Sonoma County Vintners was featured in the May 29 issue of the Press Democrat in a great story on our marketing efforts in China by reporter Derek Moore.
Sonoma County vintners aim to spark interest in Asia
By Derek Moore
Dan Kosta believes pinot noir sourced from Sonoma County grapes rivals the best red wines in the world.
His Chinese hosts may take some convincing.
Kosta is with other Sonoma County vintners on an unprecedented promotional tour in China aimed at sparking interest in the region’s wine offerings. The two-week trip, which wraps up today, represents the most ambitious effort yet to raise the profile of Sonoma County wines in Asia, which offers huge opportunities for growth amid regulatory, financial and cultural hurdles.
At the Waldorf-Astoria in Beijing, the Hyatt on the Bund in Shanghai and other stops along the way, the contingent representing more than 20 Sonoma County wineries has been popping the cork on a place many Chinese wine consumers have never heard of.
Kosta, co-founder of Kosta-Browne Winery in Sebastopol, said he hopes the trip will “grow and nurture a global awareness of our brand, much in the model of some of the higher-end Burgundy houses.” Midway through the journey, he described difficulties imparting that message because of the language barrier and challenges conveying the “abstract concepts” of wine. However, he described his hosts as “very warm and open-minded.”
The trip represents the 14th consecutive trade mission to China organized by the California Wine Institute, but the first time that Sonoma County wines are the focus of the delegation. The journey was six months in the planning.
When it comes to American wines, Chinese consumers are most familiar with Napa Valley, said the Wine Institute’s Linsey Gallagher. She said this trip affords an opportunity to put the spotlight on another wine region.
Gallagher said Asia represents “the next frontier in terms of developing wine markets. Everyone is focused on it.”
Total U.S. wine exports hit a record $1.55 billion in 2013, up 16.4 percent compared to the previous year, according to the Wine Institute. Regionally, Japan, mainland China and Hong Kong were California’s third-, fourth- and fifth-largest export markets by value after the European Union and Canada. The three Asian markets represent a total export value of $223.4 million.
Sonoma County wines, however, are still a “blip on the radar” in China, said Honore Comfort, executive director of Sonoma County Vintners.
“It takes a long time to build the reputation of a region,” Comfort said. “The reason why this trip is significant is because it’s our first major foray to do that.”
The Sonoma County contingent spent the first week of the trip hosting wine seminars and tastings in the mainland China cities of Beijing, Shanghai and Guangzhou. This week, the group is in Hong Kong for Vinexpo Asia-Pacific, which is attended by 18,000 wine trade professionals.
Comfort said the trip builds on a visit Chinese wine writers, educators and trade professionals made to Sonoma County last year.
Sonoma County vintners face formidable challenges increasing their market share in China, including costs associated with getting their product overseas and into the glasses of consumers. A Sonoma County wine that retails in the United States for $12 sells for $50 to $60 in China after all of the fees and taxes are factored in, said Steve Messinger with Vinum Exports in Santa Rosa.
He said the Chinese government’s new austerity program, announced in fall 2013, has mainly dampened sales of higher-end European wines, but also affected sales of California varietals. Wine exports to China were down slightly in the first quarter of 2014, according to Gallagher at the Wine Institute.
Messinger, who is taking part in the Asia trip, said there’s much more of a domestic wine industry in China than when he first visited the country in 1997. He said the number of people living in Shanghai alone — 20 million people — represents an opportunity for growth.
“If you can deal with 1 percent of that population, that’s a serious number,” said Messinger, who described the target market for Sonoma County wines as wealthy, well-educated Chinese who have visited or lived in the United States.
David Fischer, director of sales and marketing for Ramey Wine Cellars in Healdsburg, said his main focus on the trip is to evaluate the potential for exporting wine to mainland China. The winery has been shipping wine to Hong Kong for more than a decade, he said.
Fischer said the group’s events in China were well-attended and that the response to the seminars and tastings was “very positive.”
The promotional tour comes at a testy time in Sino-American relations, with both countries trading allegations of corporate espionage and cyber-hacking. But international politics is not a focus for the marketing group, said Comfort with Sonoma County Vintners.
Messinger said China’s skyscrapers and other obvious signs of wealth are evidence to him that capitalism is thriving there. He said engaging with China is best for “breaking down a lot of those old beliefs.”
You can reach Staff Writer Derek Moore at 521-5336 or firstname.lastname@example.org. On Twitter @deadlinederek.
See the article here: http://www.pressdemocrat.com/article/20140528/business/140529518