How to sell wine to China- Chris Zappone, The Sydney Morning Herald
Profiting from Chinese demand for Australian wine doesn’t involve rocket science, said wine ne’gociant Bede Doherty, but a knowledge of the Asian culture helps.
Mr Doherty sources wine from Australian vineyards and sells it through brands specially created for clients in the burgeoning Chinese market. The key objective of his Melbourne-based company Bede Doherty & Associates is to create viable brands for Chinese buyers by supplying a product-range that is custom-designed to attract positive attention and increasing sales in China specifically.”
Wine negociant Bede Doherty sells wine into the burgeoning Chinese market.
No small feat considering the gulf of difference between the Australian wine culture and the Chinese market. As a ne’gociant – or dealer, brander and vendor of wine produced by smaller vineyards – Mr Doherty’s business is on track to hit $1 million in revenues this year.
Nonetheless, catering to Chinese clients brings unique challenges.
Branding, for which Mr Doherty works with a native-speaking Chinese consultant, is a critical, with factors that rarely matter elsewhere.
A perfectly appetizing name in the western world may in China recall unpleasant images or connotations. Ditto with numbers in a culture that places great significance on the luck or lack of it – associated with numbers.
For example, the English word bin used in a well-known Australian wine brand is like the word meaning sick in Mandarin. Western brands incorporating the number four may suggest the idea of death, because the word and the number sound remarkably similar.
Australian wine makers oblivious to these differences may find their wines don’t go very far in China. Although a name like Bester, which will be used for a forthcoming brand, does not mean anything in English, it sits nicely in a market filled with brands such as Dragon Seal, Great Wall, and Xanadu Estate.
The meaning of the sub-brands on the label, the part that would give a region or grape type, can be blunt. One brand created and exported for China has a sub-brand name in English that is like the Chinese symbols for, “Let’s get sit down and get drunk together.”
“The Chinese have a particular interest in owning the brand,” Mr Doherty said, “because when they import established brands from overseas, those wine suppliers often expect sales to increase by a certain rate, especially into a country famous for its phenomenal growth”. “For Australian and western companies producing household name brands in wine, there are expectations for the volume to be sold”.
“It has been known for importers overseas to have brands taken away from them by the owners of the brands in the source country because they weren’t able to keep up with sales expectations, he said.
In addition to the branding, Mr Doherty handles the production and legal issues related to wine importing which in turn allows Chinese customers to focus on the distributing their product.
Often Chinese importers wanting to start importing from Australian vineyards come up against supply limitations.
“The problem wineries have is that they run out of wine,” Mr Doherty said. An interrupted supply forces importer in China to either find a suitable replacement, or to import a slightly different type of wine.
The disruptions in the importation process bring an added expense and difficulty.
Importers may have to register another type of wine to bring into the country. In some cases, it’s enough to make the importer start the process again from scratch.
With Mr Doherty’s services, the Chinese client typically takes control of the brand in China, while Mr Bede retains ownership of it in Australia.
Giving the example of the fictitious “Xylophone” brand Mr Doherty said the Chinese buyer would have to buy it from him because he owns the brand in Australia, which protects his local competitors vying to fulfil his orders.
Once the type of wine is settled upon with the client, Mr Doherty assures a steady consistent supply.
“It’s a manufacturing process, he said. “One can adjust the alcohol and sugar and ph (level)”. Part of his job, conducted from his home in Melbourne, is to sample wines, checking for taste, acid, and other aspects of its chemistry, which can be adjusted if needed.
“I do the quality control for the customers,” he said, adding that it’s surprising how many people in the wine dealing business forget to keep samples of past vintages for future reference.
“I keep samples of the previous wine so I know what it tasted like,” he said. “I can cross compare the new batch with the old batch.”
“It’s simple stuff. There’s no rocket science in this at all.”
The Chinese are primarily interested in red wine, using requesting it at $US20 a case, although Mr Doherty only sells at the US$30 a case level and above. The prices work out to about $US2-$US3 a bottle.
As an American living in Beijing explained, “There are a lot of western wines in China but of course, the market is still very undeveloped and immature.”
Local wines may cost 20-40 renminbi ($3-7) on a menu, whereas a cheap bottle of foreign wine would be around 80 renminbi ($14).
Nonetheless, demand for western wine is growing.
Last year, the China imported 25.1 million litres of Australian wine, a jump of 84.3 per cent from a year earlier, according to data from the Australian Wine and Brandy Corporation.
Based on growth of that scale, the thirst for Mr Doherty’s services should remain for some time.