A crowd of about 50 wine industry people — winemakers, wine marketers, academics, importers, exporters and media — gathered at Napa Valley College last week for an inaugural wine forum.
This event, hosted jointly by Napa Valley College and a new, Napa-based nonprofit educational organization, the Cal-China Wine Cultural Exchange (CCWCE), primarily focused on understanding the immense and emerging Chinese wine market from an import/export perspective. But it also provided fresh insight into the rapidly growing Chinese wine industry, its scope and wines.
The meeting began with remarks from Dr. Joe Chuang, vice chairman of the CCWCE, who said, “This is the very first meeting forum and we are proud to welcome a delegation from Huailai.”
Chuang introduced a delegation of visiting Chinese dignitaries and vintners led by Zhu Qunde, deputy governor of Huailai County of the Hebei Province, China. Dr. Ron Kraft, president of Napa Valley College, presented the visitors with gifts, bottles of wine made by the NVC winemaking and viticulture program.
The night before the forum, CCWCE hosted a welcome banquet at Bui Bistro in Napa for the visitors from China, which was attended by members of the CCWCE and Napa Valley College officials, including Kraft and Napa County Ag Commissioner Greg Clark.
Zhu, who said he hoped this forum would be the first of many educational exchanges between China and California, spoke about the important nature of the Huailai (pronounced why-lye) region, about 75 miles northwest of Beijing. This area has been growing grapes for more than 1,200 years and has been officially named the “Grape Capital of China” by the Chinese Department of Forestry, Zhu said.
More than a decade ago, French vintners planted an experimental vineyard in Huailai County, drawn to its potential for growing premium grapes. Today it has more than 45,000 planted acres of grapes. The Huailai area, at 40 degrees latitude, is also a part of Greater Beijing’s bid to host the 2022 Winter Olympics. (The only other bid finalist is Almaty, Kazakhstan).
He said there are parallels between Huailai and the Napa Valley and hopes to foster friendship between the regions. To reach Huailai, one crosses the mountains outside Beijing where the Great Wall is located. These mountains help shield the Huailai Valley, which has been designed as an environmentally protected region by the Chinese government.
As one example of environmental innovations, Zhu said wineries in Huailai are using an advance engine emission reduction product, made by the Napa-based company Eco Global Solutions owned by Dr. Joe Chuang, in its agricultural machinery. Wind machines can also be seen throughout Huailai, which has the reservoirs that supply water to Beijing.
Wayne Batwin, president of Napa-based consulting firm PRIME Market Access International, spoke about current opportunities as well as challenges concerning selling wine in China. Batwin, formerly the director of the U.S. Agricultural Trade Office of the U.S. Consulate General in Shanghai, said, “China is a high growth, emerging market.”
Batwin noted that due to increased positive gross domestic product and urbanization, soon there will be 350 million “middle class” Chinese consumers ready to embrace and purchase imported wine. He said that today, Chinese consumers drink more than 162 million cases of wine annually, approximately half of U.S. consumption. “Yet awareness of American wines is only at about 5 percent,” he said. He mentioned that wine bottles’ attributes such as the look of the label on the bottle, the capsule, and tactile feel of the bottle itself are critically important, particularly as gifts. “In many cases these qualities are more important than the taste of the wine,” he said.
Batwin mentioned that more and more Chinese consumers today are discovering e-commerce and purchasing wine directly, some 20 percent in 2014. He outlined some important challenges, which include lack of knowledge about U.S. wines, perceived pairing problems with Chinese cuisine and high import duties for U.S wines — tariff is 48 percent for American wines compared with 0 percent for Chilean wines.
Counterfeit products on the market and overcoming exclusive contracts of major players, such as hotel chains, are other issues, yet Batwin is bullish on China and opportunities offered to American wineries. “This is going to be a very big market,” he said.
The always entertaining Tim Hanni, MW came on next to discuss and debunk wine trends and to help everyone in the room “rethink wine.” For starters, Hanni said, “People needed something safe to drink; China chose tea, in Europe they chose wine.”
He went on to outline many similarities between tea and wine — comparisons like planning and growing methods, harvest, production, and the many varieties of both products. He used this analogy as a way to communicate with millions of potential Chinese consumers without resorting to “winespeak.” Hanni urges a “return to hospitality” in the wine industry that will encourage consumers to enjoy the wines of their choice, whether it is white zinfandel or ultra-premium Bordeaux.
Hanni vehemently eschews wine pairing as a concept in both the East and the West, and encourages consumers to drink the wines of their choice with Chinese foods.
Hanni is the co-author of “The Master’s Secrets to Enjoying Wine” (co-written with Sasha Paulsen, a journalist and wine editor of the Napa Valley Register), which will be published in China, Hong Kong, Macau and Taiwan in spring of 2016.
Dr. Ron Kraft concluded the speech program with a discussion of the Napa Valley College winemaking and viticulture program, which hopes to enroll up to 200 Chinese students. Noting that visitors from China are now the second largest group of international visitors to Napa Valley (after Canadians), he discussed how Napa Valley can further reach out to Chinese consumers through the college’s programs.
Despite the positive vibes and encouraging presentations, there still are serious challenges to seamless wine business exchanges between the American and Chinese wine industries. These include the huge tariffs placed upon imported American wine, finding trusted Chinese distributors who will actually distribute wines properly, and educating the Chinese wine consumers.
On the production side, it may be a little while before we see Chinese wines on American wine shelves as demand for wines in China may well consume the domestic production. Though a few large wine companies, like the Great Wall Wine Co., generally produce average-quality wines for their own market, higher-level wine production is on the rise. Today, there are more than 500 Chinese wineries in operation, and China is No. 5 in worldwide wine grape production.
The industry pledged that its government agencies will enforce quality control. However it remains to be seen whether the Chinese wine industry will respect international wine labeling and trademark standards.
Zhu, asked about problems such as counterfeiting labels, said the government is taking more steps now to protect brands, and Batwin stressed it is important that companies bringing their wines to China register the brands.
The Chinese delegation had brought samples of their wines for a tasting that wrapped up the forum to give California producers an idea of what is being made and sold from the Huailai regions. The selections included sweet white, dry white and a few reds. My favorite was the 2008 Chateau Bengchen cabernet sauvignon, a good wine exhibiting balance, nuance, dark fruit and structure. The overall quality bodes well for the future.
The next Cal-China Wine Cultural Exchange event will take place in Huailai County in the fall during the harvest, Chuang said, adding that the group hopes to bring a sample of California wines to be shared at the event.
More information about the CCWCE is available at www.calchina-npo.org.