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| Believe it or not - Chinese red wine |
Can the Dragon´s vineyards conquer the world? Join Ashley Charles Jenner
For the Chinese, the favorite tipple was beer or a type of Chinese wine, made from grain rather than grapes. Spreading prosperity is changing drinking habits. China is a now major wine producer and a growing wine consumer, although China is an unlikely candidate for being a leader among red wine-producing countries.
Red wine is seen as a 'status symbol' drink among Chinese high society and both its consumption and production in China is seeing sharp growth. Some are predicting China will become the world's largest wine buying market in years to come. Reports in fact show that more than 70 percent of the wine consumed in China is red. Its popularity is linked to perceived health benefits and the fact that red is a color traditionally linked to festivals and gift giving.
Growth is being driven by continued increases in disposable income among middle-income consumers with a propensity to spend on luxury products such as wine. China would not be China if it was not exporting too and Chinese red wine is now starting to find its way onto UK supermarket shelves. While the country has yet to produce a wine that could be considered with the best of Europe or the New World, it is producing some perfectly drinkable wines that are finding favor with curious wine drinkers. Dynasty, a joint venture between the Chinese government, French brandy firm Remy Martin and the Hong Kong International Trade and Technology Investigation Organization, has so far had the most critical success internationally in red wines. Among the best of the Dynasty red wines is the Cabernet Sauvignon, a drinkable dry red made according to the traditional wine making methods of Bordeaux. This wine is made from grapes of the Jiaxian Vineyards in Tianjin. Dynasty now exports its wines to over 20 countries, including the USA, Canada, the UK and even France.
From the Changyu stable, perhaps the best of the red wines is the 1992 vintage Château Changyu Cabernet Gernischt. Grown in the vineyards of Beiyajia using Cabernet Gernischt grapes, this ruby-red wine was stored in oak barrels for three years, resulting in a very respectable, full-bodied red wine. The leading Chinese wine company may remain little known outside China, but this looks set to change as interest grows in Chinese red wine.
China's other large wine producer, Great Wall, has produced some decent bottles such as the 1994 Château Great Wall Dry Red, which is made from Chardonnay and Merlot grapes. A mellow yet robust wine, this might pleasantly surprise wine enthusiasts who have scoffed at the concept of Chinese red wine. Other notable wines are from newcomer Silver Heights, in the northwestern region of Ningxia, by wine maker Emma Gao. Both include a grape commonly found in China, Cabernet Gernischt, including Family Reserve (60% Cabernet Sauvignon, 30% Cabernet Gernischt, 10%Cabernet Franc) and The Summit (60% Cabernet Sauvignon, 20% Cabernet Gernischt, 20% Cabernet Franc).
It may not yet have carved itself a reputation as a major player in terms of premium wines, but the sheer speed at which the Chinese wine production market is growing means it may only a matter of time before Chinese red wine becomes as acceptable as those from the New World. For the time being, these wines may have novelty value at social gatherings. Over the past decade, the Chinese have become increasingly interested in grape wines although just a sophisticated part of the Chinese public is experimenting. They have moved beyond table wine and are leaning for more varietal wines such as merlots and cabernets. Consumption of European-style wines has grown dramatically in China's cities, by as much as 15 percent to 20 percent a year, according to some industry estimates and per capita consumption of such wines has doubled in five years. Supermarkets in big cities sell foreign wines, which are expensive, but they also stock locally made varieties from producers who have started vineyards with imported vines. This is not easy, because although conditions for growing grapes are generally good, but it has been difficult to transplant knowledge and wine culture. Nurturing the vines inland is also difficult, particularly during northern China's harsh winters. The plants must be buried to survive the cold from November to March as protection from the severe cold and the threat of being dried out by the wind. However, vineyards, near the coast, in Penglia for example, also have their challenges. Damp summers and plentiful rainfall are not ideal for early maturing grape varieties. The humid weather causes diseases.
In fact, experts say the average wine sold under domestic labels is disappointing. This is due to everything from the pursuit of high-yield harvests to the use of unripe grapes to the blending of local and bulk imported wine to an emphasis on marketing rather than product quality. As is the case with the Brazilian wine market, for example, decent local wines tend to offer poor value given the range of quality of imported wines available at similar or lower prices. China also faces a quality versus quantity problem. Getting great grapes is the hardest part for grape merchants. This is because the system generally dictates that the farmer who sells more grapes gets more money, which takes away a focus on quality. Farmers have no reason to forgo irrigating the vines before harvest, or to reduce the yield, because these measures make no sense to those local farmers since they are paid by weight. This is the opposite of the practice in the E.U. whereby producers who exceed their quota are penalized. Grapes are picked as soon as possible to minimize risk of poor weather that could destroy the crop. This prevents the grapes from reaching a good polyphenalic maturity. The winemaker's dream of small crops of flavorful fully ripe grapes is not likely to happen in a typical Chinese vineyard where grapes may sell for as little as $80 a ton to agents who lump them together with fruit from dozens or hundreds of individual growers.
