The November 23, 2009 edition of the New Yorker contains a fascinating article by Evan Osnos titled “Letter From China – Reds: The creation of a wine-loving class.”
The article recounts a short period in the history of the A.S.C. Fine Wines company based in Beijing and run by two Canadians (a father-and-son team by the name of St. Pierre). Just as interesting as the trials and tribulations of the St. Pierre clan is the clear picture that Osnos’ article paints of fine wine consumption in China.
I’ll share some of those numbers with you in a moment, but before I do, let’s get the bottom line conclusion out of the way now: anyone who doesn’t think that China is not among the major players – if not the major player – in the world fine wine market needs to have a belly-button window installed (think about it… you’ll get it).
In a less than 15 years, China’s upper-middle class has gone from a “let’s mix red wine with soda” drinking culture to a group of savvy if star-struck fine wine and dining folk right out of a hackneyed, First-Growth-worshipping Wine Spectator lifestyle piece.
Welcome to the new world of international wine…
Here are the numbers:
- Between 2004 and 2008, the St. Pierre’s wine business grew 45%… per year.
- In 2007, the St. Pierre’s became the number one buyer of Bordeaux heavyweight Chateau Latour in the world.
- China now ranks just behind Germany in wine consumption, coming in at #5 worldwide.
- The “Lafite Effect” – named after another Bordeaux heavyweight producer and a term used to describe the driving up of luxury goods prices worldwide – is a result of Asian consumers’ demand for luxury goods as their quality of living increases; it is being driven by China’s demand for Chateau Lafite Rothschild wine.
- Lafite have taken notece – they are now developing a Chinese winery (in Shandong) in the hopes of producing the first ever ‘grand cru’ wine from China.
China may be the future of wine consumption, but a hefty part of that future has arrived smack-dab into the present. Want further proof that China has ‘arrived’ (when it comes to wine consumption)? Try this one on – in 2008, uber-critic Robert Parker held a $2300-a-head dinner in China: seven courses, black-tie, and wine, all atop the Great Wall.
Welcome to the new world economy – and don’t think that those First Growth Bordeaux wines are going to be any easier to come by just because the Western economy is in the toilet…
Cheers!
(images: great-wall-of-china.org)
Totally agree with China being the future of the wine market growth. After all 1.3 billion people that are not currently drinking wine can make a significant difference. In my recent blog, I did some simple math that estimates a $65 billion dollar market if we can get Chinese consuming 1/2 as much wine per capita as Americans drink. Pretty damn amazing!
Makes me want to get into the wine business ;) – and learn Mandarin
$65 **billion**? With a 'B'? Holy crap!
Is it just the upper middle class buying wine ? And are they buying just very high end wines ?
My point being, since a majority of the people are not " upwardly mobile " — Do you think there is a
demand in that country for inexpensive entry level wines ??
Interestingly, the New Yorker article stated that most Chinese drink Chinese wine. It's the new class with disposable income that are consuming the foreign wines, apparently for them it's the more French and expensive, the better.
My stack of New Yorkers is a few weeks high, and so I haven't read the piece yet, but I once tasted a Chinese wine–Dragon's Hollow Riesling 2006…and it tasted like plastic!
I've yet to have Chinese wine, but given the size of the country and its geographic location, **theoretically** some spots should be capable of making fine wine…
It's also a great spot for well known wineries to dump off excess inventory into a secondary market without damaging it's label/brand due to product dump.
Cash flow, rid oneself of excess prodcut hey can't sell in their primary market, etc.
Major challenge: Entrenched Portugese and French importers attempting to exert political muscle to keep cheaper new world wines out. Look no further than the Macau wine market.
Well my friend, there's another great spot for well known wineries to dump off excess inventory into a secondary market without damaging it's label/brand due to product dump – it's called the U.S. :-)
Top that news off with some news a while back with Google's CEO predicting that the web will be dominated by Chinese language content in the next 5 years. So much for all those years learning Spanish.
I've got two words for recent college grads: 'plastics', and 'mandarin'.
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