Mind the gaps in Chinese wine market, says Rabobank

While the wine market in China continues to grow, Australian wine suppliers still need to be mindful of a number of gaps in the market, says a recent Rabobank report.

Author Marc Soccio, a Rabobank senior analyst, says the growing Chinese wine market is “not all that it might seem at first glance” and its structure is very different to what most foreign wine suppliers are accustomed to.

“In particular, an influx of new wine importers into China has seen even the smallest foreign wine companies gain access, but many brand owners are struggling to gain access to the level of distribution that they’d ideally like,” Soccio said.

“We estimate that the total number of importers has increased by 35% in 2011 to roughly 3000 companies, many of whom are marketing relatively small volumes of wine to a select market of business and political contacts in China.”

In the past five years, Australian exports to the Chinese market have grown by 50% to around 6% of total export volumes.

Soccio says wine is well positioned for the future, with a growing number of affluent young Chinese consumers developing an interest in wine.

“The ongoing economic and social development of China generally bodes well for wine suppliers as Chinese consumers continue to demand a higher quality and wider choice of food and beverage products, aided by the growth of the modern grocery retail channel across China,” Soccio said.

The strength of collective country brands will be important in the future, Soccio says.

“In terms of individual brand shares, those companies who have partnered with a select number of larger, better capitalised distributors appear to be better placed to access the full scope of the market over the next few years.”