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Wine in China: Future bounty for US labels?
Thursday, 15th October 2009
Source : KDM Global Partners, LLC
Lettie Teague of Food & Wine posed an interesting query recently: What if everyone in China drank just one bottle of wine a year? With a population of well over 1 billion, China would move ahead of all of Europe combined.

Of course, this is the sort of stuff wine producers dream about (atogetherwith producing 100-point wines), but the reality may not be so very far behind.

In the past decade alone, China (as well as all of Asia) has seen a dramatic increase in the consumption of wine. And it is expected that sales of wine in China alone will grow by more than 80% by 2011. Without a doubt, China is the world's fastest-growing wine market.
 
But the wine business in China is not for the faint-of-heart...or liver. There are great opportunities, but also lots of challenges.
 
Chinese consumers are greatly influenced by globalization, generally. And wine is regarded as an icon of western culture, thus hugely popular among young people in China. And, as the economic growth continues, a sizeable middle class continues to emerge. Both segments are potential customers for this product market - and the numbers are formidable.
 
Chinese consumers are not yet, in general, versant with wine. Most aren's familiar with the various world viticulture regions, the prominent varietal choices, what distinguishes great wine from good wine, how to pair wine with food, how to store wine, etc.  While wine awareness and education is absolutely on the rise in China, sales growth will, of course, accelerate even more as wine education and product exposure accompanies it.
 
There is also the element of China's food culture. Presently, wine is enjoyed primarily in family occasions and only secondarily in business. While the use of wine in business is increasing, habits are sometimes hard to change.
 
Other Chinese market realities will need to 'evolve' in order for wine to become as integrated into consumer culture as it is here in the West.

Examples are:
  • Chinese diners still prefer beer and spirits with their meals;
  • Some Chinese still believe that wine is "not healthy;"
  • Lack of knowledge about 'wine culture' inhibits growth;
  • Distribution obstacles throughout China - i.e., the major cities are one market and the "rest of China" is another.
Further, marked ethnic differences across China may inhibit market growth because of accompanying preferences.

More information can be obtained here: www.KDMGlobalPartners.com
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