China has just claimed the title as the market with the world’s second largest wine drinkers.
While the Chinese have been brewing alcohol — like the extremely potent and popular baijiu (distilled from sorghum or sweet rice) — for thousands of years, the mass appeal of Western-style red wine is a fairly new phenomenon in the country.
Even though the rate at which new millionaires (people worth more than $ 1.6 million) are created in China has slowed down a bit, the nation can still boast of more than one million millionaires, and more than 150 billionaires. With all of that extra moola circulating about, a new class of citizen has developed a taste for luxury goods, including expensive watches and quality red wine. Maybe the song “Red Red Wine,” recorded by Neil Diamond, and UB40, was really about the future of Chinese wine.
Wine producers around the world have taken note. When “wine appreciation and education classes” are booming in China, and wealthy Chinese citizens are willing to shell out some serious bank for top quality wines, the wine world trembles with excitement … and occasional fear. China’s love affair with wine is a game changer as far as the international markets are concerned.
This new love for wine, especially French reds (48% of imported wine in volume, 50% in value) comes with a few hiccups, of course. The Chinese palate isn’t all that accustomed to Western wine terminology. According to the Wall Street Journal, growers and auctioneers are overcoming some of these cultural barriers by equating the qualities of various wines with traditional Chinese flavors and sensibilities, ranging from the tangs of certain medicinal herbs to “red dates” and other aromas that are locked into the Chinese psyche. The “poetic” descriptions you generally read on a wine label in America or France doesn’t make a whole lot of sense when viewed from a Chinese perspective, even if properly translated.
Despite a few setbacks, Chinese wine markets are well worth the extra effort. A true appreciation of wine, as well as the elevated social status that comes with owning a hard-to-get or expensive bottle, are fueling demand in China. The country, which is expected to exceed the U.S. in global wine consumption in several years, has already claimed the number one slot for red wine, surpassing France and Italy. News like this is causing gigantic waves throughout the international wine industry. That’s a fairly impressive feat, considering the fact that the Chinese have only been drinking wine en masse for a few years.
For now, this means China will continue to import a ton of wine, and continue to exert a powerful influence over global wine prices. Even though premium bottles from Bordeaux and elsewhere have a certain “exotic” charm, the demand for inexpensively and locally produced wine will likely soar as “average” Chinese citizens begin to imitate the drinking habits of the “elite.” And where there’s an economic demand, China can usually meet it — even if this means claiming valuable Panda habitat for vineyard expansion. Hey, every vice, no matter how pleasurable, comes with a price.
Nicolas Goldschmidt, director of the Organisation Internationale de La Vigne et du Vin wine management MSc program in France, believes the quality of Chinese red wine has improved significantly over the past few years, although it’s not perfect yet. “Chinese growers still need to work more on the vineyards, as they are key to good grapes, which make good wines,” Goldschmidt explained. Another major factor driving sales is color. “The demand for red wine is huge in China because red means good luck.” Not everything comes down to price and taste, even in relation to wine buying patterns.
Although a few select Chinese wines are set for export, Mr. Goldschmidt reckons China probably won’t have a significant impact as a wine exporter in the near future because “the average international consumer doesn’t associate China with wine.”
While the French have a strong lead in China, other international growers like Australia, Chile and Spain are fighting to increase their market shares. The Central Kingdom, it seems, will remain a major player in the international wine game for many years to come.
If you’re ever in China and fancy a bottle of excellent Chinese wine, Mr. Goldschmidt recommends Silver Heights, a small winery in Ningxia province (a promising wine-producing region). Emma Gao, the chief winemaker there, “makes wonderful wines, especially the Reserve.” So go ahead, give some Chinese-made wine a try. Who knows, you just might be sampling the future of global wine.