A three-year study by the University of South Australia’s Ehrenberg-Bass Institute for Marketing Science funded by Wine Australia is nearing completion and has found the number of people buying imported wine in China and their frequency of consumption was on the rise.
Larry Lockshin, professor of wine marketing at Ehrenberg-Bass, leads research into marketing related to consumer choice, packaging and retailing, and is an acknowledged specialist in all aspects of the Australian and global wine business.
He said the surprising growing off-premise trend represented an opportunity for the Australian wine industry.
“It was assumed when we started this project that on premise, especially western restaurants in China, would be the driving force behind wine consumption but what we’ve seen over the survey is that more wine is being consumed off-premise, which means people are buying it online, in wine shops and to some degree grocery stores than the last few years,” Lockshin said. “People are moving from wine as purely a drink for formal occasions where eight or 10 people would share a bottle by having a ‘little teeny glass’ each at a special occasion like a wedding or business function. Then the occasions started to become less formal.”
The Australian wine industry needs to ask itself ‘what kind of retail channels are going to access that growing trend. Lockshin said the opportunity was there but it’s not going to be a pot of gold without work.
“Build your brand, build it slowly, sustainably, know who you are selling to, pay attention to your labeling and pricing, spend some time to make it work,” he said.
The Wine Australia Export Report December 2015 shows that the value of Australian wine exports jumped 14 percent to $2.1 billion in 2015, reaching its highest growth in value since October 2007. South Australia is the biggest wine producing state in Australia, accounting for almost half of total production.
The strongest growth was in China, Australia’s third biggest export market behind the U.S. and U.K., which grew 66 per cent to $370 million.
The University of South Australia study includes six surveys of Chinese buyers of imported wines conducted over the three-year span of the project.
The latest survey results – the fifth of the six – found 52 percent said they drank wine at home for a relaxing drink once a week or more often, 46 percent said they consumed wine once a week or more often with an informal meal at home, while more than half the people in the most recent survey drank wine at special occasions at least once every two months.
Justin Cohen, a postdoctoral research fellow in wine marketing at the University of South Australia, who has made several trips to China during the project, said wine had shifted from being just a special occasion experience to being a more everyday product.
“Frequency of consumption is rising rapidly for people consuming wine off-premise, even three years ago that wasn’t a major thing people were saying when asked why they were buying wine,” Cohen said.
“One of the things that we’re starting to counsel wine brands about is if you make your product all about special occasions, that limits you entering the head-space of a potential consumer,” Cohen said. “But if you’re also saying ‘we’re an approachable product from Australia, we’re a clean, green, safe place with a great lifestyle’ then you’re probably more likely to enter the consideration set for purchase occasions that happen more frequently.”
Cohen said Australian wine brands were doing a good job of educating people in China about their wine but they needed to shift their focus from the sommeliers and masters of wine to the uninitiated. “I think one of the challenges is before we start getting into this whole idea of ‘what do we want to communicate about Australian wine’ we have to make sure that people have even heard of us – there’s people that don’t even know that we exist,” Cohen said.
And while France is dominant, the Chinese actually have a very large domestic industry – four out of five bottles of wine sold in China are produced there.