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Aug. 10, 2022

De-mystifying Wine in China w/ Ian Ford & Nichole Mao, Nimbility Asia

De-mystifying Wine in China w/ Ian Ford & Nichole Mao, Nimbility Asia

A walk through of how the Chinese wine market has changed, what has led to success, and the current wine trends in the country.

As one of the biggest alcohol markets in the world, China is slowly waking up to wine. Ian Ford, Founding Partner, and Nichole Mao, Partner of Nimbility Asia, walk through how the Chinese wine market has changed, what has led to success, and the current wine trends in the country. With significant growth potential, the Chinese market is a critical global wine market to grasp and understand. 

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Detailed Show Notes: 

Nimbility Asia

  • It doesn’t transact wines; not an importer
  • Acts like an export team for producers
  • Creates GTM strategy and aligns w/ the right partners
  • Creates research reports for data-driven decision making
  • Serves China (biggest market), S Korea (#2), Indonesia, India, Australia
  • Japan & China ~75% of wine shipments into Asia

Chinese wine consumer

  • Still very early stages for wine, not a daily drink for most people
  • 2019 - 1.3 L wine/capita/year vs 51.9L for Portugal, 12.2L for US
  • ~0.2L wine/capita/year 10-20 years ago - wine was for gifting, banqueting, and hosting, not home consumption
  • Coastal cities (including Beijing & Shanghai) have young consumers that go to wine bars, bistros, drink at home
  • The growing trend of home consumption, helped by e-commerce, gifting still exists

Chinese alcohol market

  • big, dynamic alcohol market - strong food & drink culture, no religious objections, very social culture
  • The largest beer market in the world, dominated by domestic production
  • Beer is a daily consumption item
  • Craft beer is stunted by regulations requiring a large minimum volume
  • Some craft beers (e.g., Boxing Cat, Great Leap) started as brewpubs

China wine market

  • 50-60M 9L cases imported, expected to double in next 10-15 years
  • ~100-120M 9L cases of domestic wine, hard to measure
  • Big domestic producers - Great Wall, Changyu, Dynasty
  • Emerging quality producers - Silver Heights, Grace Vineyard

Success in China

  • Consumer awareness creates customer pull (e.g., Casillero del Diablo, Penfolds)
  • Cluttered marketing environment
  • Unique digital landscape (no Instagram, Facebook, Twitter)
  • Penfolds Example (pre-tariffs) - Grange provides halo, central to the story (good formula for success), profit driver is 300k cases of Bin 407 & 389 at ~$400-450/9L case, also sold ~800-1,000 cases of Rawson’s Retreat entry-level wine
  • Lafite Example - Los Vascos (Chile) has higher demand due to Lafite affiliation
  • Sommeliers and lifestyle KOLs (key opinion leaders) can help
  • Social media amplification is massive

Popular regions / wines styles

  • Mass market - more price and style driven, like fruity, easy drinking style around ~100 RMB/bottle (~$15); Chile doing well; Cabernet and Shiraz are recognized varieties
  • Fine Wine - Burgundy has been the “hot bun” the last two years - pricing rising dramatically, can’t get enough; also helping NZ Pinot Noir
  • Very diverse market (e.g., natural wine bars in Chengdu)
  • Premium sparkling rising (e.g., Champagne, aged Cava)
  • More adventurous wine consumers (e.g., blind tasting clubs that compete with each other)
  • Rosé is a very small, but growing category
  • Fortified, sweet wines are tiny
  • Sustainable/organic help and are important for the future, but not big today
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