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Perfect Pairing, CNY Wine and China’s Consumers

Perfect Pairing, CNY Wine and China’s Consumers

The Finger Lakes region has become a renowned wine-producing area in the United States, developing an international reputation. This is especially true in one of the world’s fastest growing fine wine markets: China. Already the number one consumer in the world, China is also the fourth largest export market for U.S. wine. The prestige wines of Bordeaux and Napa Valley currently dominate Chinese imports, but livableCNY found enormous potential for the next generation of NYS wines.

A Thirsty Market
As their wealth rises, Chinese consumers are seeking wines that partner well with traditional cuisine. According to data from the General Administration of Customs of the People’s Republic of China, bottled wine imports increased 5.47% from 2012 to 2013. China imported more than 287 million liters of bottled wine with a total value over $1.4 billion.

Wine consumption in China is growing at about 15% per year. According to the projections from the Global Wine Industry Association, by 2017 China’s wine consumption will increase to 3 billion liters from 2.8 billion liters, a total value in excess of 90 billion RMB (about $14.5 billion. Of that number, imported wine will account for more than 40% of sales).

“New York wine has the fragrance of Australian wine and the delicacy of French wine…”

–Renping Chen, wine importer from Guangzhou, China

Mr. Renping Chen, an entrepreneur from Guangzhou, China who has imported US wine for years, says that “although New York wine is not yet as famous in China as those from Napa Valley, it enjoys a good reputation.”

Mr. Chen says there are three reasons for the rising interest in New York wines. First, while it might surprise the vintners at Swedish Hill, the Finger Lakes benefits from the fame of New York City. Manhattan is a world cultural capital, and the entire state benefits from the association.

Second, New York wines are a perfect match for the Chinese palette.  “Many of the Rieslings produced in the Finger Lakes pair well with Chinese dishes.” says Chen. “Guangdong cuisine (known internationally as Cantonese food), pairs with light white wines quite well. The wine complements rather than covers the flavors of the dishes.” He also noted that the unique aromas of Riesling bring a whole new set of flavors to a dish. “New York wine has the fragrance of Australian wine and the delicacy of French wine. There is a balance, which is favored by Chinese consumers.”

Finally, New York wines are priced very attractively, especially to those Chinese consumers still learning about wine. That affordability means buyers can explore many options to find wines that match their personal tastes and preferences.

“Mid-range imported wines attract new customers who used to purchase local low-end wine, but now find they can buy higher quality wine with only a little more money” says Chen. “They’re willing to spend.”

Grape vines at the Swedish Hill Winery south of Seneca Falls. Swedish Hill has over 80 acres under cultivation, and also sources grapes from other Finger Lakes growers.

Grape vines at the Swedish Hill Winery south of Seneca Falls. Swedish Hill has over 80 acres under cultivation, and also sources grapes from other Finger Lakes growers, to make their award-winning wines.

The question now is whether CNY wineries can develop the production capacity as well as the marketing and sales channels to take advantage of the growing Asian markets.

The Finger Lakes today has some similarities to Napa Valley in the 1960s when Ernest and Julio Gallo dominated the California wine industry. New York agriculture is dominated by the dairy industry, and the wine industry is only just starting to find its potential. What CNY vintners need is a leader who can champion the region and bring focus to the industry, much like Robert Mondavi did for Napa.

Today, the drive along California route 29 takes you past vineyard after vineyard with famous names like Opus, Rubicon, Grgich Hills, Krug, and Peju. Napa Valley is renowned for its Cabernet Sauvignon, the perfect grape for the climate and soil. All of it grew from a united vision among a few key leaders in the 60s and 70s who built the industry we know today.

Looking for directions. From Swedish Hill, signs point to other destinations along the wine trail.

Looking for direction. From the entrance to Swedish Hill winery, signs point to other destinations along the wine trail.

The Finger Lakes is starting to gain fame for its signature wine too. Just as Napa and cabernet were a perfect match, CNY’s semi-dry and sweet Rieslings, and ice wines, are the product of the right grape grown in an ideal climate and managed by wine makers with increasing expertise. What remains to be seen is whether the growers can work together and with policy makers to turn the Finger Lakes into the world’s best source for these wines. With the rising buying power of Chinese consumers, this seems like a crucial time for the region.

Fred Frank, Winery President at Chateau Frank shared some of the business challenges he faces. In a culture that demands a strong personal relationship before developing a commercial relationship, finding a reliable partner in Asia can be an arduous process. “We did have a distributor for China and Japan but they developed financial trouble. It’s difficult to find a reliable importer who has the necessary financial backing. We’ve heard stories of other wineries dealing with these importers and not getting paid, or paid very late, but we are in the process of finding new importers. We’ve sent samples and are waiting to hear back.”

The New York Governor’s office is helping as well. In October 2012, Governor Cuomo hosted a Wine, Beer and Spirits Summit to identify ways the State could encourage growth in the industry. One result was the creation of Taste NY an initiative dedicated to opening markets for New York’s food and beverage industries. Albany has also made a number of regulatory changes including reducing the administrative paperwork requirements governing wine producers. If the Legislature can do more to facilitate international trade it would bring increased vitality to the winery business.

Growers need to develop their global ambitions as well. Sandy Stacey, half of the couple that owns Black Bear Winery in Chenago Forks says they have more to do if they are to tap the world market. “We don’t ship internationally. We only began to ship within the United States in the last year. To ship internationally, we still have a lot of hoops to go through.”

That statement sums up CNY’S uneven capacity and massive potential. Growers have responded positively to the policy changes out of Albany, but issues like distribution channels and production capacity remain to be resolved. And it would be a shame not to tackle the problems. The wines made at Swedish Hill and other wineries in the region are good—some of them are world-class. Slowly but surely world demand is rising for what the Finger Lakes vintners are producing. As more of the global market comes calling, there will  be no reason not to grow more grapes, produce and sell more wine, and toast everyone’s success.

 

About The Author

Zixin Li

Master of Science in New Media Management

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