To make matters worse, prestige-seeking Shanghai yuppies have been known to mix expensive first growth Bordeaux with Coca Cola and vast vineyards in China threaten to flood world markets with cheap wine (as Chinese exports have flooded some other markets already). Wine was meant to replace beer or grain spirits in the diet. It was typically made from a combination of grapes and other fruits. It is probably not so surprising that Chinese who were brought up on these mixed-fruit wines might today mix dry grape wine with fruit juice or Coke to get a more familiar flavor.
China's vineyards are vast, totaling six percent of the world total. There are 453,000 hectares of vineyards in China, which is roughly equal to the U.S. (380,000 hectares) plus Germany (98,000 hectares) or just over the half the vineyard area of France, the world leader. However, 80 percent of the grapes are grown as fruit for the table grape market. About 10 percent of the grapes are dried to make raisins. The remaining 10 percent are wine grapes. China's wine production is relatively small at just 2.6 percent of the global total. China has about 450 wine producers and the industry is highly concentrated with four wineries accounting for 60 percent of domestic production and sales. The big four are Great Wall, Dragon Seal, Changyu and Huadong. Foreign partnerships are common, giving Chinese winemakers access to international technology and expertise. The French multinational Pernod Ricard helped create Dragon Seal in 1987, for example, and Seagrams and Remy Martin have been involved in joint ventures. Chinese wine markets are increasingly focusing on supermarkets as a growing distribution vector. This is the traditional bulk distribution system where a lot of Chinese wine goes. Supermarkets may also eventually play an important role in educating Chinese consumers about wine in general and foreign wine in particular. However, a small number of boutique winemakers have appeared, often financed by Hong Kong Chinese families and using international imported expertise.
The Chinese should take care in how they take on international wine markets. It is one thing to enter the electronics market or the car market (as China is now doing in Brazil) by riding the learning curve from back of the pack to the pick of the crop but wine is different. It takes a generation to change the poor image of a wine producing country. This is the problem Spanish wines had in the 1960`s. Brazilian wines were so inferior that no self-respecting host would serve them to guests.
Here are some suggestions as to how China can develop its wine markets.
Firstly, avoid presenting poor quality wine as wine. It can be sold as sangria or coolers, as already appears to be the case. It can be exported to traditional wine producing countries to add body to thin wines. Much Italian wine is of imported mongrel composition but is called Italian anyway.
Secondly, encourage brand awareness by wine tasting sessions. In supermarkets, wine promoters need to shower the public with free samples and explanations on all the positive aspects especially why wine is their best option. This would also involve implanting wine jargon for prospective wine buffs. “Tasting” becomes “degustation” and “sniffing” becomes “bouquet”. The public should be able to detect all the taste elements of Cabernet Franc including blackcurrants, blackcurrant leaves, green/bell peppers, smoke and spice. The idea is to associate "ganbei" ("cheers") with wine rather than beer.
Thirdly, offer wine tasting lessons to make the consumer feel like a connoisseur. This also involves offering professional training for sommeliers and winemakers including via e learning (rather like shadow boxing). Arranging visits to wine regions is another way of increasing skill in tasting. If the rest of the world does it, why not the Chinese too. If the Chinese public is willing to pay to spend a day at the Bird´s Nest looking at the empty stadium while listening to rousing Olympic music, imagine the thrill of a visit to a winery.
Fourthly, specialize in a particular type of grape and create an association of ideas. For example, Pinotage and South Africa, Malbec and Argentina, Chianti and Italy, Carmenere and Chile, Tannat and Uruguay, Pinot Noir and Bourgogne. How about Cabernet Gernischt and China? This would involve providing a ranking of the best vintage years, making secondary markets for serious collectors and even a Chinese version of the Appellation Controlée.
Lastly, if the wine producing areas are so hostile to grapes, move the whole business to a more hospitable terroir. Brazil used to produce an acid type wine exclusively in a cold humid mountainous region in the south simply because Northern Italy also produces wine under similar conditions. In the 1970´s a Californian producer had the idea of producing wine in the lowlands with the result that suddenly Brazilian wine became palatable. According to some wine professionals, there is potential in Northwest China, in Xinjiang and Ningxia, where the growing season features drier weather and plentiful sunshine.
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Graduate Degree in Economics from London University and in Finance by the British Institute of Bankers. With 39 years of experience in capital markets in Brazil, Europe and USA, he was an Executive Director in several banks. He is the Director of Investments of Astra Investimentos Ltda, an independent fund asset manager and CEO of Barham Financial Services, specialized in preparing companies for Private Equity investments. |
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