Wine producers down under are breathing a sigh of relief today following the announcement that China’s Ministry of Commerce (MOFCOM) has scrapped the punitive tariffs on Australian wine after a three-year battle.

 

The abolition of tariffs, in keeping with the MOFCOM’s interim decision of 12 March 2024, comes into effect from tomorrow (29 March 2024).

Prior to their imposition, which came into force in 2020, mainland China was Australian wine’s most valuable export market.

Australian exports to mainland China peaked at AU$1.3 billion in the 12 months to October 2020. The volume of wine exported into China during this period was 121 million litres.

Tariffs have had a grave impact on wine exports to the market. In the 12 months to December 2023 they had fallen to AU$10.1 million, a difference of almost AU$1,290 billion in value. Volume plummeted by 119.6 million litres to 1.4 million in the same period.

The number of exporters to the market has also decreased from 2,198 to 117 over the same period, according to Wine Australia.

The organisation’s CEO Dr Martin Cole welcomed the news, saying that Mainland China remains an important market for Australian wine. “Over many years, Australian wine companies have developed close relationships with importers, buyers and consumers of Australian wine in China and these relationships remain important to our wine community. Pleasingly, we know that trade and consumer sentiment for Australian wine in China remains positive.”

However, he warned that the Chinese wine market is different now to what it was at the end of 2020, at the peak of Australia’s success in the region. He said that Wine Australia would “support the Australian wine sector to re-enter the market through a coordinated set of activities and advice on market requirements”, but noted that the organisation will be “continuing our market diversification efforts in other markets”.

Comments from trade bodies suggest that Australia’s wine sector is hesitant to rely as heavily on the Chinese wine market as was previously the case.

Australian Grape & Wine (AGW) chief executive Lee McLean also welcomed the news, but said AGW would “be maintaining our focus on diversifying our export footprint and growing demand here in Australia as well”.

According to official import statistics from Trade Data Monitor, total wine imports to China have fallen from 688 million litres in 2018 to 248 million litres in 2023 – a third of what it was five years ago. (Source: Trade Data Monitor)

The top four countries for wine imports to mainland China of France, Chile, Italy and Spain all recorded significant declines in their exports to mainland China in the 12 months ended December 2023. In 2023, the volume of wine imports from France fell by 29 per cent, Chile by 18 per cent, Italy by 31 per cent, and Spain by 48 per cent. (Source: Trade Data Monitor).

 

Trade response

 

Penfolds owner Treasury Wine Estates (TWE) has said in response to the announcement that it will begin to expand its premium and luxury Australian wine distribution in China as well as increasing investment in local sales and marketing.

CEO Tim Ford said the announcement “signals the start of our ramp up to re-establish our Australian luxury and premium wine distribution in China”.

“We’re excited to bring more of our Australian luxury and premium wines back to the China market,” he said, but noted that TWE is “mindful it will take time to sustainably regrow both supply and demand”. The company also aims to maintain its growth in other global markets where Penfolds has increased business in recent years.

In February TWE was already poised to divert Penfolds shipments to China, a position the company can now act on.

Australian producers aren’t the only ones celebrating the news. Trade show organiser Vinexposium is gearing up for its 2024 Hong Kong exhibition set to take place in May. Company CEO Rodolphe Lameyse told the drinks business this morning that “Australian wines are poised to capitalise on Vinexpo Asia as an opportunity to reintroduce themselves to the market.

He said: “With two months remaining until the show, the timing is ideal for preparing for this revitalised platform, which will unite key players in the sector. This announcement sends a strong positive signal for the industry, signifying the resurgence of opportunities in the Chinese market.

“This development also bodes well for Vinexpo Asia, as it will draw increased interest from Chinese buyers eager to engage with the numerous Australian producers showcasing at the event.”

Over the past four years, China’s wine industry has witnessed significant transformations, marked by market reshuffling and a noticeable dip in consumption. As Australian wine stands on the cusp of a grand return, the mood within the industry has palpably shifted. How are these changes reflected in the sentiments of wine importers and merchants? Find out in our on-the-ground reporting from Chengdu, at the heart of the country’s largest wine and spirits fair.

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From March 20 to 22, 2024, China’s largest expo for the wine and spirits industry, the 110th China Food and Drinks Fair (CFDF), also known as the Spring Fair, was held in Chengdu.

Despite a slight decrease in the buzz compared to its previous edition, the fair’s vibrancy and the industry’s enthusiasm did not wane.

In keeping with tradition, the fair commenced officially on March 20. Organizers had reserved five-star hotels in the city to set up exhibitions 4-5 days ahead of the main fair. This year featured four hotel exhibitions dedicated to wine, with the Shangri-La and Kempinski hotels serving as the main venues.

