It's no secret that Chinese wine consumption has fallen dramatically over the past decade. In 2022, the Chinese wine industry hit new lows, both at home and abroad. According to data from Chinese customs, the total value of imported wines in 2022 was RMB 9.6bn (US$1.4bn), with a year-on-year decrease of 12.5% — the fourth consecutive dip since 2019.
Dramatic reversals
The OIV's State of the World: Vine and Wine sector 2022 report states that wine consumption in China has fallen dramatically, due to “the overall reduction in domestic demand”, down 16% to 8.8m hl, in just one year. Imports also declined, by 21% in volume terms, to 3.4 million hl, with value down 4%.
Based on figures published by the OIV in April 2023, China has the world’s third-largest vineyard area, 785,000ha. Yet, according to the same report, Chinese wine production “has been falling for around ten years”.
China lifted its Zero Covid policy in January 2023, making international travel possible once more and prompting plans for trade shows beyond the country's border. November 2023 sees the post-Covid return of ProWine Shanghai.
It's no secret that Chinese wine consumption has fallen dramatically over the past decade. In 2022, the Chinese wine industry hit new lows, both at home and abroad. According to data from Chinese customs, the total value of imported wines in 2022 was RMB 9.6bn (US$1.4bn), with a year-on-year decrease of 12.5% — the fourth consecutive dip since 2019.
Making international inroads
UK-based Chinese wine expert and writer Janet Z. Wang, author of The Chinese Wine Renaissance, says that Chinese wine producers have been re-evaluating the international wine scene and their overseas market prospects, citing the presence of Chinese wines at European trade shows ProWein and the London Wine Fair in March and May 2023 respectively.
This year, China returned to Düsseldorf after a three-year hiatus caused by the pandemic. A group of 13 wineries exhibited under the banner of Upward China Wine (UCW), taking part in four masterclasses and presenting more than 100 wines spanning seven Chinese wine regions.
The ProWein delegation was headed by China’s pre-eminent wine educator and winemaking consultant Professor Demei Li of Beijing Agriculture College, who presented a masterclass where 15 wines from seven regions were poured, including LVMH’s icon wine Ao Yun 2017.
Li explained that government support plays a key role in China's wine industry; Ningxia, China’s biggest wine region, has the help of the Ningxia Wine Bureau, the only Chinese province to have such an organisation. Founded in 2012, the Ningxia Wine Bureau shall accelerate the development of the local wine industry.
Ningxia Wine Bureau spokesperson Wenliang Li confirmed that a programme of activities was being rolled out to support the province's producers, including entries in international wine competitions like Decanter, IWSC and the Concours Mondial de Bruxelles; attending international wine fairs such as ProWein 2024; and the hosting of trips for international media and trade members.
Gaining a foothold in the UK
Chinese wine was also present at the London Wine Fair 2023, where Janet Z. Wang and Sarah Abbott MW led a masterclass that presented six Chinese wines across a range of regions, wine styles and grape varieties.
According to Abbott MW, Chinese wines are moving slowly away from the extracted, powerful, oak-dominated Bordeaux-blend style, and there is a trend towards a more terroir-driven style that reveals varietal expression. “The Chinese wine industry is continuing to make impressive progress. Some of these wines are showing great finesse and character,” she said.
According to Beijing-based wine writer Jim Boyce, there has also been talk of geographical indications: China is interested in protecting and promoting Ningxia's Helan Mountain area as a geographical indicator, which would boost the region’s status internationally and make it easier to promote wines both domestically and overseas.
Privately-owned Helan Mountain-based Fei Tswei was a first-time standalone exhibitor at the event. Their first vintage was 2017 and of the 500,000 bottles made per annum, they plan to sell roughly a third in the UK.
Co-owner Lily Zhang also showed at the London and Manchester Specialist Importers' Trade Tastings in 2023, and she plans to return to LIWF and ProWein in 2024 to consolidate her brand's European presence.
Interviewed at her winery, Lily Zhang is focused: “We are the first generation of winegrowers. Wine is not part of our heritage or history, but we have everything we need here: the right soil, climate, temperature variations. We can hire a winemaker and buy the equipment, yeast and barrels that we need.”
According to Wang, “The UK is still considered a barometer for the international market. A handful of Chinese wineries are serious about exporting, and they are now treating the international market as a real challenge and proposition. In 2024 and beyond, we should see Fei Tswei, and possibly a few others, establish themselves as serious exporters.”
Since 2019 Wang has been working to create education and tasting opportunities for Chinese wine in the UK via events, and to place it in high-end Chinese restaurants in London such as Pan Pacific London, Kai Mayfair and Park Chinois.
“Chinese wines are starting to make a breakthrough in the collective consciousness of mainstream wine drinkers,” she said, citing the forthcoming launch of the Wynn Signature Chinese Wine Awards as a significant milestone for Chinese wine and its visibility on the world stage.
