Grapes of good hope

A view of Kleine Zalze vineyard in South Africa. Provided to China Daily

South African wine makers face growing challenge with marketing and promotions

Though the surging demand for wine has made China an important target market for wine makers, South African companies have been unable to make much headway due to stiff competition from European and other global wine makers. Wines from France, Italy, Spain, Australia, Chile and the US account for most of the foreign wine sales in China. Collectively known as "the big six", these nations have a share in excess of 90 percent of the Chinese foreign wine market.

But experts say that picture may soon change as more imports of South African wine look to be on China's agenda as a growing number of people are developing taste for exotic South African wines.

"Is it tough to sell South African wines? Yes," says Jim Boyce, a well-known wine writer, who runs the website called Grape Wall of China. "Most people know little about them. They don't have easy access to them in some cities, and instead tend to buy from brands and countries they know.

"But the situation is changing because there are distributors expanding throughout the country with South African wines in their portfolios, and there is a growing niche of consumers interested in trying new wines."

South Africa accounts for about 3 percent of Chinese wine imports, and there are about 20 importers of South African wines in China. The imports have been growing between 2007 and 2011, wine industry insiders say.

Wang Yuan, vice-general manager of Wineriver Trading Co, a firm that imports wines from South Africa, Chile and France, says that though South African wine is a latecomer to the Chinese market, it has been clocking better growth rates than wines from the old world such as France and Italy.

"Wines from South Africa have a very special fruity taste that is preferred by many Chinese. Most of the South African wines are priced reasonably, and hence have excellent chances of making inroads in China," Wang says.

In 2011, South Africa exported about 360 million liters of wine, with Europe being the largest export market. That figure represents about 43 percent of its wine production, according to the South Africa Wine Industry Information and Systems.

With the financial crisis playing spoilsport in Europe, South African wine makers are now increasingly looking to China to shore up profits and make up for the losses in Europe.

Chinese wine drinkers consume 300 million bottles of wine a year and the country is the fifth-largest market in the world in terms of wine consumption, ahead of the UK. A Vinexpo study forecasts a further 54 percent increase in consumption between 2011 and 2015.

Hein Koegelenberg, CEO of La Motte and Leopard's Leap Wines in South Africa, believes that unlike other countries, South African wines have a better chance of succeeding in China due to the different varieties that match all kinds of Chinese food and culture, says a report published by the US news website GlobalPost.

Chenin blanc, one of South Africa's typical grape varieties, is ideal for a growing number of white wine drinkers in the coastal cities of southern and eastern China, such as Guangzhou, Xiamen and Shanghai, where seafood is popular, industry experts say.

Pinotage, a red blend between pinot noir and cinsaut, can match richer dishes in China's northern provinces, because it can produce complex and fruity aromas at the same time.

"Most of the South African wines are food-friendly, although most of the Chinese consumers are yet to define the characteristics of taste," says Alberto Fernandez, managing partner of Torres China, one of the largest importers and distributors of wine in China. "As for packaging, they are mostly simple and easy to remember."

Currently the Spanish wine company imports just one wine brand from South Africa, Kleine Zalze red wine. Fernandez says that the company plans to add more wines from South Africa as the market matures and curiosity grows among sophisticated consumers for new varieties of wines.

Evidence that Chinese drinkers are developing a taste for South African wine can be seen in the results of a contest organized by Jim Boyce, founder of the wine website Grape Wall of China. For the contest, a dozen Chinese customers sampled 40 wines priced below 100 yuan and ranked them on different aspects. In each of the four years that the contest has been held, South African wines have been in the top three slots.

"This is a small sample and the wine is inexpensive, but it is still a good sign for South African wines," Boyce says.

Unlike other countries, South Africa has another unique calling card. Being a part of the BRICS club of emerging economies, it is pushing for better trade agreements involving fewer taxes and lower prices on wine exports to China.

Despite the enthusiasm from Chinese consumers, one reality that South African wine makers have to overcome is that they are still the small fish in a big pond.

"It is important for them to quickly step up promotional and marketing activities and thereby garner more customers in China. I don't think South African wines are doing enough now, and there should be more joint efforts involving the government," says Li Deimei, a wine maker and professor at the Beijing University of Agriculture.

Since early 2000, wine associations from France, Italy and many other countries have all set up offices in China. They have been involved in aggressive marketing campaigns and media initiatives to help consumers get to know their products better. In contrast, it seems that South African wine makers are not getting the right kind of support from the authorities within the wine industry.

"South African wines do have some advantages - a wine-making history of over 300 years, a good climate and so on, but to win the Chinese consumers is not just about who has the most strength but about who can do a better job in promotion," Li says.

lvchang@chinadaily.com.cn