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!
I have a friend in China, Steven Yuen (Hi, Steven!), I met through my blog (I never met him in person) who occasionally translates my posts into Chinese; here, for example, is his rendition of my recent piece on the World Wine Guys.
It’s been an interesting process, as Steven sometimes has to ask me to explain certain terms I use, in order for him to translate. For example, a while back I used the words “terra rauncho” and Steven, being entirely mystified by this neologism, naturally enquired. He also asked about “fruitily-extracted,” as well he might; it’s a bizarre phrase that, if you Google it, results in no hits at all, except for my Aug. 2012 post (and Steven’s translation of it). (I may actually have the honor of having introduced a brand new phrase into wine-speak!)
Steven has shown a high interest in “cult wines” because, as he wrote, “the terroir about their vineyards, the philosophy of their winemaking, and the character about their wines” fascinate him. He asked for certain information. I replied that, first, he would have to define “cult wines” and give me some examples. He did: Harlan Estate, Screaming Eagle, Shafer, Stag’s Leap Wine Cellars, Joseph Phelps, Duckhorn, Hall and Diamond Creek Lake [Vineyard]. These wineries, Steven called “bench-mark.”
I tried to put myself into Steven’s shoes and figure out what this fascination is, before realizing that it’s not endemic just to China, or to emerging wine cultures, but to the nature of wine itself. Mankind always has hierachized wine; as far back, practically, as we have historical records, there have been rare wines for Caesars and common plonk for everyone else.
Readers of this blog know that one of the questions that interests me is where the tasting experience actually occurs: In the mouth, or in the brain? Or can we even separate the two? I have written many times that blind (or double blind) tasting is a way to eliminate the brain, or, rather, the thoughts, expectations and biases that it manufactures, from the tasting experience. If you do that, no wine in the world is worth more than a certain amount–certainly not the hundreds and thousands of dollars some wines fetch. Blind tasting is the great leveler.
So to justify spending $400 on a bottle of wine, it had better appeal to the brain, not just the palate.
Of course the Chinese are curious about these cult wines. We should be glad: it means they (or some of them, at least, such as Steven) are paying attention to California, not merely to Bordeaux. They understand that California is a very great wine region. What we need to convey to them is that Napa Valley is not the be-all and end-all of California. That will take time. But at least, this fascination with Napa Cabernet is a start.
The Holy Grail for California wine has been China. With its hundreds of millions of emerging upper-middle class consumers, Cali producers see a vast new source of demand. The problem is how to persuade all those Chinese that they want California wine.
We already know they want French wine. Parker has been investing his time and energy heavily in China for many years (I remember raised eyebrows when he started visiting with regularity, but he was ahead of his time, wasn’t he?), and now, of course, a Singapore outfit owns Wine Advocate.
RMP himself is now back tasting California wine. (Ironic, isn’t it? First he said he didn’t want to anymore. Then “the troubles” went down with Galloni, and The Man Himself was compelled to return to a beat he’d previously said he was tired of.) So, while the Wine Advocate is competition for the magazine I write for, Wine Enthusiast, I do think that Parker is in a position to publicize to wealthy Chinese consumers the Napa cult wineries he likes. If I were a cult Napa producer, I’d be all over Parker, inviting him to the winery, getting my wines into his hands, then keeping my fingers crossed for a 99 or even a perfect 100.
But I also think Wine Enthusiast has growing clout in China, a clout that will only increase over time. Last year we began a Mandarin edition of the magazine, and my understanding is that it’s doing quite well. It was, I believe, the first important English-language wine periodical to be published in the Chinese language. And, as that edition also reports on my scores and reviews of Napa cult wines, I think it’s likely that those scores will drive sales, too.
Of course, some Napa wineries don’t have to worry about scores. Yao Ming’s wines ($625 for the 2009 Family Reserve) were an instant hit in China, for obvious reasons. I suspect that Screaming Eagle and Harlan also are doing well. The kind of people in China who can afford them have extensive connections with the west. They tend to speak English and are aware of the consumer goods, including wine, that are popular and prestigious in America. They take their cues from rich Americans and are ever alert to symbols of status and preference. Since critics like Parker tend to rate these wines highly, that should make them in high demand in China.
What about the other hundred or so Napa cult Cabs?
It’s terribly difficult for individual wineries to market themselves in China. But the Napa Valley Vintners has been plying those waters for a long time. This article, from the Huffington Post, does a good job describing the general contours of breaking into the Chinese market, but to me, the bullet quote is from Harlan’s GM, Don Weaver: “Trying to solve the China puzzle is the most exciting part of my job right now.” The adjective “exciting” is an interesting choice; Don might have used “challenging,” but when you rise to meet a challenge, and then perhaps exceed it, it is exciting. (I felt that way when I was awarded my first Black Belt in karate.)