The inaugural edition will be held in Macau in March 2024 with a judging panel that includes Wang, Decanter's Jane Anson and other international industry communicators and experts who not only will judge but also promote Chinese wines to both domestic and global audiences.
The tricky topic of blending bulk
At present Chinese wines have no guarantee of provenance, but individual premium-level producers like Xige Estate, the first Chinese winery to achieve the BRCGS International Quality Certification, take pride in their quality credentials.
“The winery strictly follows the world’s highest possible standards in every aspect from production to winemaking,” said Christelle Chene, Xige's International Affairs Director. She added that the winery uses “top class winemaking techniques, equipment, the application of big data and new technologies to make fine wine on a large scale.”
Marco Milani, CEO of China's first Demeter-certified winery Silver Heights, acknowledges the tricky topic of companies who use imported bulk: “It's unfortunate that some wineries, primarily those producing low-end wines, blend bulk wines with Chinese wine,” he said. “However, at Silver Heights, we take pride in using 100% estate-grown grapes. Our reputation is paramount, and regular audits by Demeter ensure our adherence to quality standards.”
China and the OIV
Boyce has reported that China is expected to join the OIV soon. The wine regions of Ningxia and Yantai already have OIV observer status, and the country increased its international presence in the grape and wine industry in June 2023 by hosting the International Conference on Grape and Wine Industries (ICGWI) in Ningxia, under the OIV’s patronage.
“China looks forward to joining the OIV as a full member as early as possible, and along with other members, advancing high-quality development in the vine and wine sector,” said Sui Pengfei, Director General of the Department of International Cooperation of the Ministry of Agricultural and Rural Affairs, in a recorded message to OIV delegates,
Meanwhile, Marselan has been named as a potential flagship for the Chinese wine industry. A masterclass featuring this French cross was organised as part of the Marselan Selection, the world's first wine competition to focus on this grape, held in Ningxia in October 2023. The event showcased Chinese wines made exclusively or predominantly from this variety which shows particular promise in China according to Professor Li.
A pioneer in vinifying Marselan in the country and introducing it to dry red wine producing regions, he has championed the grape since 2016, running masterclasses in Germany and Shanghai to raise Marselan's profile. Li said that it adapts to natural conditions in China, while displaying different characters from one region to another; he is convinced that this lesser-known French grape has the potential to be Chinese wine's international calling card.
Beijing-based Cassidy Dart MW, a judge and masterclass presenter at the Marselan Selection, said: “Marselan has the opportunity to be a USP for China, and can be a point of difference from a global perspective — although this very much depends on to what extent export is part of the regional strategy. Marselan has potential both as a single varietal and as part of a blend, and quality-wise there is an upward trend, which is positive.”
Playing the long game
While the OIV figures show a drop in both production and consumption, Chinese wine experts take the long view. “The most serious players in China look at the wine industry as a very long game,” said Wang. “They would readily acknowledge that they are at the beginning of a long journey, and that compared to baijiu consumption and margins, grape wine is a very poor cousin.”
Although the number of wine producing companies in China dropped from 244 (2017) to 119 (2022), Wang points out that many of China's producers have other industry experience and wealth to draw on: “It's true that some went in with over-optimistic projections and have been flushed out due to poor planning or lack of true commitment, but others have the resources and long-term vision to stay the course.”
Yet there is no denying that the value of wine exports from China has plummeted from a peak of $542.4m in 2016 to $41.03m in 2022.
Milani is resolutely upbeat: “Silver Heights' target is to sell 25% of our production on export markets.” He noted that while regions like Australia, Chile, and France have long-standing winemaking traditions and strong domestic markets, Chinese wines have something different. “With their unique terroir and the fusion of ancient and modern winemaking techniques, Chinese wines offer a fresh narrative,” he added.
“We always sell the country with the wines,” said renowned Austrian consultant winemaker Lenz Moser, who confirms that long-term brand building is key for Château Changyu Moser XV, his joint venture with Changyu Pioneer Wine.
Changyu Moser's ambition is to establish their wines amongst the world’s finest, and their icon offering Purple Air Comes From the East, which retails at around €180, has had rave reviews from Jancis Robinson MW, amongst others.
“We still have a long way to go to consolidate our standing and create a quality image for Chinese wines in general, and for ours in particular,” said Moser, adding that Changyu will return to ProWein in 2024, after a four-year absence.
Signs of green shoots
Dart said there were a number of reasons to be optimistic about the future, citing the return to China of foreign producers with long-term vision and the capacity to hire help to penetrate what is a complex, multi-layered market, as well as numerous openings of restaurants featuring wine, specifically in China's Tier 1 cities.
Not only that, but white wine appears to be gaining broader acceptance, albeit dependent on specific cities and consumer segments. Finally, said Dart, “with the growth of the luxury market in recent years, I am hopeful that if wine can position itself and brand itself correctly, it has a chance.”
Louise Hurren travelled to Ningxia as a judge with the Marselan Selection competition.
