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Nov 11, 2011

SA wines have a place in Pan-Asian market

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South African wine producers should thoroughly research their individual potential markets in Asia and should avoid thinking of the region, which is home to 57 countries, as a homogenous entity, Master of Wine and inter- national wine judge and consultant to producers trading in Asian markets Debra Meiburg said.

Earlier this year,

during a seminar hosted by nonprofit industry organisation Wines of South Africa, in Stellenbosch, in the Western Cape, the US-born wine specialist discussed ways of approaching markets across the Pan-Asian region.

She stated that Hong Kong, China, was like the Wall Street of Asia and the home of fine wine, deep pockets and big cellars; however, this market remained bipolar, with people either routinely drinking Bordeaux first growths and other fine wines at outrageous prices or buying low-end products.

Now was a great time for South African producers to enter this market, as there is enormous growth potential for midpriced wines, she said.

Nevertheless, low barriers to entry meant that the Hong Kong market was fragmented and populated by high numbers of agents and distributors.

“It is important to work with importers who are good at trading and brand building,” she said.

Further, Meiburg emphasised the importance of Hong Kong as a springboard to accessing the Mainland China market.

She stated that in China alone, there are nearly 1.4-billion people in 34 provinces, which each have their own diverse demographics.

“Throughout the country, over 100 dialects are spoken. There is no national cuisine, as is sometimes perceived by Westerners, and wine producers need to consider localised palate preferences in what they bring to market,” said Meiburg.

She added that only 10% of China’s middle class drank wine but that the wine market was growing at a compound annual growth rate of 15%.

The Chinese middle class may be very prestige conscious but they are also price conscious. “They are immensely brand loyal and although French wines enjoy the strongest support, there is a rising curiosity about other wine-producing countries, on which South Africa can capitalise,” she said.

South Africa can establish a good reputation if it enters the Chinese market with its high-profile wines instead of low-end wines.

Meanwhile, she pointed out, education in China was greatly valued and people are highly receptive to learning about wine and the narratives associated with individual producers.

“The Chinese find Western lifestyle and luxury intriguing, and they also understand the typicity of origin, giving wine- makers ample scope for communication,” she noted.

In addition, nearly all wine consumed in China is red, but there is a growing interest in sparkling wines and this could be an opportunity to find ways of encouraging consumers to extend their repertoires by drinking white wines.

“Currently, white wines are perceived as insipid, but there could well be a way to change that and perhaps the conduit could be seafood,” she added.

There are very few national distributors in Mainland China and producers should target specific markets within the country and find appropriate distributors. Second-tier cities where populations are frequently significantly larger than in many mainstream Western cities offer good potential, she said.

Producers could carve a niche for themselves by running cuisine-specific promotions. “Pick a dish and promote an appropriate wine as a way of engaging new consumers,” said Meiburg.

She highlighted gift-giving, festivals such as the lunar New Year, midautumn and other national celebrations, as well as large-scale receptions for weddings and corporate events as providing marketing opportunities.

However, she suggested that local winemakers should also look at developing brand names that were easier to pronounce than many of those currently available on international makets.

Further, Meiburg said Japan was close to a mature market and one of the few in Asia where more women than men bought wine. With the Japanese tradition of celebrating events, South African producers could look at potentially using a national South African holiday as the platform for promotional activity.

She also identified South Korea as a wealthy, sophisticated, well-educated and fast-growing market. “Koreans are fond of German wines and Chilean winemakers are building a strong support base, owing to a favourable bilateral trade agreement with the country,” Meiburg stated.

Edited by: Chanel de Bruyn
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