China's wine industry posts 6.35% profit surge in Q1

Recently, the National Bureau of Statistics of China and the China Alcoholic Drinks Industry Association published relevant statistics about the economy operation of the wine industry. According to statistics, since the beginning of this year, with rising material and management cost and imported wine endeavoring to grab the market, China's domestic wine market has been operating stably, industrial output continued to grow at a steady pace, and profit margin has been further expanded.

The first quarter is conventionally a dull season for the wine industry. Nonetheless, China's wine market still managed to maintain a steady growth trend. Statistics show that in the first quarter of this year, China's wine industry achieved revenue of RMB 9.875 billion Yuan, an increase of 9.92 percent compared with the same period of last year, with profit of RMB 1.441 billion Yuan, an increase of 6.35 percent compared with the same period of last year. 

Experts believe that the steady growth of domestic wine has been greatly benefited by the huge consumption market in China. According to statistics, the annual growth rate of China's wine market has been over 20 percent since 2006. In 2011, consumption of wine in China approached 1.6 billion cases, elevating China from the 7th to the 5th in terms of the world's largest wine consumption country. It is estimated that the value of China's wine market will exceed RMB 100 billion Yuan in 2013.

In the meantime, the increment of imported wine has been staying at high level, causing great pressure on domestic wineries. Some wineries have even suffered the loss of dealers and consumers. The development of domestic wine companies are being placed in a "reversed pressure" mechanism. In the first quarter of this year, the volume of China's imported wine reached 128,800 kiloliters, an increase of 8.8 percent compared with the same period of last year. With ever greater pressure from imported wine, the three biggest wine companies in China, namely Great Wall, Changyu, and Dynasty, have been accelerating their channel construction and integrating domestic and foreign wineries resources, making vigorous efforts to improve the companies' competitiveness.

Zhang Hui, technology director of COFCO Global Wineries Group, told the reporter that COFCO Great Wall, on the basis of integrating global resources and wine making technologies, had taken steps further to improve the development model of wineries group, promote the internationalization of Great Wall wine, and improve the international competitiveness of its brand.

In recent years, COFCO Great Wall wine has stringently followed relevant standards of international wine organizations, establishing traceable systems throughout the entire industrial chain "from the farm to the table" that covers such links as grapes planting and picking, wine making, and storage, and building a number of unique wineries groups around the world. 

Currently in China, Great Wall owns five major production areas on latitude 40??n that is the world's golden wine making belt, including Hebei's Shacheng, Changli, and Penglai, Ningxia's Helan Mountain, and Xinjiang's Tianshan. It has established numerous wineries groups in China, including Chateau SunGod, Chateau Junding, and Chateau Huaxia. Overseas, Great Wall has successfully acquired Chile's Biscottes and Ch?teau de Viaud in Bordeaux, France, making it the first Chinese wine company to establish "global wineries group". In the future, Great Wall is also planning to acquire well-known wineries in California in USA and in Australia, to further enhance the international quality of Great Wall wine.

 "In order to convert resources in the production areas into actual market share and company competitiveness and do better in the international market, we need to make breakthroughs in such aspects as brand, technology, and product quality", said Zhang Hui.

In last August, Great Wall appointed world renowned winemaker Michel Rollands as the company's principle winemaker, extensively integrating COFCO Great Wall's global resources with advanced winemaking technologies through a model of "a international winemaking team + global wineries group". Presently, breakthroughs have been achieved in the cooperation of the two parties. In the next half of this year, the Great Wall global wineries series products and the Michel Rollands series products will be put on the market, including premium products that are made in Great Wall's Chateau SunGod, Chateau Junding, Chateau Huaxia, Ch?teau de Viaud in France, and Biscottes in Chile.   

Experts believe that, judging from the performance of the market in recent years, the market share of wine from premium wineries has been growing rapidly and is becoming the main trend of the future development of China's wine. A series of internationalized and high-quality products will provide significant momentum to Great Wall's globalization strategy and become the new engine of the internationalization of the Great Wall brand.