Sales in China will take Australian wine to the next level, the CEO of Australian Vintage said Thursday, after partnering with China’s largest online wine retailer. The arrangement sees Australian wine brand Australian Vintage Limited (AVL) partner with the newly-established Vintage China Fund, created by YesMyWine, China’s largest online wine retailer.
The Vintage China Fund has purchased 15 percent of AVL’s existing capital, raising 16.5 million Australian dollars (12.2 million U.S. dollars) for the Australian company. Australian Vintage CEO Neil McGuigan told Xinhua on Thursday that the key to the success of Australian wine in China all comes down to taste.
“I think it’s an exciting time for Australian wine. For our small company, the investment with Vintage China takes us to another level. It’s a huge opportunity,” McGuigan said. “Chinese people want to drink Australian wine, they understand that wine is great to pair with food and also that there are health benefits. But you have to take them on a journey, starting soft and transitioning into wines that have a bit more spine.”
McGuigan described the brand’s current presence in China as small, with sales to Chinese customers only accounting for 4 percent of its total sales. Forty percent of its sales come from Australian customers and another 40 percent from Britain.
That all could soon change for the award-winning wine company, and McGuigan hopes that in the short term the new partnership will result in 10 percent of total sales coming from China. To this end, McGuigan said he has initiated a new focus on branding, and a deeper cultural understanding of his Chinese customers, which he feels will bolster his company’s success.
“There’s tough competition all around the world, but I would say that our style is very appropriate for the Chinese customer.”
China overtook the United States as Australia’s largest wine export market in September 2016, the same year Australian wine exports to China reached 520 million dollars. Wine Australia attributes the current demand for Australian wine to the burgeoning Chinese middle class, who prefer quality over quantity.
Xu Guorong, president of the Chinese Wine Association of Australia and winery owner, told Xinhua the growing popularity of Australian wine is a sign of changing times.
“Just a few years ago, most Chinese people did not know much about Australian wine and in their mind, they had the idea that the best wines come from Europe, especially France. However, in recent years, we see that Chinese people are starting to realize that Australian wine is actually more to their taste as it tends to be fruitier,” Xu said. “Most importantly, French wine is quite expensive and French wine that is at the same price point as most Australian wine is usually not as nice quality.”
Xu had a clear message for Australian wineries who want to better engage with their Chinese customers.
“Manufacturers need to realize, people from different regions have different taste. For example, people from Shanghai tend to appreciate fruitier wine because their cuisine tends to be sweeter. Taste in wine very much relates back to cuisine and culture,” Xu said.
McGuigan said tourism has played a role in the growing popularity of Australian wine in China. The winery owner even has Chinese-speaking staff at his cellar in Hunter Valley, a region in the state of New South Wales known for famous wineries.
McGuigan said cellars in the Hunter Valley have recently experienced a boom in Chinese visitors, who want to sample and buy Australian wines.
“We are seeing more opportunities for Chinese people to visit cellars in Hunter Valley. The cellar is seen as the window to the brand, so we always make sure to treat our Chinese guests to a special experience,” McGuigan said.
In a 2016 survey by Tourism Australia, good food and wine was ranked as one of the three most important factors Chinese tourists consider in choosing a holiday destination. Year 2017, the official China-Australia Year of Tourism, should see even more Chinese tourists flock to Australia’s famous wineries.
Xu said the industry still needs to put effort into gaining the interest of Chinese customers.