Napa wineries (and others in California) also recently got a boost from Gov. Jerry Brown, a longtime friend of the wine industry, when his April trade mission to Shanghai (which included Wine Institute’s CEO, Bobby Koch), promoted the state’s wines; the promotion also included a “Taste Napa Valley” event sponsored by Wine Institute.
These activities all are promising, and the people organizing and managing them are very good at what they do. But there’s a limit to how effective they can be at the individual winery level. If you’re selling a 93 point Cabernet for $100 or more, and you don’t have an ultra-famous name and have only been around for a few years, you’re going to have a tough time, whether it’s here in the States or in the People’s Republic. It’s those Napa Cabs I wonder about. Who’s buying them? Who will be buying them? Maybe their proprietors are so rich they can afford to break even, or even lose a little money, for a decade or two. I have a feeling they’re about to find out.
I was reading the other day that Ningxia, the Chinese autonomous region (roughly equivalent to a U.S. State) in north-central China, “will introduce the first winery-based classification system in China within the next few months.”
The article explains how there will be “6 classes in this classification.” The director of the governing body [of the] Ningxia Development Bureau for Grape and Flower Industry explained its rationale this way: “In order to ensure quality, we raise the bar for entering the classification.”
Ningxia, in case you don’t know, is China’s largest-producing wine area, with a continental climate. Summer highs run to 63-75 degrees, with moderate rainfall. The foreign wine community is interested. Earlier this year the Portuguese government invested millions in the Ningxia wine industry. French companies that have invested in Ningxia include LVMH and Pernod Ricard, according to Jancis Robinson.
Jancis titled her article “China’s most promising wine province?” (but note that hedging question mark). She recently went to her first Ningxia Wine Festival–only to find that “Riedel got there several days before me.”
And whither Riedel goeth, so goeth sales.
Ningxia’s largest domestic producers are Changyu and Dynasty, who together own 20,000 acres of vineyard land. Meanwhile, the China Petroleum and Chemical Corporation as well as the household appliance company Midea have begun investing in Ningxia’s wine industry. That oughta tell you how big the Chinese think this thing is getting.
I haven’t tried any Ningxia wines, but two years ago the Decanter trophy for red wine from the Middle East, Far East and Asia went to a 2009 Bordeaux blend from Ningxia province called Jiabeilan, produced by Chateau Helan Qingxue, which also won a silver for its Classic Chardonnay and a bronze for a Riesling.
But back to the point: does China need a classification system? Here’s China Daily’s argument that it does:
“it is still difficult for many Chinese customers to determine the class of that they are buying. According to knowledge of persons in wine business, this is due to the fact that nation-level wine classification does not yet exist,though some wine practitioners do follow their systems they developed on their own. It is obvious not convenient for general wine consumers.”
Given the notorious insecurity Chinese consumers experience about buying wine (unless it’s a world famous cult brand, which not even most upper-middle class Chinese can afford), it’s no wonder that local authorities will try to convey a golden halo on their wines, in the form of such classifications. There is, though, an arriviste mentality here: China is so anxious to be accepted on equal terms with the West that they’re importing our customs and traditions even before they have had time to develop organically.
China might take pause and understand the limits and dangers of classifying wineries. In France, it’s led to a rigid, price-based sclerosis that hasn’t really served the consumer. The Chinese might also look at California’s aborted attempts at classification. There was Roy Andries de Groot’s wackily ambitious 1982 effort, “The Wines of California.” The most notorious was Jim Laube’s 1989 attempt, “California’s Greatest Cabernets,” in which he created five “Growths,” like in Bordeaux. Jim’s intentions were honorable, but he proved, albeit inadvertently, that it cannot and should not be done.
And can you imagine the squeals of protest when some Chinese wineries are left off the classification list altogether, or earn a rank they feel is dishonorable? The Chinese no longer are a people to sit by mutely while “the authorities” make decisions from the top down. They want to have a say in things. For all these reasons, and more, I’d advise the Ningxia Development Bureau for Grape and Flower Industry to stay away from this sticky wicket. Let the market create the classification, not the government.
It’s so interesting that the production of wine around the world fell to its lowest level in 37 years in 2012, due to dismal crops in France, Spain and Argentina. Contrast that with the all-time high, record grape crush last year in California, and it looks like good news for Golden State vintners who export their wines. But will it lead to spot shortages here in the U.S.?
