Ice wine was similarly stumbled across in Germany in the 1700s when a local winemaker decided to press and ferment grapes which had been caught in a frost, and the result was a concentrated, sweet wine.

Moving on 300 years and Canada is well known for its production of ice wine. However, while Canada sits at the top of the global category, China is fast becoming a key player.

China is the biggest export market for Canadian ice wine, which in 2016 was valued at US$6.5 million, according to Wine Growers Canada. This figure will have risen significantly over the past five years and even through Covid the demand from China hasn’t wavered.

DUTY FREE FRENZY

Inniskillin is one of the biggest names in Canadian ice wine. Randy Dufour, vice president of exports & travel retail at brand owner Arterra Wines, says the Chinese market has been a godsend throughout the pandemic.

“Our Canadian business absolutely flourished during the pandemic but our exports business struggled,” says Dufour. “Prior to Covid 50% of our sales were in the duty free channel and a significant chunk of the other 50% were in high-end restaurants, so it was a tough year.” 

US beverage company Constellation Brands, which previously owned Inniskillin, sold its Canadian business to Arterra Wines’ parent company Ontario Teachers’ Pension Plan in 2016. But the winery’s contract with Constellation’s distribution arm ended March 1, 2020, just as the pandemic was taking hold.

Dufour adds: “Just as they were giving us back full control of our distribution Covid hit. So we lost a lot of our global distribution which we’d spent the previous 17 months rebuilding. But now we have a strategy to be aligned with the best importers in all the major markets, and in China it’s ASC Fine Wine.” 

As Joe Bates reports in his GTR analysis (page 16), China’s Hainan Island is playing a key role in the duty free sector in Asia and for Inniskillin the tropical island has provided a lifeline. 

Dufour adds: “In the last year our sales are up 300% in China just from focus and dedication and we’ve done a great job with duty free there. We’re now the leading wine brand in Hainan Island and they’re keeping our duty free business alive. They’re buying thousands and thousands of cases of ice wine at a price point which starts at USD$80 for a half bottle.”

According to Dufour, Inniskillin first gained interest from Asia through Japanese tourists visiting Niagara Falls who wanted to take back a piece of Canada, which was either maple syrup or ice wine. “We targeted the Japanese and then the Koreans and then it was the Chinese who got interested,” says Dufour. 

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“China has driven the duty free sector for all categories. If you visit a London airport, for example, there are Chinese-speaking staff members and we have a special relationship with China Duty Free Group.” 

Dufour says the winery exports about 65% of its production and the remaining 35% of local consumption isn’t a growing base. This could begin to change now that Inniskillin is Canadian-owned once again, but right now the Chinese are the focus point. 

DOMESTIC BOOM

When ice wine first gained popularity in China in the early noughties there was an issue with counterfeit products. Brands lost out to fake wines, which stifled exports until the market began to mature.

When counterfeit ice wine was at its most prevalent, the Chinese government said the country’s domestic wine producers were expanding by around 30% a year. By 2017 professor Zhan Jicheng of China Agricultural University estimated that the country was producing 3,000 tonnes of ice wines each year and today there are not only several different ice wine regions in China, but regulations too.

According to a report from B2B wine marketplace Vinex, Chinese regulations suggest that ice wine should be made from grapes naturally frozen on vines with no chaptalisation. The alcohol levels should be 9-14% abv and sugar levels above 125g per litre.

However, so far Hengren in Liaoning province, which is China’s biggest ice wine region, producing 1,400 tonnes of ice wine a year, is currently the only region with established geographic recognition and it stipulates a higher sugar level of at least 150g per litre. The Vinex report also says that central government and local producers are now pushing to implement official rules in more locations.

The scale of production growth is also breathtaking. Further north in the Jilin province is Ji’an city, which now produces one-sixth of the world’s total ice wine volume, according to GMA Marketing To China. But that’s not even the biggest region by volume. Liaoning province’s Hengren is the largest producer with 1,400 tonnes of ice wine a year and Heilongjiang, the country’s most northern province which borders with Russia, is home to another of China’s main ice wine regions in Dongning city, where there are reportedly around 333ha of vineyards and five local wineries.

The ice wine industry in China has not only developed rapidly in volume, but production techniques too. In Jilin province, a local variety of Amur grape was developed by the Chinese Academy of Agricultural Sciences in 2008 called Beibinghong. The advantage of this variety is that it can ferment in ice-cold temperatures without having to macerate the skins, and now Chinese producers are ramping up their efforts to grow their brand presence.

Kong Qingsen, who operates a winery in Ji’an, told Asia Times: “From 2016, the city has held an ice wine festival every year, attracting tourists and wine connoisseurs alike. We plan to develop chateau tourism so that more consumers can enjoy the taste of sweet ice wine and the beauty of the Yalu River.”

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EXPORT STABILITY

However, the booming production of ice wine in China is merely supplying a portion of the growing demand from its local consumers, meaning the opportunities for foreign brands are still mega.

The same report by GMA Marketing To China reads: “With around 40% of Chinese wine imported, there is a huge opportunity for expansion for foreign wineries and distributors.

“The market appears to be mature now, which marks the end of more experimental purchases in lower-quality products and a shift in the market’s focus towards high-quality wines that serve a more luxury-oriented consumer mindset.”

Therefore, while China’s local industry is booming in terms of both volume and quality, there’s no denying the huge potential for premium international brands such as Inniskillin, particularly through the travel retail sector, where much of China’s luxury spending takes place.

It took 17 years from Alexander Fleming discovering penicillin to him receiving the Nobel Prize in Physiology or Medicine, so perhaps it will take a similar amount of time for Chinese ice wine to get the recognition it deserves.

However, until that point, the more traditional foreign producers will continue to cash in on their luxury reputation through China’s huge duty free market