Foster's chases greater share of Chinese wine market

FOSTER'S Group has shifted key executives in charge of its Asian push to its regional headquarters in Singapore, as it targets the booming Chinese wine market.

Foster's premium brands, such as Penfolds and Wolf Blass, have already helped Australia become China's second-biggest source of imported wine.

Anthony Davie, managing director, Asia, and some of his team have set up in Singapore. The 11-year Foster's veteran is reporting directly to Foster's chief executive Ian Johnston.

Mr Davie, who is responsible for the sale of Foster's range of beers and wines to consumers from Japan to India, is particularly optimistic about the opportunities in China, where premium wine labels are in great demand from the country's expanding middle class and young professionals.

Industry figures estimate annual growth in alcohol consumption in China at 8-10 per cent by volume, with wine (excluding rice wine) making up only 2 per cent of the market but 8 per cent by value.

''Over the next five years we see wine growing around 25 per cent in volume terms, so stronger than other alcohol categories,'' Mr Davie said.

The superiority of value over volume suggests the average Chinese consumer who can afford to drink wine is picking the more expensive labels from the supermarket shelves or at city bars - perfect for Foster's, which has invested heavily in premium labels.

''As a category, wine is seen as something that if you are 'making it' or 'getting there', it's a product that you will drink, and we see for Penfolds and our other brands, Wolf Blass and Beringer, keeping a premium positioning with consumers is important,'' Mr Davie said.

''Consumption per capita is still very, very low but it's more younger, well-educated, tertiary-educated people that are starting to drink wine and something different to what their parents drank.''

As part of its brand strategy, Foster's recently staged wine tastings in office-tower foyers in Shanghai, exposing white-collar workers to Penfolds to coincide with a marketing push for the label.

''We are actually getting the product into the hands of the right target group, allowing them to taste the wine and start to learn more about the wines,'' Mr Davie said.

France now holds the No.1 position among wine importers in China, but Australia is a close second.

According to the Australian Wine and Brandy Corporation, between 2005 and 2009, the value of Australian wine exported to China rocketed from $20.8 million to $93.6 million.