China and Wine - The Potential for Potential

In 1996 I was part of the first US Wine Delegation to China since 1949. This is old news. In the decade that has passed enormous changes have been wrought in the wine world. From micro-oxygenation and barrel alternatives, to a movie that eschewed Merlot for Pinot Noir, all the way to the near universal acceptance of a really good screw-cap.

In 1996 I would have never guessed that these things would be a part of the everyday wine world we live in. What nearly every wine expert polled would have agreed on back then, is that China would be a nascent wine drinking nation by now. No question that wine is on the rise in China, but has it lived up to its potential? Is China on the brink of being the next great market for all things vinous?

Not so you would notice.

Several recent articles have dealt with this question. The Washington Post recently reported an upsurge in wine popularity in China. And while they were kind enough to quote me in the article, I can't help but wonder if this is really it, or just another false start.

China is really, really populated. Every time anyone does the math on potential sales to China, of anything, much less wine, their head all but explodes with possible figures. It is an almost untapped market, with all of that, well... potential.

But potential doesn't buy wine, money does. And while there is a rising middle class in China, it is a drop in the bucket. The same Washington Post article cites 500,000 people in China make as much as $64,000. That is a great living by Chinese standards, but it is only 0.04% of the population.

For more than 90% of the Chinese, even the lowest priced wine at around $4, is out of their reach.

So this tiny percentage of the population with their disposable income are drinking wine, but what kind of wine? The usual suspects. Without a heritage of enjoying wine for wine's sake, they gravitate towards the well known labels. The wines they have heard and read about in the context of Western culture, primarily Bordeaux.

Given the lessons of history, low expectations, and few if any laws regarding fraud, there is no guarantee they are even drinking what they are paying for. To be fair this is true anywhere, but in China there are far fewer people who are trained to know the difference.

If wine, as we think of it in the West, was the cheapest alcoholic beverage money could by, it probably still wouldn't be the most popular in China. Why not? Because of taste.

The Chinese have made wine since the dawn of time, but they have tended to let herbs and various less common ingredients, seep in and flavor the wine. Wine has always been more medicinal that recreational. Those in China that do drink wine, often prefer these traditional styles which are more familiar to them.

For recreation the Chinese have long preferred strong and clear liquors which are consumed as shots, and can, at the host's discretion, be easily replaced by water, allowing the host to seemingly out drink his guest.

Frat house drinking games aside, alcoholic beverages in China represent an aspect of culture, either traditional and revered, or Western and coveted. Marketing to their desire for social status is currently more effective than trying to pair wines with foods.

This is not altogether different than wine marketing was in the US just 30 years ago. Weaning a beer drinking nation off the hops and onto the grape took decades here, and that was without the corresponding economic concerns.

In 1996 I suggested that China had a long way to go, for all the same reasons I cite here. I suggested then that education was the key, and I still stand by that. If we want to sell wine to the Chinese, we need to teach them how to make it part of their lives, and not just something you trot out on occasions to impress.

Here it is 2007, and China has made only a few strides, but at least they have been in the right direction.

If you are planning on selling wine in China, think long term and be prepared to build brand loyalty, no matter what the cost.

If you are in China and are hoping to learn more about wine, be aware that it is not all about price. Money is no guarantee of quality. There are any number of great wines that are not status symbols. It is what is inside the bottle and not on the label, that counts.

For me the potential of wine in China is not about the huge numbers, it is about culture. The Chinese love food. They love to share their food. Food is their life. In fact I can only think of one other country I have seen that is anywhere near as passionate about food, and that country is arguably the greatest wine country of all, France!

I would love to say that once the right wines are introduced, those that elevate the food (Riesling comes to mind) it will be much easier for wine to move from status symbol, to the dinner table. The deepest problem remains though - economics.