer to China than many other wine-producing countries, such as Chile and Australia, which gives us something of an advantage. Currently, though, our biggest market is Russia, which seems to have a real taste for our blended red."

Less able to leverage on its proximity – though no less optimistic – was Holden Manz, a relatively small producer based out of South Africa's West Cape region. Despite only producing about 130,000 bottles a year, it has been successfully selling into China since 2014.

Reflecting on his experience as a second-time visitor to the event, Gerald Holden, the Co-owner of the business, said: "There is clearly more interest this year. I've already got the WeChat details of 44 potential buyers.

"I am optimistic that South African wines will do well this year. We've been wholly unaffected by the bad weather and the fires that have bedevilled other wine-producing regions and we also have a robust price / quality proposition.

"At the moment, China is our fourth-or fifth-largest market – after South Africa, the UK and Germany. It's a very volatile market, though, and we are still coming to terms with the varying regional wine preferences."

While mastering the differing wine palates of China's many provinces, municipalities and autonomous regions may indeed be something of a challenge, it rather pales in comparison to the obstacles facing those intent on marketing Madeira across the mainland, a fortified wine that remains largely unknown among the majority of the country's residents. Despite this, Portugal-based Blandy's has persevered and, over the course of 10 years, has built up a small but loyal following for its range.

Reviewing its progress to date, Nelson Calado, the company's Marketing Director, said: "The China market is still in its infancy and we primarily sell into the UK, the US and Japan. Here, it's really a question of education although, at this particular show, we have met a number of attendees who are quite au fait with Madeira wine. That, though, is quite unusual."

While wine producers – both fortified and non – predictably dominated the event, there was also a number of spirit producers in attendance. One of the more unusual – 1887 Unicis, a high-end brandy – came courtesy of the Armenian pavilion.

Nicolas Liegeois, the French-born entrepreneur who founded the company, was so impressed with the quality of the brandy he was served during a stay in Armenia that he established his own winery in the country and set about creating a high-end brandy customised for the French palate. Just over 12 months ago, the brand made its mainland debut.

Clearly satisfied with his company's progress to date, he said: "We've had a great reception in China. In many of the larger cities, it's quite a mature market and people are open to trying new things. You have to be careful about not expanding too quickly, though, as there is a risk of compromising your brand."

Photo: Well-represented: French wines remain China’s tipple of choice.
Well-represented: French wines remain China's tipple of choice.
Photo: Well-represented: French wines remain China’s tipple of choice.
Well-represented: French wines remain China's tipple of choice.

ProWine China 2017 took place from 14-16 November at the Shanghai New International Expo Centre.

Chen Rong, Special Correspondent, Shanghai

Content provided by Picture: HKTDC Research
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