When it comes to popular exports from China, wine historically hardly comes to mind. Long dismissed at as a low-end libation, Chinese wine shocked the world last year when Helan Qing Xue’s red Bordeaux blend “Jiabeilan” from 2009 won a prize at the Decanter World Wine Awards in London, a first for China.
The warm approval for “Jiabeilan” granted by an internationally acclaimed competition signals a pivotal point for domestic wine in China: Although wine is a sunrise market in China, with the right price points, it has the promise to flourish and perhaps even rival the vineyards in Germany, France and Italy.
The rising demand for wine in China is nothing to scoff at either—the annual rate of growth of the Chinese wine market is more than 20%, while the global rate is less than 1%. According to research by Ipsos, red wine surpassed Chinese traditional liquor as the most popular alcoholic drink last year. Currently, imported wines represent 25% of the market share in China, with 45% coming from France. Australia and Chile are the second and third largest exporters of wine to China, netting about 15% of the market each.
But the bulk of wine consumed in China is supplied locally by approximately 500 mainland wineries, with 140 alone in Shandong. Other provinces championing vineyard excellence include Hebei, Gansu and Yunnan; and even Xinjiang is known for its remarkable but inexpensive wines despite arid conditions. Ningxia has also caught onto the lucrative lure of wine, announcing in July 2011 its plans to establish China’s largest grape culture corridor in Mount Helan.
Home soil for premium brands
The phenomenon, however, is much larger than just an awareness of wine in China. While the majority of wine in China is still deemed as cheap, subpar options, boutique wineries in China are on the rise, as they blend exceptional local creations that hold their own against fine wines in the United States and Europe.
Marc Curtis, the founder and CEO of China Wine Tours, is a close eyewitness to the developing appetite for wine in China, “When I talk to people about wine in China, I usually get two questions. One, there’s wine in China? And two, is it leaded or unleaded? But there are smart producers [in China] who are concerned about the quality. You just have to know who they are.”
Silver Heights and Grace Vineyard are two such pioneers. Tucked away in Ningxia, boutique winery Silver Heights is well-known for its “Silver Heights Family Reserve” and “The Summit” wines, both blends of Cabernet Sauvignon, Cabernet Franc and Cabernet Germischt. The vineyard’s “Silver Heights Family Reserve” 2009 took the top trophy for the Best Chinese Wine in the 2011 China Wine Challenge, while “The Summit” 2009 placed second in a blind-tasting competition, beating out several of its Bordeaux equivalents.
Silver Heights serves a niche market in China, with only 10,000 to 20,000 bottles of output each year. It is distributed primarily in five-star hotels such as Grand Hyatt and upscale wine stores in China.
Located on Taigu Plateau, 40km from the city of Taiyuan, Grace Vineyard is another such treasured find in China’s wine market. In the same blind-tasting competition in which Silver Heights’s “The Summit” 2009 came in second, Grace Vineyard’s “Chairman’s Reserve” 2009 famously received the top honors and took home first prize.
According to Jim Boyce, administrator and contributor of the blog Grape Wall of China, there is room for improvement for Chinese wines, but the consistent accolades for vineyards like Silver Heights and Grace Vineyard demonstrate how China as a burgeoning wine region has competed well internationally so far.
Tours of vineyards and wineries in China are earning higher interests. Shanxi-based Grace Vineyard is host to around a dozen guestrooms for visitors, as well as fine dining on the estate that specializes in local cuisine. Aside from wine-tastings, guests are also welcome to other activities at vineyard, including barbeques, fruit-picking and cycling. Noted for its old-fashioned hints of cherry and oak, Grace Vineyard’s award-winning “Deep Blue” 2008 is sure to pair nicely with the quaint landscape of Shanxi.
For the more involved traveler, China Wine Tours is also an excellent escape, especially for those interested in a greater understanding of fine wine in China. For CEO and founder Marc Curtis, it’s all about featuring the best and brightest vineyards, “[There are wineries] with RMB1000 priced bottles of wine that make the mistake of thinking price means quality. But it doesn’t…When I choose places to tour, I look for the more unique and concerned vineyards that care about excellent tastes and aromas. Those are the vineyards that provide truly great tasting experiences for our clients.”
The domestic demand is picking up. Last year, about 20 individual wine connoisseurs hailing from abroad and Beijing, Shanghai, voluntarily joined the grape picking and wine making process at Silver Heights, says Emma Gao, owner of the winery. “We have been mostly focusing our attention on raising quality, since we are a small family business,” said Gao. The next step for Silver Heights is to set up a 600-acre vineyard near tourism hotspots in Ningxia. “We will consider gradually work towards offering more diversified experience for wine lovers,” said Gao.
Cash-flush Chinese wine aficionados and MICE travelers aren’t restricted to tours and exhibitions in the mainland either. Between July 2010 and June 2011, Chinese consumers spent US$311 million on Bordeaux wine between July 2010 and June 2011, which has led to a bump of Chinese tourists swarming to Bordeaux. Yan Vacher, the general manager of Grand Hotel de Bordeaux and Spa, predicts about 15% of the hotel’s guests in 2012 to be from mainland China. Eager to learn about the typical Chinese wine drinker, resorts like Grand Hotel de Bordeaux and Spa and German’s Mainz Tourism Bureau recently targeted their marketing efforts to China as well, including promotions for private vineyard tours.
Long-lasting legacy or flash in the pan
Although the wine market in China is anticipated to rise by 93% by 2014, it’s still difficult to predict what lies ahead for local fine wine culture and tourism. According to market research by the European Union SME Centre, wine consumers in China are typically of one of three profiles: affluent Chinese with limited knowledge of wine who purchase recognizable French brands as a symbol of status; wine drinkers in large metropolitan cities like Beijing and Shanghai who regularly attend wine tastings and other wine appreciation events; and finally, those who have studied or worked overseas with extensive knowledge of wine who seek out hard-to-find vintage wines and own private collections.
Whether this tiny sliver of consumers for fine wine diversifies into greater mainstream culture or remains an expensive interest for the elite is undetermined. Lucky Tan, an event coordinator for Interwine China, argues that the rising middle class has led to a more discerning consumer who champion European wines for the outstanding craftsmanship. Curtis, agrees to certain extent with Tan, but seems much more optimistic about the fledging coterie of smaller vineyards and wineries in China.
Nonetheless, the wider the audiences wine culture and education reaches, the higher the market demand for boutique wineries and vineyards to create special blends with unique, regional characteristics. “Initially, the Silver Heights wines were only enjoyed by foreigners, but now local government officials and SOEs tend to pick our wine for entertainments,” said Gao, “Their taste is certainly getting more sophisticated.”