A new Chinese relationship with wine

China’s wine trade has relied heavily on sales tied to socializing: from business, government and holiday gatherings to friends enjoying dinner everywhere from five-star hotels to local haunts. The recent measures used to combat Covid-19, including self-quarantines, closed restaurants and cancelled tastings and trade fairs, slowed sales to a trickle and forced importers and distributors into survival mode.

But just as the SARS crisis in 2003 is tied to the rise of the Chinese e-commerce sector, Covid-19 seems to have shifted how people buy and drink wine.

Wine at home

One chronic lament in the wine industry in China is that so few consumers drink at home. Now home is where many have been stuck and, with a flood of delivery deals available from distributors in desperate need of revenue, more people are trying wine.

Wang Shenghan, or ‘Lady Penguin’ – a Key Opinion Leader (KOL) with two million-plus fans on the social media platform Douyin – says her entry-level Chilean label, which costs RMB168 ($24) for a six pack, is “selling like crazy”. Launched three years ago, the cumulative sales surpassed one million bottles this March. “I regard our Chilean wine as the everyday quality box lunch for our consumers,” says Wang, and adds that more people will be used to buying wine post-crisis. She is far from alone in seeing such home sales growth.

“I noticed Chinese customers purchasing that didn’t normally buy before,” says Vicente Muedra of Le Sommelier International, which imports wines into China, specializing in wines from Spain and the South of France.. He says all purchases now are for personal consumption, rather than entertaining and gifting, and he has been moving themed packages at RMB100 ($14) per bottle.

Yiftach Bar, a managing partner of the importing and distribution company All In Wine, has a mostly Chinese clientele, and has also seen good sales of his “quarantine packs”, which can cost up to RMB3000 ($430) for a trio of bottles of Chateauneuf-du-Pape.

At least part of the drink-at-home movement goes beyond simply buying bottles. It makes wine part of a lifestyle experience, whether by investing in upscale equipment, exploring regions and grape varieties, or trying it with different foods.

“We are selling more Coravin and Zalto during this period,” says Isabella Ko of the Beijing wine bar and restaurant, The Merchants. With her venue closed, she turned to delivering dinners, desserts and wines, and has been surprised by the results. “‘We didn’t imagine Chinese wines and organic wines would sell this well,” she says. “People want to try something new.”

“Something new” is a quarantine theme. Home chefs have emerged by the millions. Online delivery site Meituan says baking goods queries went up 10,000% while people were in lockdown during Chinese New Year. People bought DIY pizza kits that included a training video, and a popular theme on WeChat was people bragging to their friends about making ice cream, cake, or hotpot. Wine has a role to play, including with that hotpot: Ko says her restaurant doesn’t serve the dish, but she still made a list of home delivery wines that would match this spicy favourite, and consumers have responded well to it.

Home delivery

One of the biggest success stories has been Hulu, the only one of four restaurants in the Beijing-based TRB Group that stayed open. In mid-February, owner Ignace Lecleir said revenue was down 95%. He set up two food and drink delivery programs, then moved specifically to wine packages that started at RMB150 ($21) for two bottles. Customers could pair them with Hulu’s dishes or their own, or even use them for online cloud drinking sessions where friends connect via video messaging apps.

The big question is whether this movement will continue once the Covid-19 crisis ends. Social drinking is bound to remain crucial for wine sales, but home consumption will retain some momentum – customers will still have their fancy new glasses, and will most likely remember the fun of trying wine with their homemade dishes and meal delivery options.

In late March, Lecleir of Hulu said his deliveries accounted for 70% of his business, with wine playing a key part. These new delivery programs will be an important part of his post-crisis business model, he says, one that has repercussions for the many importers to whom he’s given a lifeline these past two months by getting their wines into consumer homes.