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CHINA is estimated to be 1.4bn over 9.6m square kilometres – that’s a huge expanse and an awful lot of people. There are said to be 65 cities with more than 1m people, the largest being Shanghai with an estimated 24m.

With these sort of numbers, generalising is a precarious practice. Nevertheless, that is what we have to do. Just prior to the opening of Prowine China in Shanghai, organiser Messe Düsseldorf arranged a business conference to highlight the huge opportunity China represents for the global wine trade.

While there are opportunities on a scale that is hard to take in, there are also immense challenges. Not least of these are that ’only’ 30m people in China are said to drink alcohol. So, obviously, millions do not drink at all. Of those who do imbibe, it’s estimated that 90% drink once a month with friends. So-called ‘official statistics’ vary enormously. The annual consumption of wine varies between 0.7 litres and 1.3 litres per capita.

On a visit to major Shanghai wine store Ruby Red, which comprises four large stores in the major cities (Shanghai, Beijing, Hangzhou and Shenzhen) and four smaller shops, owner Simon Zhou pointed out another challenge to the conference delegates. The principal tipple of Chinese people who drink alcohol is, of course, baijiu, the most widely consumed spirit in the world, with estimates ranging from 5.5-15bn litres consumed every year. It is made principally from sorghum, but can be a blend of other grains such as wheat, rice, sticky rice, and corn. Zhou estimates baijiu sales as being worth US$72bn, followed by beer at $23bn. Wine is the smallest segment at a paltry $2.9bn.

On the plus side, Professor Dr Simone Loose, from the University of Geisenheim and Institute of Wine and Beverage Business Research, science partner to Messe Düsseldorf’s ProWein, told the business conference that if per-capita wine drinking went up to a modest three litres (France drinks on average 53 litres per head annually, Italy 45), that would amount to an additional 4.2m hectolitres of wine consumed. Significantly more and the global wine industry would not be able to meet that demand

The Prowein Business Report 2018 comprises the views of more than 2,300 people from 46 countries working in the global wine trade. It is claimed to be the “most comprehensive trend barometer of the international wine industry”. It showed that mainland China, followed by Japan, Hong Kong, Scandinavia, the US, Canada and Australia are perceived as the most attractive markets for producers and importers currently. For “strongest expected attractiveness”, that list jumbles to: China, South Korea, Poland, Russia, Hong Kong, Japan and Australia, while the UK, France and Italy have the “lowest expected attractiveness” going forward.

In terms of “risk perception”, the survey showed Russia followed by Brazil, China, UK, South Korea, Italy and the US as the riskiest markets in terms of development to 2021.

Emerging sales markets were identified as: Singapore, Czech Republic, Taiwan and United Arab Emirates, ahead of Vietnam, India, Thailand, Malaysia, Philippines and Indonesia.

New World producers from Australia, US and South Africa ranked India as their number one emerging market, almost certainly because of their British Commonwealth connections and English-speaking populations.

Loose told the conference delegates that the most sought-after wine origins to expand retailer portfolios were: Portugal, South Africa and Argentina.

Speaking at the conference, Castle Li, deputy general manager of COFCO Wines & Spirits Investment, the second largest producer in China after Changyu, the number one importer of wine and owner of the Greatwall Chinese wine brand, pronounces: “The Chinese market is most challenging with no dominant brand.”

He says matching wine with Chinese food is the “biggest opportunity”, but warns that much Chinese food is spicy and salty.

He lists his own Greatwall brand, along with rival Changyu, Château Lafite, Australia’s McGuigan and Chile’s Santa Rita as brands that are doing well in China. He adds: “For the past four years, Penfolds has been very successful.”

He points out that 90% of Chinese people regard wine as a luxury product, but he adds: “The Chinese learn quickly.”

He says 87% of Chinese wine drinking is dry red, followed by white (6%), sparkling (4.6%), champagne (1.6%) and rosé – “very small, very limited” – at 0.5%.

He says the keys to success with getting the Chinese to drink wine, are:

∙ western-style eating and consumption in the major cities, particularly the likes of Shanghai and Hong Kong

∙ being different

∙ a sense of the wine brands

∙ a willingness to learn about and understand tone

∙ culture

In going into his company speech, Li said COFCO’s Greatwall brand comes in five tiers to suit differing tastes and price bands. He said: “Consumption is already upgrading and starting to segment, simultaneously” and the company was working closely with “strategic customers and international hotels”.

His list for success is: a good product, precise positioning and a good distribution/sales channel.

Robert Joseph, the well-known wine writer, commentator and now winemaker (Languedoc – Le Grand Noir), opened the Prowine business summit and acted as moderator. His opening remarks were: “The Chinese are incredibly ahead, way ahead of many other countries.” He warned would-be suppliers that “too few people go into wine shops and people’s homes to see what they are doing and what they are drinking”. Easier said than done in the latter case.

A wine iconoclast, Jospeh went on to question the wine trade’s concentration on – or some might say obsession with – provenance, terroir and authenticity, many of the traditional cues for selling wine. He stressed the importance of labelling and branding in the first instance, then said if the liquid inside the bottle does not stand up to the branding, do not expect a second purchase.

Joseph related the story of Dave Phinney, who created a wine brand called Prisoner with a Goya print on the label. The actual wine and where it came from was incidental to consumers. The Prisoner Wine Company was sold for US$285m.

On tastes, he said traditional flavours was a “name game” revolving around the likes of Rioja, Sauvignon and Semillion. He pointed out that a favourite ice cream flavour in Shanghai was pea – so where does that put winemakers making wine for Chinese palates?

“Moving into the future, like it or not, we need to change. some will never change,’ Joseph predicted.

Neil Tully MW, founder of UK-based Amphora Design, spoke about the importance of packaging and labelling when Giorgio Vinciguerra, chief executive of Beijing Guala Closures, warned of the dangers of counterfeiting. Joseph pointed out in summation that Chinese wine drinkers “struggle with and are resistant to screwcap closures. In fact, Penfolds went back to cork because of the preferences of US and Chinese wine drinkers.

Tommy Tse, representing Treasury Wine Estates, which owns the Penfolds brand, showed the company use of augmented reality with its Living Wine Labels, using the QR codes on the bottles’ labelling.

Messe Düsseldorf director and Prowein global head of wines and spir-its, Marius Berlemann, put the importance of China as a burgeoning wine market in context (see panels). He says when Prowine China started five years ago, it was a struggle not helped by the economic downturn which started in 2008, followed by the Chinese government’s decision to clamp down on ostentatious entertaining and gifting.

November’s show boasted 750 wineries and some 18,900 visitors. Subsequently, Messe Düsseldorf has launched Prowine Asia in Singapore (even years) and Prowine Hong Kong (odd years). Both have 300-400 exhibitors and expect around 7,200 visitors. The company’s next big challenge is seeing off Vinexpo Shanghai, which launches later this year, about a month before Prowine China.