US vintners grow Chinese taste for top wine

California winemakers think the days of rice wine in China are waning as vintners find success marketing high-end cabernets to a new generation of upscale consumers.

Wine exports crushed international sales records last year, mostly because of growing demand for California wines in China and Hong Kong.

"We've been laying the groundwork for the better part of 10 years," said Terry Hall of Napa Valley Vintners, the region's trade association. "It's not like you just show up and start selling wine there."

Lower-quality California appellation wines have sold well to middle-class consumers in recent years, but the increasing demand for top-quality vintages is evidence of China's growing upper class.

"We try to be in all of the same places as all of the other important wines of the world, and right now China is attracting so much attention," said Don Weaver of Napa Valley's Harlan Estates, where Bordeaux blends can sell for up to US$1000 ($1193) a bottle.

United States wine exports to China grew by 42 per cent last year, and similar increases were noted in other Asian nations, according to figures released yesterday by the Wine Institute in San Francisco.

It nearly doubled 2010 export numbers as more winemakers seek to crack a relatively untapped market.

The industry effort to stand out from the French wines that have long been in China involves making a connection between potential buyers familiar with TV's Baywatch and the Golden Gate Bridge to the California lifestyle. "There's an association with wine and the Western world," said Linsey Gallagher, director of international marketing. "It's one of the aspirational products people look to as the quality of their lifestyles is improved."

Last year the institute launched a marketing campaign to introduce California-made wines, including a virtual tasting. Wine and lifestyle writers in Shanghai talked to growers in San Francisco, who led them on guided tastings of select California wines already available in China.

The Chinese economy has doubled in the past seven years, and low-end estimates say there are 1.5 million millionaires. With a population of 1 billion people in China, Gallagher figures only 18 million of them can afford fine wines.

"That sub-segment grows every year," Gallagher said. "The long-term opportunity is to get the rest of those billion people."

Grape wines still account for just 10 per cent of the alcohol consumed in China. Part of the trick in marketing high-end wines in China was in educating palates, and helping Chinese growers produce better-quality wines so consumers are not turned off by them, Gallagher said.

Chinese makers of plum and rice wines control 90 per cent of the country's market, and consumers are used to improving the taste by mixing it with 7-Up or orange juice.

While brand names are not familiar to most Chinese wine consumers, the Napa name resonates, says Hanson Li of the Hina Group, which has invested in a new Chinese winery.

Vintners are working on getting wine beyond the high-end hotels that cater to Westerners and into the markets where locals shop.

Heitz Cellar's Kathleen Heitz-Myers has travelled to China five times to research distributors for her cabernets. She gauges the growing demand by the increasing number of Chinese tourists who visit Napa tasting rooms.

"What impressed me when I was there were the younger people embracing it as part of their lifestyle," she said.

China is the biggest foreign consumer of American-grown products, and California products are highly desirable. Almonds, walnuts and pistachios are also enjoying record-breaking sales.

Breaking into a market that is new to fine wines is a complicated process. Ships, docks and trucks must be temperature-controlled to keep wine from spoiling. Trademarks must be protected, and sommeliers and beverage directors educated.

Napa Valley growers have been laying the groundwork for the past decade with periodic trips, but in the past two years growers have made the trip annually.

Industry officials view China the way they did Japan 30 years ago.

Now that country is the fourth-largest importer of US wines, one step ahead of China.