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Importers toast the future of South African wines

By Lu Chang | China Daily | Updated: 2013-01-12 08:24

 Importers toast the future of South African wines

The Kleine Zalze vineyard in South Africa. The nation's wine makers are being forced to make greater inroads in China, after falling demand from Europe. Provided to China Daily

 Importers toast the future of South African wines

There are about 20 companies importing South Africa wines to China. Provided to China Daily

 Importers toast the future of South African wines

Alberto Fernandez, managing partner of Torres China

As the taste for foreign wines grows in China, the Cape producers look to the country to make up for falling demand in the European market, reports Lu Chang

Despite a surging demand for wine in China, South African makers have been unable to make much headway in the market, due to stiff competition from European and other major wine producing countries.

Wines from France, Italy, Spain, Australia, Chile and the US - collectively known in the industry as "the big six" - account for 90 percent of the country's foreign wine consumption, the latest industry figures show, with South African wines accounting for just 3 percent of the Chinese market.

But experts now say that could all be about to change.

"Is it tough to sell South African wines? Yes," said Jim Boyce, a well-known wine writer, who runs the industry website Grape Wall of China.

"Most people know little about them. They don't have easy access to them in some cities, and instead tend to buy from brands and countries they know.

"But the situation is changing because there are distributors expanding throughout the country with South African wines in their portfolios, and there is a growing niche of consumers interested in trying new wines."

There are around 20 companies importing South African wines to China, including Wineriver Trading Co, which imports wines from there, Chile and France.

Wang Yuan, its vice-general manager, said that though South African wine is a latecomer to the Chinese market, it has been enjoying better growth rates than wines from the old world such as France and Italy in recent months, and he expects that momentum to be maintained.

"Its wines have a very special fruity taste that is preferred by many Chinese.

"And as most South African wines are priced reasonably, they have an excellent chance of making inroads into China," Wang said.

South Africa exported about 360 million liters of wine during 2011, produced mainly in its Western Cape province, with Europe being its largest export market. That figure represents about 43 percent of its wine production, according to the South Africa Wine Industry Information and Systems.

The recession in many economies across Europe, however, means that many are now looking to other markets, as orders from the continent fall, and China represents massive potential to make up for those lost orders.

Chinese wine drinkers consume 300 million bottles of wine a year and the country is the fifth-largest market in the world in terms of consumption, ahead of the UK.

A recent Vinexpo study has forecast a further 54 percent increase in consumption between 2011 and 2015.

Hein Koegelenberg, CEO of La Motte and Leopard's Leap Wines in South Africa, told US news website GlobalPost recently that he believes the country's wines have a better chance of succeeding in China than many others because of the varieties available, which can be matched with all kinds of Chinese food and culture.

Industry experts say they are especially favorable to wines made from the Chenin blanc, a grape originally from the Loire valley of France which is also widely grown in South Africa. It is viewed as ideal for a growing number of white wine drinkers in the coastal cities of southern and eastern China, such as Guangzhou, Xiamen and Shanghai, where seafood is popular.

Also Pinotage, a red wine grape which is a cross between Pinot noir and Cinsaut, can match richer dishes in China's northern provinces, because it can produce complex and fruity aromas at the same time.

"Most of the South African wines are food-friendly, although most Chinese consumers are yet to define their characteristics of taste," said Alberto Fernandez, managing partner of Torres China, one of the country's largest wine importers and distributors.

"But the packaging of wines sold in China helps a lot, because they are mostly simple and easy to remember."

The Spanish-based wine company imports just one brand from South Africa, Kleine Zalze red wine, but Fernandez said he plans to add more as the market matures and curiosity grows among the country's increasingly sophisticated consumers.

Jim Boyce, Grape Wall of China founder, holds an annual survey on his website, and the evidence from that is pretty conclusive, that there is a rising tide of interest in South African wines.

A dozen Chinese customers sampled 40 wines priced below 100 yuan ($16) and ranked them on different aspects.

In each of the four years the survey has been held, South African wines have been in the top three slots.

"This is a small sample and the wine is inexpensive, but it is still a good sign for South African products," Boyce added.

And South Africa has another big selling point.

As part of the BRICS club of emerging economies (that include Brazil, Russia, India, China and South Africa), it is pushing for better trade agreements which will involve fewer taxes and lower prices on wine exports to China.

However, Li Deimei, a wine maker and professor at the Beijing University of Agriculture, said South African exporters to China - as small fish in a big pond - must move quickly to promote and market their products, as the country's appetite for wine continues to grow.

"I don't think South African wines are doing enough right now, and there should be more joint efforts involving the government, he added.

Since early 2000, the national wine associations of France, Italy and many other countries have set up offices in China. They have been involved in aggressive marketing campaigns and media initiatives to help consumers get to know their products better.

But experts suggest that South African wine makers still lack the official industry support they need to make serious inroads into China.

"South African wines do certainly have some great advantages over their competitors - the country has a 300-year-old wine-making history, a good climate and so on," said Li.

"But in today's market, to win over Chinese consumers is not just about who has the most products, it's about who can do the best job of promoting themselves."

Contact the writers at lvchang@chinadaily.com.cn

(China Daily 01/12/2013 page10)

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