Between 2005 and 2017, China orchestrated an impressive spectacle in the world of wine, experiencing a fourfold surge in global wine imports and securing a 7-8% slice of the global import pie. However, in the following years, the plot thickened, with China now holding only half of that global share at a modest 4%.
Skip ahead to 2022, and wine consumption—both local and imported—decided to take a nostalgic detour back to 2006 levels, leaving importers scratching their heads.
And here's the grapevine gossip: the actual national consumption might be sipping under the radar, thanks to the potential double counting of imported bulk wines cheekily blended into domestic production. Anderson, the George Gollin Professor Emeritus of Economics at the Australian National University and the founding Executive Director of the Wine Economics Research Centre, sheds light on the puzzle of Chinese wine statistics. He points out the scarcity of reliable data on wine stocks and the dance of accounting for smuggled imports.
The world of Chinese wine stats is a bit like a fine wine – complex, mysterious, and open to interpretation.
Figures from the State of the World Vine and Wine Sector published annually by the International Organisation of Vine and Wine (OIV),
Now, onto the sobering part. Per capita wine consumption in China reached its zenith in 2017 and has been on a slow descent ever since. The pandemic poured vinegar into the wine, resulting in a 47% dip in sales between 2019 and 2022. Forget blaming it all on Covid; deeper-rooted factors such as austerity measures and shifting consumer preferences have been key players. Local policies, discouraging conspicuous consumption and linking wine with Western exoticism, have given the industry an extra swirl in the glass.
A CHANGING SCENE
The pandemic and political dance-off have given the Chinese wine market a little makeover. Yet, a shift in the consumer landscape, led by the trendy Millennials and Gen Z squad, along with a growing emphasis on health, is primed to reshape future demand and potentially trigger a rebound.
Online sales, powered by platforms like TikTok (Douyin) or Little Red Book (Xiaohongshu) and the magic of influencer marketing, are now helping drive growth, creating a symphony in the expanding digital market.
Red wine remains a standout choice in China, thanks to its perceived health benefits and cultural significance. Among the various red varietals, Cabernet Sauvignon remains the top pick, while Pinot Noir, boosted by Burgundy, is gaining some serious street cred, especially in the upscale circles.
Despite a dip in imports, early signs suggest a growth spurt in China's domestic wine scene, particularly in the realm of Fine Wines. More consumers are cozying up to local wines, thanks to the ongoing national wave Made In China (Guochao), and certain domestic brands are getting nods for quality that could give international standards a run for their money. This positive trend we believe holds promise, as the younger generation's love affair with domestic wines might just spark a flirtation with the imported ones over time.
To sum it up, the 2024 outlook presents challenges, especially for importers specializing in bulk or entry-level wines, who may face the risk of discontinuing operations. But, fear not, it's not all doom and gloom. The rising fondness for artisanal and boutique producers, especially in the hip Tier 1 cities, signals an early stage of maturation.
Regardless of the hurdles, the China wine market's resilience and adaptability highlight its potential for a dynamic comeback in response to changing consumer preferences and market dynamics. Brands and producers are encouraged to navigate and capitalize on the opportunities emerging with this wave of change.
And how to do that? Well, that's the million-box question.
READ ALSO
[...] The 2020 vintage in Barolo and Barbaresco faced the daunting task of following the exceptional 2019. Despite the high standards set by its predecessor, the 2020 vintage brings its own unique charm, offering a genuine vintage of pleasure for both Barolo and Barbaresco.
In contrast to the vivid fruit purity and classical yet nervous structures of the 2019, the 2020 generaly open with a relaxed and generously fruity character, accompanied by succulent tannins and softer acidity.
Comments