New opportunities in China for U.S. wine producers

AgExporter, April, 2004

The Bouquet of Success

Roughly two-thirds of wines consumed in China are purchased in hotels and restaurants. Networking with distributors and clients and participating in promotions and trade shows are the best ways to learn the retail and food service sectors.

It is vital for producers to have good relationships with their importers and distributors to ensure that the entire supply process works smoothly. Extensive marketing and educational activities are essential to reach beyond the business traveler and expatriate segments and develop a critical base of Chinese consumers.

Many importers and distributors may not have marketing and education services, so unless new products are competitively priced or introduced through comprehensive educational promotions, they may fail, even in relatively developed coastal markets.

Another influential factor is pricing. In Shanghai, the market price for a 0.75-liter bottle (1 liter=1.0567 quarts) of imported wine hovers around 55 renminbi (about $7.00), compared to 3.5 renminbi for a domestic dry red wine.

Those producers who identify a market niche and establish solid relationships with importers and distributors are most likely to succeed. Education, aggressive marketing and a long-term approach are critical to successfully export bottled wines to China.

Shanghai Bottled Wine Imports: The United States Ranks Second
Among the Top Five Suppliers

Country                 $ Million

                  2000     2001     2002

France           0.608    0.955    1.605
United States    0.298    0.455    1.021
Australia        0.170    0.265    0.716
Italy            0.417    0.195    0.350
Spain            0.055    0.171    0.254

World Total      1.929    2.298    4.579

Country                % Market Share          % Increase

                  2000      2001      2002       2000-02

France            31.50     41.56     35.04       68.05
United States     15.46     19.82     22.30      124.25
Australia          8.81     11.54     15.65      170.19
Italy             21.63      8.50      7.63       79.11
Spain              2.88      7.44      5.54       48.45

World Total      100       100       100          99.31

The story is based on reports prepared by an external contractor in conjunction with the FAS Agricultural Trade Office in Shanghai, China. For more information on this market, contact that office at: Tel.: (011-86-21) 6279-8622; Fax: (011-86-21) 6279-8336; E-mail: atos@public.sta.net.cn

For details, see FAS Reports CH3802 and CH3803. To find them on the Web, start at www.fas.usda.gov, select Attache Reports and follow the prompts.