The hotel venues saw a noticeable uptick in visitor numbers, especially when compared to the 109th CFDF held in Shenzhen during October 2023 (the Autumn CFDF). The Shangri-La Hotel, in particular, was abuzz with activity on the afternoon of March 17th. Even as the hotel exhibitions were drawing to a close on the 19th, these locations continued to attract significant crowds, indicating strong and sustained demand among merchants this spring.

As for the main exhibition hall, which welcomed visitors starting March 20th, turnout was encouraging as well. The strategic separation of wine and spirits from the Baijiu exhibitions into distinct venues, although situated a distance from downtown Chengdu, did not deter the audience’s enthusiasm. A considerable number of attendees made their way to the venue on the morning of the opening day, eager to explore the offerings.

One vendor, reflecting on the foot traffic and engagement levels at the event, shared, “This year’s main wine exhibition hall saw slightly less activity than last year, yet attendance was still strong.”

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Importers Take the Lead

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As in previous years, the Spring fair was primarily organized by major wineries and importers, particularly in the imported wine sector, with fewer wineries themselves present. For instance, at the Shangri-La Hotel, only a few large imported wine brands like Castillo Diablo and Bernard Margrez were displayed, with the majority being import companies.

Although the fair was large, covering 325,000 square meters and hosting over 6,600 exhibitors, it still lacked the close connection to upstream brand owners. Compared to international expos like Vinexpo and Prowine, the CFDF, despite its scale, appeared more as a domestic showcase rather than a global marketplace.

Additionally, some renowned wine brands and companies in China, including ASC Fine Wines, Treasury Wine Estates, and Castel, chose to set up exhibitions outside the main hotels and fairground, aiming for a more conducive environment for deal-making and negotiations.

The presence of lookalike brands attempting to mimic more renowned labels spotted at the fair still underscores the ongoing challenges within the market concerning brand authenticity and consumer trust. However, this year marked a notable decrease in overt promotion of such brands, perhaps indicating a shift towards more genuine brand representation.

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Strong Traffic, Slow Business

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Despite a reasonable turnout, the hesitance to close deals was palpable, echoing the “look but don’t buy” atmosphere from the previous year. This cautious approach from both new and established clients signals a broader trend of market conservatism.

Liu Anqi, the China Regional Manager for Spain’s DAVIDWINE, remarked that although turnout was good, particularly peaking on the afternoon of March 17th, many visitors were merely browsing without purchasing, mirroring last year’s trend. Numerous new clients showed only superficial interest, adding WeChat contacts without engaging in further discussions.

Li Yajun, General Manager of Shanghai-based wine importing company Merveille Business, observed an uptick in signed deals compared to the previous year, mainly with existing or potential clients who had been in discussions beforehand. The chance of acquiring new clients was slim, missing the direct negotiation and on-the-spot signing that was common before the pandemic.

The decision of major brands like Treasury Wine Estates, ASC Fine Wines, and Castel to opt out of exhibiting also reflects a strategic focus on maintaining existing client relationships over seeking new ones.

Liu Anqi pointed out that many of her clients did not attend the fair, suggesting a shift in how younger demographics and small wine bars source their wines, often exploring trends in Shanghai and connecting directly with brand owners online rather than attending the fair.

The preference of the traditional wholesale channel for well-known brands was also evident, with Li Yajun focusing on business within these channels, representing brands under the DBR Lafite Rothschild Group, which enjoy popularity in the traditional market for their reputation and controlled pricing.

Australian Wine in Limelight

The timing of the fair coincided with a potential turning point for Australian wine. On March 20, Chinese Foreign Minister Wang Yi announced during his visit to Australia that the wine dispute has been “appropriately resolved”, with a final verdict expected by the end of this month.

During the fair, the South Australian government hosted a masterclass on premium South Australian wines. The masterclass was fully booked and even required additional seating due to high demand, underscoring significant interest in Australian wines.

This enthusiasm among participants suggests a readiness to embrace Australian wines once again, amidst hopes that it could invigorate the declining import trend of recent years.

Journalists and industry participants that we have spoken to on the fairground overwhelming welcomed the return of Australian wines, predicting it would help reverse the trend of declining imports that had persisted for over five years. The anticipated re-entry of leading brands like Penfolds is expected to reignite consumer interest in wine.

However, the return of Australian wines, while welcomed, remains a test of market receptivity.

An exhibitor who talked to us at the fair cautioned that it might be premature to declare a complete turnaround for the wine industry based on the reintroduction of Australian wines alone. The critical question remains whether the potentially large volumes of Australian wine entering the Chinese market can be fully absorbed by consumers. Without genuine consumer uptake, any initial surge in imports could eventually revert to a downward trend, emphasizing the need for strategic market integration and consumer engagement to sustain growth.

-Written by Morris Cai in Chengdu, China

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It’s official: sommeliers are smarter. A new study investigating brain response to tasting wine found that sommelier training doesn’t just refine the palate, but reshapes the brain itself.

