Caviar And Cognac? More Companies Localizing To Woo Affluent Chinese

Black Pearl Caviar Has Sold Nearly 60 Kg Of China-Farmed Sturgeon Roe Since January For foreign companies ranging from automakers to fashion houses to wine and spirits brands, localization in the Chinese market has become an accepted part of doing business there. Gone are the days where excess inventory could be foisted on luxury-starved Chinese consumers, as virtually every luxury brand worth its salt has entered the increasingly lucrative (although challenge-fraught) China luxury market in the last 10 years, increasing choice for consumers and competition among rivals. To set themselves apart from the pack and tailor their product to the particular tastes of China's elite, companies in the food & beverage sector have been among the most nimble and willing to experiment, with some -- like Chivas Regal -- rapidly becoming ubiquitous on nightclub tables throughout the country. Chivas, when mixed with bottled, sweetened green tea and ice, has at this point progressed from a drink favored by a small sliver of fast movers in Beijing and Shanghai to one seen even in the most remote bars. But despite the loss of any exclusivity this product had when it first appeared on the scene in China, or any apprehension that scotch purists at Pernod Ricard (owner of Chivas Regal) had about the brand's (literal) dilution in China, the company has at this point fully embraced localization and seen Chivas-and-green-tea as a godsend. As Pernod's chairman Patrick Ricard told the Wall Street Journal earlier this year, "If that's the way [the Chinese] prefer to drink it, we’re very happy with that. Drinking our product with tea is a way of cultural harmony.” So will other food and beverage companies in the luxury segment embrace localization as a "way of cultural harmony"? Or will purists prevail? While Chivas Regal has to accept the fact that its product won't be widely appreciated as "a scotch drinker's scotch" in China, other scotch brands new to the market -- such as BenRiach and Glendronach -- are marketing to the country's burgeoning connoisseurs by hyping up the long history and Scottish heritage of their products. However, some companies are looking to walk the fine line between brand purity and all-out localization by keeping their product the same but changing its context. A good example of this can be seen in the world of high-end cuisine -- "edible luxury." This January, Jing Daily looked at the way Chinese producers have increasingly sought to enter the global market for "haute cuisine," producing truffles, foie gras and caviar in growing quantities both for China's increasingly curious elite and consumers abroad. This week, CNNGo profiles one China-based company, Black Pearl Caviar, that is taking the same approach but targeting wealthy Shanghainese by pairing China-farmed sturgeon roe not with champagne (as do the French) nor vodka (like Russians) but instead cognac -- the preferred tipple of the country's upper class. From the article: [W]hen Hinchliffe and Collins launched Black Pearl they took inspiration from Chivas Regal's marketing playbook in China; the Scotch whisky really took off in China when promoters paired it with a local failsafe: green tea. Black Pearl is looking to localize caviar in a similar way. “The Chinese love cognac,” says Hinchliffe. “One of the biggest sellers in [karaoke clubs] is cognac. We wanted to create a Chinese way of consuming caviar, so we’re pairing it with something they’re used to.” The team won over high-end Shanghai clubs like Bar Rouge and M1NT that cater to the Chinese elite, with tastings featuring shots of Remy Martin. Hotels like the new Waldorf Astoria also came on board -- though most guests there prefer it on white toast with bubbly. ... Dane Clouston, executive chef at Jing’an Restaurant, says guests are “desperate” to try it when they notice it on the menu, after hearing about it for years without any access. “I decided to put it on the menu mainly because I like to eat caviar personally,” says Clouston, “and think everyone should have that luxury of being able to eat caviar whenever they like.” Jing’an sells about 100 tins of caviar a month, at RMB 360 (US$53) for 10g. While Black Pearl contends its exclusive clientele is small but steadily growing, caviar will undoubtedly remain very much a niche delicacy there as it has in western countries. But the caviar-and-cognac pairing mentioned in the article does bring up interesting ideas for other food and beverage manufacturers. The old favorite wine and cheese springs to mind, as wine is being consumed in ever-increasing quantities in China yet gourmet cheese has yet to really catch on. Tweet

Caviar And Cognac? More Companies Localizing To Woo Affluent Chinese

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Published September 22, 2010

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Caviar And Cognac? More Companies Localizing To Woo Affluent Chinese