Interview

"Success in China is about being constantly visible" - just-drinks meets Stuart Barclay, GM of marketing at Wine Australia

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At the start of this year, the trade organisation for the Australian wine industry set out major investment plans for China, as sales to the country surged by 63% by value in 2017. Then, in March, Wine Australia appointed David Lucas to the newly-created role of regional general manager for Greater China, further signalling its dedication to the market.  At this year's ProWein, just-drinks sat down with Wine Australia's GM of marketing, Stuart Barclay, to find out more about why Wine Australia is so excited about China.

Wine Australia is investing heavily in the Chinese market

Wine Australia is investing heavily in the Chinese market

just-drinks: Australian wine exports to China have trebled in the last five years. What have been the key drivers?

Stuart Barclay: This is a market that is growing so quickly. A couple of years ago, there were only 24m imported-wine drinkers in China. Today, there are 48m. In two years time, it could be 96m imported-wine drinkers.

Australia is succeeding in China for many different reasons: We've got a relatively-close proximity to China - we can get into the market quickly, Australia's flavour profiles seem to work, there is a lot of Chinese business being done in Australia so there is a crossover of economic opportunity. You've also got that natural demand.

j-d: Is there something to be said for targeting ex-pat Chinese communities?

SB: There is, but a lot of our crossover is because of Free Trade Agreements. In 2019, tariffs will go down to zero. They're not quite at zero yet. That has massively driven Australian wine in China. There is the crossover with Chinese business investment in Australia - it's seen as a good place to do business.

"Chinese consumers know they can trust the product"

Another big driver is that Australian food is seen as 'safe'. It's clean, green and we have a system of label integrity that is among the strictest in the world. Chinese consumers know they can trust the product - trust is a big factor in China. Not just for wine - for beef, for dairy.

j-d: Can you tell us about the opportunity for white wine in China?

SB: White wine in China is still relatively small, but it is growing. Chardonnay, in particular, seems to be getting interest, but it's still 95% reds. We show white wines when we do our tastings as part of the overall Australian mix, but red is dominant - Shiraz in particular. In China, Cabernet is the biggest varietal in terms of demand and what's planted.

j-d: Vinexpo Hong Kong represents your largest investment in over a decade.

SB: We're taking approximately 150 Australian wineries into Hong Kong. We've invested significantly and the industry has invested alongside us. Australia effectively owns Vinexpo Hong Kong! We've got an 800sq m pavilion.

Then, we'll take 100 of those wineries on a roadshow into China. We're doing a saturation at Vinexpo and then taking it into China.

j-d: How do you go about educating wine companies about how to reach different Chinese consumers in different regions?

SB: It's a challenge - especially in a market as diverse as China. Chinese consumers are still very nascent in terms of their knowledge, wine isn't an everyday product - so, it's creating occasion usage. Our role is to educate the Chinese trade and, ultimately, the consumer to understand how to consume, when to consume, what to match with food. A lot of what we do in China is around education and creating awareness.

j-d: Do you also have to educate yourselves about customs and traditions?

"China is so large and so diverse that you're never going to come up with one easy answer"

SB: Yes. Cuisine in each area is very different. A consumer in Shanghai is very different to a consumer in Chengdu, where they like spicy food styles. China is so large and so diverse that you're never going to come up with one easy answer.

j-d: How are AR & VR campaigns being used in China by Wine Australia?

SB: We're investigating AR & VR from an educational perspective. How can we use them to reach the mass consumer? We're also looking at more e-commerce, social media channels and other channels as they develop in China. They develop so quickly - there's always something new.

Stuart Barclay, GM of marketing at Wine Australia

j-d: How do you make sure you're visible on these platforms when there's so much noise?

SB: A lot of it is about creating partnerships. With Tmall, we have the official Australian wine store. We also partner with local providers. But, it's a challenge - it's a very congested marketplace. You've got to have a really clear proposition. Australia's doing well because it's safe and clean with rich land, rich soils and rich history.

j-d: Are offline activations, such as pop-ups, becoming more important in China?

SB: We haven't done pop-ups as such, but you need to work with key opinion leaders in China, not just on social media, but at a traditional level as well. That's how we have success at getting reach. It's about being constantly visible: We have our China awards every November, where we recognise and reward all our educators and influencers - that creates presence. In China, you need presence. We work with our sister trade bodies - meat & livestock, dairy - to push the Australian message at all times.

j-d: How can you make the most of the checkout-free Alibaba Hema supermarket experience, where consumers can try things while shopping, learn about them and use an app to have them delivered straight to the door?

SB: In terms of opportunities, it's great. You can get the wine in front of consumers - they can potentially taste. You can do things you can't do online. They're nascent consumers. They need to be shown.

The emergence of the Alibaba stores is an interesting way of reaching the consumer.

j-d: How quickly do generations change in China compared to other markets?

"There's a growing, younger female presence, so things like Moscato are coming through"

SB: They seem to change much quicker there than anywhere else. We do know that of the 48m imported-wine consumers, there's a growing, younger female presence, so things like Moscato are coming through. That's why the Chardonnay opportunity exists. It's a lighter, fresher style than the more traditional reds that the older generations historically go for, because that's what they've been told is good.

j-d: What about sparkling wine?

SB: You've got to create the occasion for usage. It's all about awareness and education.

j-d: How much are you investing in China?

SB: As part of a total investment package, we received AUD50m (US$38.8m) from the Australian government to drive export growth into the US and China. Approximately 50% of that is currently allocated to the Chinese market, but the market is moving very quickly. We have to have flexible plans to manage that growth. We could potentially invest more.

There's a time frame of June 2020, when that money needs to be spent by. 

Where should we look for wine's future gains? - Click here for a just-drinks comment


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