Asia is witnessing a revolution in wine consumption.
Drinkers in markets including China, Vietnam and India are sipping much more of what was once considered an elite European drink.
“Wine has infiltrated the lifestyle across Asia. From young professionals to the corporate world, to the wealthy elite, women and more,” says Debra Meiburg, a Hong Kong-based wine journalist and educator who is also a Master of Wine — a title held by only a select few hundred experts worldwide.
“I’ve witnessed a huge transformation in the wine world in Asia. I can say that the wine sector in this region is really evolving to accommodate the taste preferences of Asian wine lovers.”
She says a key factor that is contributing to the growth of wine in Asia is the growing middle class. “More disposable income, greater influence from the West and an increased emphasis on quality of life and leisure are creating extraordinary opportunity for wine.”
Jim Boyce, a Beijing-based writer who runs the Grape Wall of China website, says the rise in curiosity and knowledge among consumers is making a real difference.
“There is an increasing amount of wine and spirits info being translated into Chinese. This has helped to empower consumers and made it easier for them to explore the world of wines,” Boyce tells China Daily Asia Weekly. “Ten years ago, you might have found yourself looking at supermarket shelves full of wines or restaurant menus feeling bewildered.”
Economists at the Wine Economics Research Centre, part of the University of Adelaide in Australia, say that by 2018 Asian countries will dominate global wine consumption and import growth, driven by a surge in consumption in China. The country’s wine consumption could grow by 60 percent over the next few years, with demand set to outstrip supply by 2018.
China is now the world’s fifth largest producer of grape wine, up from 15th place in 2001. Despite the boost in domestic production, imports are expected to rise by up to 790 million liters by 2018. According to figures from China’s customs, the country imported 384 million liters of wine in 2014, up 1.86 percent from 2013.
“Prior to this century, grape wine was consumed only by Asia’s elite, and produced only in tiny quantities and mostly in just Japan,” says Kym Anderson, executive director at the Wine Economics Research Centre. “A huge preference swing toward the traditional European product has changed the situation dramatically.”
China is also expanding its vineyards and the country has edged past France in the amount of land devoted to grape growing, according to the Paris-based International Organisation of Vine and Wine. The nation now ranks second only to Spain, accounting for nearly 11 percent of the land devoted to vineyards worldwide.
In 2013, China became the largest global consumer of red wine, supping 155.4 million cases, compared with 150 million cases in France and 141 million in Italy, according to a 2014 report by Vinexpo, a wine and spirits exhibition company based in Bordeaux, France.
The popularity of red wine is largely due to the symbolic importance of its color. Red is a very positive hue in Chinese culture, associated with wealth, power and good luck. In business circles, these three values are fundamental. Red wine is therefore an obvious choice for business hospitality, where partners drink to each others’ health, the study explains.
Guillaume Deglise, CEO of Vinexpo, says that around 37 million Chinese are expected to reach the drinking age by 2019. “That is more than the entire population of Canada,” he says. “It shows the great potential of the region as wine drinking and culture continue to gain traction.”
India consumed 1.10 million cases of wine in 2013, of which 670,000 cases were red wine. The Vinexpo report says wine consumption in India is likely to increase to 2.1 million cases by 2017. At present, it is the 11th biggest wine-consuming country in Asia Pacific.
In Southeast Asia, Vietnam is leading in the pack with an annual wine consumption of 6.6 liters per capita, and the country spends about $744.2 million a year on wine.
To take advantage of the booming wine business in the region, a large number of international companies are setting up camp in Singapore, helping the city-state to become the next Asian wine hub, after Hong Kong.
Although the Muslim countries of Indonesia and Malaysia have got relatively small wine markets, they are also experiencing growth in the sector. In the Philippines, largely a beer-consuming country, the wine trade is predicted to have a total volume growth of 8 percent by 2018.
Deglise of Vinexpo says that growth in the region will depend on the next generation of consumers.
“Targeting the milennials (younger people) and female consumers is definitely the way to go, as the lifestyle of young and successful consumers especially in big cities is quickly evolving,” he says. “The new emerging middle class is always attracted by premium image products, and packaging plays an important role.”
When it comes to wine, one of the biggest challenges companies face is the complexity of the market.
People like to talk about the Asian market or the China market, but these are really quite diverse places, Boyce says. The diversity of cultures, cuisines and climates in a country like China is vast, so markets in cities like Shanghai, Beijing, Chengdu and Urumqi are entirely different.
“When a wine producer tells me they want to sell in China, I always ask them — which one?” Boyce adds.
Meiburg agrees, saying that a one-size-fits-all approach to marketing is no longer the way to go.
“Relationship building is very important in Asia, and winemakers or winery owners who make regular visits to the Asian markets are the most successful, providing a face, education and a story to the brand,” she says.
Savvy brands are focusing on social media platforms like Weibo and WeChat in China, as they have huge influence on consumer behavior, purchasing and developing brand loyalty. Across the rest of Asia, Facebook, Instagram and Twitter are prolific.
“Localizing marketing efforts is key, rather than employing a global strategy across all regions and markets. Forward-thinking brands and organizations look to local influencers to nurture their brands and provide insider expertise on the market,” says Meiburg.
Also, more emphasis is now being placed on wine education and the spread of wine culture.
“It is necessary to engage wine lovers and the trade with educational events, tastings and one-off experiences, and connect winemakers and wines of these regions with the who’s who of the wine trade and the ideal consumers for their markets,” she adds.
Pierre Ly, a associate professor at the University of Puget Sound in Washington, who has co-authored several research articles on wine with Cynthia Howson, a lecturer at the University of Washington Tacoma, says it is important to “taste your competition and understand it deeply”.
“Wine consumption, while growing, is still quite small, and wine competes with much more established beverages such as beer and baijiu. Local relationships to help navigate the complexity are crucial. And it’s not easy because global brands have to find a local partner who will tell their story effectively. And they have to figure out what this story should be,” Ly tells China Daily Asia Weekly.
It is interesting to look back at the case of global chocolate brands — how some have succeeded after much struggling, while others failed. The ones who succeeded are those that worked hard to tailor their approach.
Meiburg says that taking a long view is the key to winning consumers in the region.
“One must consider the unique cultural consumption patterns of each Asian country as well. Brands that enter the market with a long-term perspective are most successful,” she says.