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CHINA is estimated to be 1.4bn over 9.6m square kilometres – that’s a huge expanse and an awful lot of people. There are said to be 65 cities with more than 1m people, the largest being Shanghai with an estimated 24m.
With these sort of numbers, generalising is a precarious practice. Nevertheless, that is what we have to do. Just prior to the opening of Prowine China in Shanghai, organiser Messe Düsseldorf arranged a business conference to highlight the huge opportunity China represents for the global wine trade.
While there are opportunities on a scale that is hard to take in, there are also immense challenges. Not least of these are that ’only’ 30m people in China are said to drink alcohol. So, obviously, millions do not drink at all. Of those who do imbibe, it’s estimated that 90% drink once a month with friends. So-called ‘official statistics’ vary enormously. The annual consumption of wine varies between 0.7 litres and 1.3 litres per capita.
On a visit to major Shanghai wine store Ruby Red, which comprises four large stores in the major cities (Shanghai, Beijing, Hangzhou and Shenzhen) and four smaller shops, owner Simon Zhou pointed out another challenge to the conference delegates. The principal tipple of Chinese people who drink alcohol is, of course, baijiu, the most widely consumed spirit in the world, with estimates ranging from 5.5-15bn litres consumed every year. It is made principally from sorghum, but can be a blend of other grains such as wheat, rice, sticky rice, and corn. Zhou estimates baijiu sales as being worth US$72bn, followed by beer at $23bn. Wine is the smallest segment at a paltry $2.9bn.
On the plus side, Professor Dr Simone Loose, from the University of Geisenheim and Institute of Wine and Beverage Business Research, science partner to Messe Düsseldorf’s ProWein, told the business conference that if per-capita wine drinking went up to a modest three litres (France drinks on average 53 litres per head annually, Italy 45), that would amount to an additional 4.2m hectolitres of wine consumed. Significantly more and the global wine industry would not be able to meet that demand
The Prowein Business Report 2018 comprises the views of more than 2,300 people from 46 countries working in the global wine trade. It is claimed to be the “most comprehensive trend barometer of the international wine industry”. It showed that mainland China, followed by Japan, Hong Kong, Scandinavia, the US, Canada and Australia are perceived as the most attractive markets for producers and importers currently. For “strongest expected attractiveness”, that list jumbles to: China, South Korea, Poland, Russia, Hong Kong, Japan and Australia, while the UK, France and Italy have the “lowest expected attractiveness” going forward.
In terms of “risk perception”, the survey showed Russia followed by Brazil, China, UK, South Korea, Italy and the US as the riskiest markets in terms of development to 2021.
