Press

China set to revolutionize wine market

During a lively and enjoyable wine geek lunch the other day with a vintner and several O.C. journalists, Jay Selman of Grape Radio made an offhand comment that I found fascinating.

“What’s the fastest-growing wine market in the world?” he asked me.

My guesses were wrong. The answer, though, should have been obvious: China.

Yes, that rising tiger is dominating the wine market, too. I poked around and came up with a few amazing statistics:

Since 2001, China has increased its consumption of Bordeaux by 35 times. That’s a 3,500 percent increase of vino from the most expensive wine-growing region in the world. In 2009 alone, the value of all Bordeaux entering China jumped 60 percent to more than $75 million.

Overall, the wine market in China has doubled in five years — not surprising, considering the adoption of Western culinary habits and the rise of personal incomes. It’s now one of the top ten wine-consuming countries in the world, and is on track to be number 7 by 2012. By then, the Chinese will be drinking 1 billion bottles of wine annually.

And there’s room for more amazing growth.

Right now, the Chinese are consuming less than half a liter per person annually. Compare that with France, which has an annual per capita consumption of 50 liters. Even if the Chinese adopted American wine-drinking habits — about 15 liters per person annually — the world wine market would be dramatically transformed.

If you think Robert Parker and the American market have shifted consumers’ tastes and vintners’ styles over the last two decades, imagine what the wine world will do when it figures out what 1 billion Chinese fans of the grape prefer. All the Chinese wine industry needs is its own Robert Parker, making grand pronouncements and developing a cult-like following, and the game would be on.

But the U.S. wine industry, like so many others, has found that China’s tantalizing market can be frustratingly hard to crack. “It’s very hard to do business in China,” said Swanson Vineyards’ vintner Chris Phelps. “There are a lot of barriers to deal with.” There’s also a large domestic wine industry in China to contend with.

And judging by the stats, the Chinese wine drinker, while undoubtedly growing in sophistication, still seems obsessed by the age-old Asian preoccupation with prestige; that explains the huge market for Bordeaux.

I remember talking a while back with a world traveler who had attended a dinner party in China where the wine — a fancy Grand Cru something or other with the price tag still on the bottle — was mixed with Coke by some people at the table.

A Frenchman would probably respond, “Chacun a son mauvais gout!”

An American, on the other hand, would shrug, make some calls to Napa and the folks at Coca Cola, then start a line of wine-and-coke machines for the Chinese market.