Canucks uncork Chinese wine market(2)
Dufour has been travelling to China since 1995. He says he's seen dramatic changes through the years, with icewine starting out as a gift item, and now becoming a drink consumed at dinner banquets along with the French grand cru.
"During the trade shows in the 1990s, the Chinese were more interested in my [pointof-sale] system than the wine. They were fascinated by anything Western," said Dufour. "The middle-class is emerging and they see wine as part of that image of wealth."
A Credit Suisse report last year said the top 10 per cent of Chinese household incomes have grown 255 per cent since 2004.
It's not uncommon to see wine drinkers chain-smoking during a tasting or pounding a glass of wine like a shot of baiju, a popular Chinese rice liquor that can contain as much as 60 per cent alcohol.
"Fifteen years ago, people didn't like the taste of wine and would mix it with something else; some still do," said Dufour. "This generation may mix their Bordeaux with Coke, but the next will drink it as Bordeaux."
A bottle of Inniskillin's icewine sells for $140 to $200 in China.
According to a report from Agri-Food Canada, Canada exported $8.6 million of icewine to China in 2009, and it remains the top export destination for the Canadian specialty.
The young wine market - with its inexperienced Chinese palates and growing disposable income - has created the perfect formula for Canadian winemakers.
That's especially true in the rural or interior cities, where wine knowledge is not as sophisticated and purchase decisions are being based on decent price points - and the fact that red wine is believed to be good for your health in China.
However, with non-existent distribution channels and rampant knockoffs, entering China without a good partner can be risky.
Allan Schmidt from Vineland Estates Winery, which sits near the Niagara Escarpment, launched his icewine in China 10 years ago, and has experienced the market's highs and lows.
"Ten years ago, you would have a really hard time to find someone in China to sell your wine, but all I have to do now is pick up my phone," said Schmidt, who added his phone was buzzing with prospective partners in China during the interview.
"Everybody wants to be an importer, but no one wants to get into distribution."
In 2005, Schmidt was surprised when a customer congratulated him for entering the Chinese market, but his label was only being sold in Hong Kong at the time.
Since then, Schmidt spent five years and $25,000 in legal fees to fight for his trademark rights in China. His appeal failed last fall and was told the word "Vineland" was too generic to trademark.
"Even though it's our corporate name, we have not been able to trademark it so this company selling our icewine is passing it off as ours," said Schmidt, but he said he suspects those promoting a product with his name have closed up shop, since he hasn't been able to find the fakes lurking around anymore.
"It was a good learning experience, and even if we would have won, it would make no difference, because the next person would do the same thing," said Schmidt, referring to the myriad of fake products in China; knock-offs of such brands as Gucci or Apple.
Vinexpo's Beynat says all eyes are on China right now, but other emerging markets like India and Brazil should not be overlooked.
"[In China] it's not one billion wine consumers, it's probably 150 million, which is still good, but it will take time to find them," said Beynat, from Bordeaux.