 

The study, ‘Sniffing out meaning: Chemosensory and semantic neural network changes in sommeliers’, investigated whether brain response to tasting wine differs between sommeliers and nonexperts.

Scientists conducting the research wanted to learn whether sommeliers were more advanced not only when it came to picking out subtle differences between the wines, but also whether they could better translate them into complex verbal descriptions.

The researchers observed structural differences in the brain between sommeliers and casual wine drinkers.

Findings from the study also revealed that sommeliers and casual drinkers engaged different brain regions while tasting wine. Casual drinkers used their frontal cortex more, suggesting more effort was exerted during the tasting. Sommeliers were better at activating the parts of their brains which use language and taste, and making connections between the two.

Manuel Carreiras, the scientific director of the Basque Center on Cognition, Brain and Language, headed up the research.

“The current study represents one of only a handful of experiments that have examined sommelier brain structure and function during tastings,” the researchers concluded. “Our results indicate that experience and experience in wine tasting likely modulate both the tasting and language circuits to produce superior flavour recognition abilities, as displayed by sommeliers during blind tastings.”

 

HOW WERE THEY TESTED?

Scientists used Functional MRI analysis to understand the differences between how sommeliers and casual wine drinkers use their brains when tasting wine.

A group of 28 healthy adult volunteers were used in the study, divided between trained sommeliers and casual wine drinkers.

Both parties were given four different Spanish wines to taste while their brains were hooked up to an MRI machine, and asked to rate the complexity of each wine.

Their ability to judge complexity was also then judged following the MRI scan, where they were given the same activity to do in order to measure how well the sommeliers could pick up on subtle differences in the wine’s flavour and aroma.

The wines given to participants included a Penedès Chenin Blanc, a Godello from Valdeorras, a Ribera del Duero Tinta del país 100% Tempranillo and, considered the most complex, a Priorat red blend of Garnacha, Cabernet Sauvignon, Syrah, and Cariñena.

“A very complex wine, as a result of blending Grenache, Cabernet Sauvignon, Carignan, and Syrah. Purple colored, with blue hues. Its aroma is concentrated and heady, covered with tobacco and ripe cherries. With moderate acidity and abundant earthy red fruits, it overlaps with coffee, licorice, and spices, all harmonized by the subtle and well-balanced tannins. Its presence in the mouth is long and with a final touch of peach.” (Description of 2012 Clos Mogador by a sommelier who participated in this study).

Sommelier training has picked up traction in recent years, particularly in Japan, where gaining qualifications is particularly popular. In the early 2000s, certified sommeliers in Japan numbered around 7,000. As of 2023, the Japan Sommelier Association lists just shy of 40,000 such accredited specialists in the country, according to The Japan Times.

Showcasing Chinese wines alongside a lineup of global benchmarks at a tasting this week, fifth-generation Austrian winemaker Lenz Moser V says whites are China’s next big hit. Eloise Feilden reports.

Stefan Neumann MS and Lenz Moser at the Peninsula London

“When the Germans and the Austrians were still climbing trees, the Chinese were developing culture,” Moser said to a room of Masters of Wine, journalists and sommeliers on Tuesday (19 March).

The Changyu Moser XV winemaker stood alongside Master Sommelier and fellow Austrian Stefan Neumann for the inaugural London Tasting, a blind comparison of dry white and sweet wines showing some of global ‘benchmarks’ against lesser-known wines and regions.

Inspired by Spurrier’s 1976 Judgement of Paris, Moser held his own Paris Tasting in February, showing Changyu Moser XV wines alongside the likes of Cloudy Bay, Opus One, Lafite, Sassicaia and Chablis Premier Cru Fevre.

The wines, immediately recognised by the judges as distinctly Chinese, held up well against the global icons which set the benchmark for quality.

In London this week at the Peninsula hotel, Moser and Neumann also presented some of the winemaker’s global projects against iconic names including d’Yquem, Sonoma’s Kistler and Wachau’s F.X. Pichler.

 

“The stars are the wines,” Moser said. His objective? To bring lesser-known regions into a conversation with those considered the best in the world. “One of my mottos is simple – life doesn’t happen by itself, you have to make it happen,” he said.

Dry white wines were the star of the show, followed by two flights of sweet wines. “I believe white winemaking is much more difficult than red winemaking,” he said, somewhat controversially.

The latest vintage of Changyu Moser XV’s only white wine, 2021 Cabernet Sauvignon ‘Blanc de Noir’ (the only white Cabernet Sauvignon in the world), featured in the tasting.

In 2021, red wine’s share of Chinese wine production stood at 86.3%, according to OIV figures. As it stands, China’s wine consumption is also mostly about red wine; with a share of 92% in 2021, it is the country that consumes most red wine, at least in relative terms. This share has been consistently increasing since the year 2000, when it was 81%, at the expense of white and rosé wines, which in 2021 account for 7% and 1% respectively.

