‘Nava Valley’: The Fate of American Wines in China
In the global wine export industry – which increasingly looks to China as a developing market – it is sometimes remarked that the United States has not made in-roads within the PRC, especially in comparison with the likes of France, Australia and Chile, the main import leaders (in that order).
Even with a strengthened yuan (RMB) and weakened US dollar, American wines do not appear particularly affordable here, especially when distribution costs and local taxes are factored in. But, irrespective of currency fluctuation, US wines are often perceived to offer weak QPR (quality-price ratio) compared with wines from other countries, almost regardless of where you’re buying them. As a Brit, I remember well the polarized selection available on retail shelves or from specialist merchants in the UK: one could choose from either budget/bulk or a narrow range of the ‘premium’ to ‘super-premium’.
Obviously, this picture is unfair to the diversity of what the US offers, either in terms of product or, in some cases, QPR. At the same time, it’s easy for those of us who don’t live in the States to forget that, if most American wines are consumed domestically, arcane shipping laws mean US wine lovers often miss out on that diversity too.
But what’s going on in China? What challenges do American wineries face if they want to capture a piece of this developing market?
First off, let’s not view the PRC through jasmine-tinted spectacles. Although the market for import wines is developing, it is not sizeable by international standards. Its potential may be considerable, but it takes very careful marketing and placing of wine to get anywhere in China.
However, there are country-specific concerns for US wines, even those hailing from California (which usually initially leads the way for other states/regions). Eric Pope, regional director of emerging markets for the California Wine Institute, notes that ‘awareness’ has definitely improved, even if market share is on the lower side:
California wines have made major gains in awareness in China’s major markets. I will use the example of one California wine maker who attended a California tasting 7 years ago in Shanghai and said that ‘you could have shot a canon through the crowd and not hit anyone.’ Today we are getting 200-300 people attending the tastings with the majority of attendees being local Chinese.
Pope adds ‘Chinese import statistics show that the value of California wines imported into China is growing faster than the major competition’. Obviously there is much more to be done. A surprising chunk of the Beijing wine community, for example, only heard about the last major Californian tasting to be held here at the eleventh hour. But Pope is right to be enthusiastic. The California Wine Institute is also developing tasting programmes in so-called 2nd-tier cities as well as the likes of Beijing, Shanghai, Shenzhen and Guangzhou: a sensible move.
Nick Sonderup of Golden Gate Wine, which imports exclusively American wines into Hong Kong, Macao and now mainland China, notes some of the difficulties in approaching the more immature PRC:
When we mention that we are a specialist USA wine supplier the first response from the western on-trade channels is ‘tough sell’ or ‘our sales of US wines are very low’ etc. Hotels, restaurants and less so, bars, have at least some representative brands from the USA, but many of these are commercial brands and are distributed by the larger, more well- established players.
As a wine educator, I can understand Sonderup’s frustration with the lack of knowledge that often accompanies an immature market (but that’s partly why we’re here, of course). Also Chinese on-trade, provided you have the right connections, should prove more valuable in the long-term as local Chinese restaurants and fledgling wine bars develop more professional lists.
With local consumers the signs are, perhaps, more promising. As Sonderup observes: ‘Chinese tourists who have been to the USA have a greater appreciation mainly born of having been to vineyards in the US during their travels’. Moreover, when I review importer lists – including some of the smaller companies no one outside China really knows much about – the picture for diversity is rosier than one might expect.
For example, Summergate, one of the leaders in high-end American wines, stocks Kistler, Bethel Heights, Ridge, Silver Oak, Diamond Creek, Stag’s Leap Wine Cellars, Philip Togni, Pahlmeyer, Harlan and Bond Estates as well as the more entry level Irony, Gnarly Head, Woodhaven and Delicato ranges. ASC carries the likes of Joseph Phelps, Caymus, Cakebread Cellars, Seghesio, Shafer, St. Supéry, Cambria, St. Francis, Erath, Chateau Ste-Michelle, Beringer and Kendall Jackson (these latter two giving ASC some entry to premium level flexibility). ASC also bottles in bulk ‘Chateau St. Pierre’, a starting point for many consumers.
The aforementioned Golden Gate Wine, meanwhile, covers a wider range of West Coast wineries including Willamette Valley’s Sokol Blosser, Domaine Serene and Elk Cove; Henry Estate from Oregon’s Umpqua Valley; Russian River Valley’s Freeman Vineyard; and Napa’s Far Niente, Nickel & Nickel, Inglenook, Peju and Turnbull as well as California State-wide Esser Vineyards plus the budget Rex Goliath (Central Coast), among other labels.
More intriguing still, perhaps, is Napa Reserve, based in Shanghai, a specialist shop promoting exclusively Napa wines (the company behind this venture is an importer called Rutherford Bench China Ltd. which pretty much indicates what grafting one culture onto another involves). Napa Reserve is flanked by Globus which handles Schramsberg’s sparklings, Landmark, Zmor, and even the non-alcoholic wines of Ariel and Ruby Red Fine Wine which stocks the collective Cal-Asia wineries (Volker Eisele, Interlude, Shannon Ridge etc.) among other US labels.
Smaller offerings come from DT Asia which stocks Paso Robles Rhone-variety specialist L’Aventure (and the budget Red Peak range), East Meets West (Ferrari-Carano), Jebsen (Robert Mondavi, Ravenswood and Estancia) and Aussino (Cuvaison, Wente, Castoro Cellars and Hayes Ranch) – Hayes Ranch also being distributed by Links China (along with Lyeth). Finally, Torres China, brings in Hess Selections and, of course, Marimar Torres; whilst Opus One’s distribution obviates exclusivity deals with the wine popping up on the lists of Links China, ASC, Torres China, Aussino, among others.
But what about ‘Nava’? At least the fame of Napa appears to count for something in China, a country where, in some cases, imitation is the sincerest form of flattery. Take the Nava – yes ‘Nava’ – Valley located in Shandong Province. This is where large scale domestic producer Great Wall has developed Chateau Junding, whose own website highlights the ‘Nava’ concept: http://www.nava.cn.
But as Jancis Robinson MW noted on her last visit to China, these ‘premium’ to ‘super-premium’ ventures on Chinese soil are unlikely to produce any fine wine any time soon. Fongyee and I were actually among the lucky panel who managed to select some 15 Chinese wines for Robinson to taste from a sample of over 60. But they were indeed a sorry sample by international standards.
In other words – although flattery indicates Chinese awareness of the likes of Napa – California, Oregon, Washington and other US wine-producing states do not have much to fear in terms of competition by quality. We just hope everyone can continue to get the word out and as effectively as possible. Fongyee’s last lecture at Beijing’s China Agricultural University, with the wines of Robert Mondavi, attracted some 180 students (above). Surely, some of those students will, in future, be drinking American wines.