There Are Plenty Of Reasons Why Champagne's Falling Flat In China

252 Million Cases Of Wine Expected To Be Consumed In Greater China By 2016 Following a 142 percent boom in imports and consumption between 2007-2011, China's wine demand is expected to slow down but continue to plow ahead in the next several years, according to a new report by Vinexpo. Increasing from 159 million cases in 2011, wine consumption in mainland China and Hong Kong expected to reach 252 million cases in the next three years as average growth hits 40 percent between 2012-2016. By that point, China will likely become the world's sixth-largest wine producer as well, surpassing both Chile and Australia. However, the rising tide of wine consumption is not lifting all boats. Currently, non-sparkling varieties account for an estimated 99.5 percent of the China market, while consumers remain indifferent to wine's bubbly brethren. As the WSJ notes this week, sparkling wines accounted for about seven percent of all wine consumed worldwide in 2011 and the segment is expected to rise an additional nine percent by 2016 -- compared to just five percent for non-sparkling wines over the next three years. Yet industry observers point to a lack of effective marketing in China, where it accounts for less than one percent of wine sales, as failing to make an impact with Chinese consumers and keep pace with the growth of the broader China luxury market. However, chalking it up to simply bad marketing is a bit of a cop-out, considering major Champagne and sparkling wine makers have been far from invisible in China, and are essentially building a sparkling wine-drinking culture there from scratch. Back in 2011, Moët & Chandon launched a host of events in China, leading up to a Great Wall fly-by of the cork-shaped “Spirit of 1743″ hot air balloon and a visit to Shanghai by the actress (and M&C brand ambassador) Scarlett Johansson. This summer, Moët is slated to launch the Chandon Ningxia winery, which the winemaker developed in China with joint venture partner SOE Nongken. The winery will producing high-end method Champenoise sparkling white wine exclusively for the China market, from locally grown Pinot Noir, Chardonnay and Chenin Blanc grapes. As Jing Daily previously noted, Champagne makers have had to pull out all the stops to educate and appeal to China’s notoriously red wine-obsessed wine drinkers. Unlike other LVMH-owned wine and spirits labels like Hennessy cognac and Glenmorangie scotch, which aim almost exclusively at middle-aged, male drinkers, Moët & Chandon in particular has typically aimed at a younger and hipper urban crowd, holding promotional events at Beijing’s Park Hyatt and Shanghai’s URBN Hotel and a “Looking for Mr. & Ms. Moët” campaign on Sina Weibo in 2011. Yet outside of events and the occasional party, Champagne is still a tough sell in China as it occupies a unique position -- it's priced correctly for high-end gift-giving, and it's French, yet it doesn't yet have the face-giving cachet of top-tier Bordeaux or Burgundy, and unlike cognac or whiskey bottles cannot be closed and displayed once opened. Most likely, China's indifference to sparkling wines to date is due less to poor marketing and more to the fact that the majority of wine is consumed for business rather than pleasure. (And, the vast majority of that time, the wine in question is red.) It's a cool drink for those who want to see and be seen, and it clearly has a market (albeit very niche) in China, but it's out of place at business gatherings and is rarely consumed at home. While this is slowly changing, driven by younger and female drinkers in particular -- who are more open to whites, rosés and sparkling wines -- producers of Champagne, Cava and Prosecco are setting themselves up for disappointment if they expect quick, easy money in the China market.

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There Are Plenty Of Reasons Why Champagne's Falling Flat In China