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How come the Chinese don’t love California wine the way they love French wine?

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It’s odd, when you think about it, that the Chinese have embraced French wine so fervently.  I mean, why wasn’t it California wine? China, over the course of its long history, has had very little to do with France. But the relationship between China and California goes way back–to a sad time (the 1800s) when California imported Chinese laborers to build its infrastructure, including some of Napa Valley’s buildings and wine caves. But today, that relationship is thriving. San Francisco is the gateway from China to the rest of America, the city’s Mayor is Chinese-American, and business interests in and around the Bay Area have been cultivating ties with their Chinese counterparts for decades.

So why did France beat California in the Chinese wine sweepstakes?

The conventional wisdom is that the Chinese are motivated by status, and nothing says “status” louder than a bottle of Lafite. That may partly be true, but it doesn’t fully explain the phenomenon. Of equal, and perhaps greater, importance has been the investment, in time and money, of the French government in promoting French wines abroad, and especially in China. Such organizations as the French Wine Society, which is endorsed by a range of French agencies as well as regional-based ones, have long been actively educating consumers and trade in China. And the CIVB–the Bordeaux Wine Bureau–has cultivated ties to Chinese consumer organizations. As links between the two nations have thickened, the French government has stepped up its efforts to promote wine to China’s growing legions of middle class. As Decanter recently reported, “France accounts for around half of the wine leaving the EU for China annually and the French government has not missed an opportunity to build bridges with the Chinese authorities.” (This is despite issues of taxes and “dumping” that have arisen between the two countries.)

I know that Wine Institute has been trying to cultivate ties with China for a long time. But my sense is that the American government, riven by political differences, has been hesitant to support or promote the sale of wine abroad, to a degree not present in France. That is, I think, due to the historic role wine has played in France. It is part of the essential French patrimony.

Still, I can’t understand why France beat California. It seems so counter-intuitive. As usual when I want more information on something, I turned to my Facebook friends and asked them, “Why do you think the Chinese prefer French wine to California wine?” I got a ton of replies. Here are some of them. Since their names already are public, I repeat them here.

Chris Kassel: “Cachet. Credit the CIVB for having done the required footwork…”.

Peter Nowack agrees. “French has more cachet than Californian. A lot of wine that moves into China is given as business gifts, so prestige plays a role…”.

Fred Swan: “Outreach and availability. European wine merchants have spent a lot more time reaching out to the Chinese market.”

Tim Vandergrift: “Fred Swan is correct. At a trade show I went to the French didn’t have booths: they had pavilions three stories tall, and they knew how to flatter, coax, schmooze and outright bribe Chinese buyers…”.

Bob Cranston: “Having lived and worked in Hong Kong I can tell you it’s simply a matter of familiarity. The French have been working the market in Asia for a very long time.”

Raymond Tosti: “The Chinese are still neophytes to the wine game, and probably still buy into the pre-1970s dogma of how the French are at the pinnacle of quality and California wines are the Charles Shaw of the world!”

Chris Brown: “Newer wine drinkers like lighter wines.”

Bartholomew Broadbent: “The answer is culture. Red is culturally a very important color [in China], so red is the wine of choice. And the Chinese are hardly exposed to anything worth drinking [from California]. Look at the wine list in a Chinese restaurant. They’re serviced by big distributors who put really bad wines on the list.”

Robert Conrad: “In Chinese culture, older is better. If something has been around for a long time it is more respected.”

Sheldon Richards: “I would suggest the British influence in Asia and the French wines they drank when they dominated.”

Doug Wilder: “From Wikipedia: French wine was the first foreign wine imported into China, in 1980.”

Barbara Lardiazbal: “This is a generalization, but in my experience Chinese people like French people more than they do Americans.”

Well, there were a lot more comments; you can see them all here.

As usual, thanks to my Facebook friends for always being so enlightening!

  1. I agree mostly with Raymond, however not because if quality. French wine is the standard in the wine world. All pinot noir is compared to Burgundy and all cabernet sauvignon is compared to left bank Bordeaux. French wine and French wine regions are more often than not how highly interested neophytes start to learn about the larger wine world. Case in point, just open any major wine book focused on the whole world (World Atlas, Oxford Companion, Opus Vino): France is always the first country discussed.

