Wine awareness in China continues to grow at a rapid rate and Australia must ensure it positions itself as a premium rather than commercial producer.
This is the key finding from Wave 3 of the AGWA-funded China Wine Barometer project, recently completed by the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia.
Investigators Dr Armando Maria Corsi, Professor Larry Lockshin and Dr Justin Cohen report a noticeable increase in consumer awareness in wine in little more than a year since the completion of Wave 1.
'Chinese consumers have more ideas about wine now compared to a year ago', Dr Corsi said.
'Even the commercial perception is going up, but not as much as the premium, and that is important.
'In terms of how Australia is perceived, in the first wave we probably would have said we were on the border between premium and commercial, but last year there was a slight increase in terms of the premium, which is a good sign.'
Dr Corsi notes, however, that other nations are in a similar boat and it’s important for Australia to communicate the right messages and to stay away from price-based promotions.
'We also cannot ignore the fact that demand for imported wine is falling (though Australia’s decline is modest compared with Old World producers) and the Chinese are becoming more aware of their own industry.'
For the second time Ningxia, which is considered China’s premium wine producing region, was included in the research, and this time it exceeded even Bordeaux in terms of consumer awareness.
'China doesn’t yet have a high premium perception. Most people know it makes more commercial wines, but they do recognise wine is made in their country. It’s something we have to consider for the future because it’s not just about competing with other imports.'
Sicily, Provence, Burgundy and Loire all showed marked growth in terms of consumer awareness, with Bordeaux, Barossa Valley and Napa Valley declining.
Positively, Australian wine is recognised as fashionable, easy to drink and palatable, with red wines available in popular varieties.
Australia is also securing a higher than expected level of repurchase, suggesting that consumers who try Australian wine like it and buy it again.
The research showed that having tried a wine previously is the most important element driving the choice of wine on-premise, followed by wine and food matching and the recommendation of a dining companion. Waiters or sommeliers have negligible impact.
Dr Corsi said growing consumer interest highlighted the need to expand sales and marketing efforts beyond fine dining restaurants and to look at the potential in Tier 2 cities such as Chengdu, Shenyang, Wuhan, Hangzhou, and Chongqing, rather than just the obvious targets of Beijing, Shanghai, Guangzhou and Shenzhen.
'I wouldn’t say Tier 1 cities are saturated but they are more consolidated, so trying to break through and change perceptions about what is good wine and who makes it can be quite hard', he said.
'Focusing on Tier 2 or even Tier 3 cities means moving into newer territory where wineries have the chance to write the book of what makes a good wine and set expectations for future consumption.'
The full report of Wave 3 will be released in the near future. Wave 3 built on Wave 1, and includes specific findings about on-premise purchases.
The investigators recently completed data collection for Wave 4, which (like Wave 2) has a similar focus on off-premise purchases.