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I’ve never tasted a Chinese wine. In fact, I wouldn’t even know where to buy one. I do a fair amount of shopping in Oakland’s Chinatown, but the only wines I see there are from the big California producers. But if I could try a Chinese wine, it would be Chateau Changyu. If it’s good enough for Berry Bros. & Rudd to sell it in London, then it must be pretty decent. The [British] Telegraph reports that the venerable British shop–314 years young–is “the first major British retailer to give tipples from [China] a permanent place on its shelves.”
I don’t know if Chateau Changyu is the same as the “Chateau Changyu-Castel” that Susan Kostrzewa, now Wine Enthusiast’s Executive Editor, reviewed back in 2007. She tasted 3 wines–a Chardonnay, Cabernet Sauvignon and Cabernet Gernischt–and gave them pretty mediocre scores. Maybe things have improved since then. We may be hearing more about this Chateau Changyu. It’s “the 10th largest winery in the world,” according to the winery’s website, and also is the 79th biggest company in the People’s Republic. If anybody wants to send me some samples, I’ll gladly accept them.
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I’m going to be doing my annual wine tasting and educational seminar at the University of California Haas School of Business in a few weeks. They have a student wine club that has about 65 members. These kids are smart and curious and always ask great questions, which is why I like to go. This year, the club’s president told me the MBA candidates are really curious about how I view my job as a wine critic. Their other speakers this year have all been winemakers; as the president emailed me,
…there were two different schools of thought [among the winemakers], one positive and one negative. Some winery owners/ winemakers felt that critics have undue power. They brought up the “Parker-ization of wine”(and said they disliked it) and one of the wineries said they intentionally refuse to submit their wine to critics. Another group said that critics play an important role because there is so much wine out there, it helps the public make educated purchases. This led to a discussion on what one should buy and brought up the question: “is it okay to buy bad wine if you like it?
These are issues of longstanding commentary here at steveheimoff.com, and I think most of my readers know where I stand. However, it’s important to keep in mind that a new generation mostly in their twenties hasn’t really digested the role and importance of critics, and has real questions about what we do, and about how they should behave with respect to us. Are we dinosaurs in the Age of Twitter, or are we experts worth heeding? I look forward to enlightening them on these points. As for “is it okay to buy bad wine if you like it?”, Wow. Where to begin? That could be the topic of an entire class.
What will happen when the Chinese discover Napa Valley Cabernet Sauvignon?
For the answer, we look to Bordeaux. China is now Bordeaux’s largest export market, a position long held by Britain. As a result, prices for Lafite, Latour and company, already high, have soared, placing those wines effectively beyond the reach of all but the world’s one percenters, including those in China. Chinese people are buying up Bordeaux chateaux, with at least six now so owned. It’s impossible to forecast an end to China’s Boreaux-mania. Indeed, there’s no reason at all why it should stop. It’s just getting started.
The laws of supply and demand being what they are, it’s likely that prices of the top Bordeaux will continue to rise. They’ve been going up for years, anyhow, making this one of the longest sustained periods of steady increases in Bordeaux’s long history, to judge by Eddie Penning Rowsell’s record-keeping in The Wines of Bordeaux.
But even a wealthy Chinese collector must blanch to some of these prices. What happens when top tier Bordeaux starts to be too expensive in Beijing, Hong Kong, Shanghai? People look to second tier Bordeaux. That’s exactly what we see happening: Decanter just reported that, despite some softening in pricing for Lafite and other First Growths on the auction market, prices for “blue chip second wines” are “robust,” a phenomenon that “is almost certainly due to the Chinese market.” The Chinese, it seems, will pay more for a wine like Carruades de Lafite (from Chateau Lafite Rothschild) or Chateau Margaux’s Pavillon Rouge than will an American or European.
So we already see incredibly high pricing pinching the prices of First Growths in China, leading to increased demand for “lesser” but still prestigious Bordeaux. What does it mean for Napa Valley Cabernet Sauvignon?
Pretty obvious. After Bordeaux, what’s the most famous region in the world for Bordeaux-style wines? You got it. Chinese interest in Napa Valley is on the rise. A delegation of Chinese wine industry types recently visited the valley, and of course Yao Ming is going to further raise Napa’s visibility in his homeland when he starts selling his own wine there.
You can see where this is heading. it can be only a matter of time before the top ranked Napa Cabernets hit China bigtime. (I suspect the Chinese will have a harder time with Meritage-style wines with proprietary names.) The Napa Valley Vintners, sensing opportunities, last year sent a major league delegation to the PRC; it included Amuse Bouche, Rubicon, Dalla Valle, Wilver Oak, Moone-Tsai and Heitz. Janet Viader, who also was part of the mission, told the Napa Register on her return, “I was very inspired to pursue opening the Chinese market for us.”
Truer words never were spoken.