Wine in China

At Winstanley Kerridge, we are focused on going beyond the numbers and working with our clients to help them succeed. Joe Sims, a new addition to the WK team and a recent grad, gives some facts on Wine in China that he found an interesting topic in his studies.

At Winstanley Kerridge, we are focused on going beyond the numbers and working with our clients to help them succeed. Joe Sims, a new addition to the WK team and a recent grad, gives some facts on Wine in China that he found an interesting topic in his studies.

China presents an enormous opportunity for New Zealand wine exporters and for the Marlborough economy in particular. Growing sales and exploring new and emerging markets is a recipe for growth.

Market Size

• The Chinese wine market is currently worth around NZ$20 billion and is forecast to continue growing at around 10% per year.

Chinese Wine Consumers

• Consumers are largely younger and live in the cities.
• Most wine consumed is done so on premises, i.e. in restaurants.
• Consumers have a significant presence online and are followers of social media.
• Major social media sites in China include Weibo which is a combination of Twitter and Facebook. It is basically a cost effective medium to build a brand in China.

Wine Styles

• Currently the highest demand for wine in China is red wine and in particular Cabernet Sauvignon.
• However demand is increasing for white wines and in particular the less acidic varieties such as Riesling and wines with lower alcohol content.

Strategy

One of the most significant barriers to entry confronting New Zealand exporters is a lack of established supply channels. Assisting exporters is that the fact that New Zealand signed a Free Trade Agreement (FTA) with China in 2008.

One possible strategy is to focus on a single city or region. Currently our biggest wine export market is Australia. Their population is approximately 23 million people and in 2013 total wine exports to Australia market were NZ$370 million. In comparison China has a total population of 1.3 billion people with 180 million wine consumers alone. In 2013 total wine exports from to China from New Zealand were only NZ$26 million. A smaller wine exporter in New Zealand may therefore choose to focus their efforts on a single region or city rather than the market in its entirety. A single city in China could have a market equal in size to Australia.

Further information about exporting wine to China is available from New Zealand Trade and Enterprise or the Ministry of Business Innovation and Employment (MBIE).

Author: Joe Sims

wine cellar