  2. There is also the question about government subsidies. The French seem capable of getting large amounts of wine into China at a sub $3 US price point. The financials do not add up as they are selling multiple brands at a loss (doubtful) or the suppliers are being made whole some other way. It is also not just the French…Australia, New Zealand, Chile, & Italy have all done a better job in China compared to the U.S. We have all of the potential but need a united front to grow market share. Lest we forget there is over 1 billion consumers over the drinking age in China.

  3. Scott Young says:

    A very informative article with many points of few all of which make sense….minus the fact about Chinese people liking French people more, I don’t think that is necessarily the case. Just from a pure marketing standpoint, the first to market with a quality product sets the standard and in the French Wine category they did everything correct (first, history, cache, solid on the ground marketing, etc. as stated above). California Wine has been behind from the beginning but is really gaining a solid foothold as higher quality wines enter the Chinese market.

  4. Hi Steve, you did not quote me accurately above. In fact, thanks to the misquote, I received irate complaints from our wine distributor in China who, understandably, took it as an insult.

    I went back to my original post on your Facebook.

    This is what you quoted me as saying:
    “The answer is culture. Red is culturally a very important color [in China], so red is the wine of choice. And the Chinese are hardly exposed to anything worth drinking [from California]. Look at the wine list in a Chinese restaurant. They’re serviced by big distributors who put really bad wines on the list.”

    I did not write that.

    I did not write “Look at a wine list in a Chinese restaurant”, what I wrote was “Also, have you ever looked at the wines on a wine list in a California Chinese restaurant”.

    “California” is most important to what I was writing and it was omitted from the quote.

    I didn’t write “They’re serviced by”. I wrote “These restaurants” (relating to California restaurants) directly following a comment about the wine list of a chinese restaurant in California. This in turn relates to your FB comment about the Chinese people living in California.

    I hope this is clear now! It upsets me that you gave the wrong impression. Distributors in China do a great job. It is big distributors in America that I was blaming.

  5. Bartholomew, I am sorry for the misunderstanding. In trying to edit your quote so that it would be more readable, I omitted the word “California.” For that I apologize to you and to your clients.

  6. Thank you, Bartholomew.

  7. Ian Ford says:

    Steve and Bart,

    My apologies for the distraction from a worthy discussion, and thank you both for the clarification.

    As a major importer in China of fine wines from France and from California (Ridge, Kistler, Harlan Estate, Inglenook, Tablas Creek, and the Delicato family of brands), I feel I’m pretty close to the question at hand. In the past and until now Gallo / Carlo Rossi has represented a huge proportion of the volume of California wine into China. They have shaped the perception of California wine in China, and not in the right way. This has been an obstacle to building faith and confidence in fine wines from California. Emerging markets need the benchmark leading regional brands to blaze the trail and build image for the region, and the stalwart export market leaders – Mondavi, Beringer, KJ – have not fulfilled that role in China. Having said that, we’re making great strides now with Ridge and others, selling every bottle we can get our hands on from the winery every year.

    Sopexa and organizations like the UGC have been active and effective in building image and awareness for “brand France” and for Bordeaux in the China wine space. There’s little doubt also that there is a natural attraction amongst Chinese new consumers to the long history, heritage, and allure of the great French estate wines.

    There is another more delicate issue though, and that is that most California producers are not wired for exports. There is a disproportionate focus on the USA domestic market, and exports are not often treated strategically, but as an afterthought. Very different from the French producers, who are hard wired for exports.

    As always there’s a lot more to it, but there’s two cents for you…

    Ian

  8. Steve –

    1) Chinese consumers of fine wines derive utility from the impression a wine makes on others about their economic or social status. In this case the utility is derived from both the sensory experience and the price they pay.

    2) Consumption still centers around entertaining and gift-giving occasions, with two major holidays — the Chinese New Year and the Mid-autumn Festival — accounting for about 60% of annual wine sales. Consequently, consumers are interested primarily in purchases that convey a suitable level of prestige, status and respect, all of which are important components of Chinese culture. France and French luxury products deliver against these requirements.

    3) We have no “flagship” wines that have broad recognition beyond Opus One. Opus One was the 8th most searched wine on the Chinese internet. Mondavi’s Reserve Cab Sav was 19th.

    The market is clearly moving in the direction of good quality mid priced wines and California should continue to benefit – but we need to get some flagship products out into the market to lead the way.

  9. Thank you for this commitment Bartholomew, This is nice post.

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