Boyce has seen the customs statistics and talked to academics and industry insiders and knows, "The reality is up to 30 percent found under domestic labels is imported bulk wine, brought to China from places such as Chile, Spain and Australia." Importing tankers of foreign wines to mix with local blends can be done economically, but even bottled imports have a growing customer base here and are seeing massive annual growth. Some wines from Chile and southern France for example are real bargains and give budget–conscious Chinese consumers ever more alternatives to Chinese brands.
Economic pressures in China today, including high demand for wine, are making producers the prisoners of quantity issues; wine quality remains largely uncharted territory. There is a local grape for example, the Gernischt, whose singular merits could be explored, but it is currently needed to bulk out blended wines with "local content." It is thought other obscure vines were brought to Yunnan by Christian missionaries, and speculated that some of these may no longer be found anywhere but here, or perhaps the other Asian mission outposts of Vietnam or Laos. Their ancestors may have been those destroyed in that historic French wine blight that caused an industry collapse between the late 1850s and the turn of the century. Although Changyu built the first modern winery 113 years ago, the turmoil of China's 20th century, and the "cultural revolution" in particular were not kind to the industry. However, Boyce's reflections on the past are instantly replaced by his optimism about the future."The wine industry in China really started to develop in line with the opening-up and reform policy in the early 1980s," he explains, "and while Shandong is the biggest wine producing area, there is more potential for good wine grapes in a place such as Ningxia, in the northwest, where there is less rainfall and more sunshine. Some of the better wines are coming from here and neighboring Shanxi, Shaanxi, Gansu and Xinjiang."
Grace Vineyard, a family-owned, premium boutique winery in Shanxi Province, is one operation taking on the challenge to focus on grape quality. Managing director Judy Leissner is a native Chinese who used to work for Goldman Sachs and the vineyard was established by her father in 1997 and left in her care. The family had the leeway to learn the land and has the patience to let the product develop. Satisfying consumer demand is a short-term business objective, but shaping consumer taste is an art. Grace is taking its time.
Grace is actually increasing production now but focused first on earning awards and accolades for their Old World commitment to quality. Grace can't afford to preempt shelf space in the country's grocery stores, so it relies largely on getting into hotels, restaurant wine lists, and gourmet shops. The hotel and restaurant market is tough to crack, and some big distributors focus specifically on that. One of little Grace Vineyard's triumphs is that a fixation on quality has paid off; with its big distributor Torres, it has cracked the 5-star hotel market with its entry-level reds, from modestly priced Cabarnet Sauvignon and Merlot to more expensive brands such as Tasya's Reserve and Chairman's Reserve (RMB 60 to RMB 488 or US $9 to $77).
Shanxi is far enough inland to avoid the excess moisture that plagues China's best established "wine country" Shandong, where unnatural remedies for mildew compromise growing conditions and crop purity. It's not entirely about climate however. The rule is that good wine requires good grapes and thus quality can mean sacrificing some fruit early – literally culling 60 percent or more of the grapes early in the season to redirect nutrients to the remainder.
But a shortage of grapes means many bigger players in the industry rely on contracting small, farmer-owned vineyards. Only big harvests provide big returns and farmers are interested in profits, not in fashioning a legacy product. Deliberate reduction of yields simply isn't practiced, and grapes in some places are routinely harvested too early. Excess watering just before harvests increases weight and returns, and this profit-boosting habit also reduces taste concentration. The vines themselves figure in: Boyce observes, "Many of the country's vineyards are relatively new, and to produce a quality grape young vines need time to mature."
In New China it is easy to be blinded by the scale of demand, production and profits, but the rare qualities of proud little Grace Vineyard may shine long after others have faded. The choices the company faced, both in terms of its goals and how to achieve them, were the subject of a Harvard Business Review case study. The choices were tough but their wines have developed a strong following and won international awards. Two other wines to watch, according to Boyce, come from Ningxia Hui Autonomous Region in northwest China: Silver Heights Helan Mountain blends (RMB 88 and RMB 288 or US $13 and $45).
But Boyce stresses his personal favorites are not what really matter. With the help of friends, he runs the annual Grape Wall Challenge, inviting non-expert wine enthusiasts selected by age and region to sample wines contributed by distributors. The event always features reds and whites priced under RMB 100 (US $15). The tasting is completely blind. People decide what they like and only then does Boyce reveal their choices to them. "The point is to lower the intimidation factor in wine selecting," he stresses, "It is entirely possible to find good wines that are also reasonably priced."
The choices, if you don't know what you are looking for, are more than intimidating for the Chinese consumer. Some Chinese wineries, particularly in southern China, pick a recognized overseas brand, change a letter or two, approximate the graphic values of the label and set off in search of shelf space. These knock-off artists are either trying to get consumer attention or actually fool them into thinking they are getting the real thing. Either way, it's illegal, but it's also tough to bring the imitators to justice, as they are usually uncharted factories who only supply non-mainstream retailers. Nevertheless, many cases of identity appropriation are prosecuted each year.
Riffing off the big boys in the business is not what Lafite (yes, the real Lafite) were thinking about when they elected to open a vineyard in Shandong rather than another more hospitable region of China. The mildew produced by its wet, rainy climate requires the application of fungicides – expensive, and not a great image. True, other places have their drawbacks. Yunnan is mountainous and there is little room to grow. In Gansu, Ningxia and Xinjiang regions cold winters mean vines must be buried under 30 cm or more of soil every fall – a labor-intensive measure. It is important to other vintners however that Shandong has always had access to plenty more tourists than the western regions. Tourists buy wine and so winery tours are a big part of some business models. Boyce is circumspect about Shandong's current centrality, "The place has been done. Technically, the wineries live there because they always have. It's close to major consumer markets and there is a good supply of people with wine know-how. But for my money, the best potential right now for making large quantities of decent wine is in the northwest." He admits an alternative is growing vines in the dry west and shipping the wine east to a "showcase" vineyard.
The big importers meanwhile are competing at their own level. ASC, Torres and AUSSINO now have hundreds of diverse wines in their portfolios, so even the local 7-Eleven convenience stores are able to offer decent table wines at prices that make them a reasonable option to comparable products from big Chinese wineries. COFCO, owned by Great Wall, hasn't stopped at leveraging volume and territory coverage; they have started to go for control of the whole supply chain, buying up wineries in Bordeaux and Chile. As more and more inexpensive foreign wines are moving into China, more Chinese lovers of the grape will find the price points so close it will be worth trying the imports.
Meanwhile Grace Vineyards is not measuring its success by profit margins. The vintner and the blogger share a goal: each pursues in their own way the development of the Chinese palate.
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