However, Moser is putting his hopes in China’s ability to produce (and consume) quality whites. “We don’t want to miss the boat on the white wine boom in China,” he warned.

This comes with its fair share of challenges. When searching for new vineyards for Changyu in 2015, Moser was looking for plots to make white wines, but couldn’t find any. As a solution, he began making white wine using free-run juice from Cabernet Sauvignon berries in Ningxia — a process which is “relatively expensive” considering how many grapes are needed for even small quantities of colourless free-run liquid.

 

Now he says his Chinese Chateau is on the way to producing more white wines, exploring new varieties to do so.

“The only thing I can promise from China is that with each vintage, quality is getting better,” he said this week.

Quality and value were the focus in terms of comparison at the London Tasting, rather than style. “We picked what we like the most,” he said in response to a question about the through-line of the tasting.

Six sweet wines were also shown, as a bid to “break the stigma” with the category which is being consumed less and less.

An ice wine from Changyu, made in the Lianoning region of China, was shown blind in a flight also comprising a Château de Fargues Sauternes and Kracher Beerenauslese Cuvee from Austria.

According to Moser, Chinese wine’s producers brought 340ha of Vidal to China, producing ice wine at three quality levels, as a means of competing on the global stage when it comes to fine wine — an objective certainly spurred on by tastings like this, which list Chinese wines side by side with the likes of iconic names including Yquem.

The full list of wines includes:

1. 2022 Assyrtiko, Vassaltis, Santorini, Greece 14% ABV (tasted blind)

2. 2021 Furmint, MM5, Ma’d Moser, Tokaj, Hungary 14% ABV (tasted blind)

3. 2022 Gruener Veltliner, New Chapter, Niederösterreich, Austria – from Magnum 13% ABV

4. 2022 Grüner Veltliner Ried Zwirch, Markus Huber, Traisental, Austria 13% ABV

5. 2022 Grüner Veltliner Kellerberg, F.X. Pichler, Wachau, Austria 13.5% ABV

6. 2021 Furmint, MM55, Ma’d Moser, Tokaj, Hungary 14% ABV

7. 2021 Chardonnay Les Noisetiers, Kistler, Sonoma Coast, USA 14.3% ABV (tasted blind)

8. 2021 Cabernet Sauvignon ‘Blanc de Noir’, Helan Mountain Range, Ningxia, China 14.5% ABV

9. 2021 Pinot Gris, Clos Saint Urbain, Rangen de Thann, Zind Humbrecht, Alsace, FR 13.5% ABV

10. 2022 Arinto, Ribeiro & Moser, Vinho Regional Lisboa, Portugal 12.5% ABV

11. 2021 Vidal, Ice Wine, Changyu, Lianoning, China 11%ABV (tasted blind)

12. 2015 Château de Fargues, Lur Saluces, Sauternes, France 14%ABV (tasted blind)

13. 2020 Beerenauslese Cuvee, Kracher, Burgenland, Austria 11% ABV (tasted blind)

14. 2016 Château d’Yquem, Sauternes France 14% ABV (tasted blind)

15. 2013 Tokaji Aszu 6 puttonyos MM 555, Mad Moser x Grand Tokaj Hungary 9,5% ABV (tasted blind)

16. 2019Tokaji Aszu 6 puttonyos, Füleky, Tokaj, Hungary 10% ABV (tasted blind)

Filippo Bartolotta delves into how the “structured”, “full-bodied” and “powerful” wines of Amarone della Valpolicella DOCG are shifting towards a smoother style.

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We all hold certain expectations for an Amarone di Valpolicella: a structured, full-bodied wine with a powerful sip, typically sweet, alcoholic, and dense. These defining characteristics have made Amarone recognizable and successful worldwide since the Nineties, propelled by talented winemakers with commercial acumen and appassimento expertise. However, the market landscape has shifted. Consumer preferences in this new millennium are evolving, leaning towards a more “easy-going” approach compared to three decades ago.

Winemakers in Valpolicella, who themselves are consumers, recognize this shift and are reevaluating methods, timing, and processes in vineyards and wineries to reclaim the market appeal of their most important red wine. According to Andrea Lonardi MW, an expert in the Amarone territory, the path to regaining consumer interest involves a shift from quantity to quality production, transitioning from controlling leadership to prestige, embracing new markets and communication strategies, and adapting winery practices to address the challenge of global warming.

Moreover, there’s an opportunity for Amarone to become a sought-after collectible wine. J.C. Viens, a seasoned wine educator and market expert, highlights the potential convergence of Amarone’s intrinsic value and the growing interest in Italian wines beyond traditional regions like Piedmont and Tuscany. Veneto, with its rising prominence, presents a unique chance for Amarone producers to position their wines as collectibles.

Interestingly, amid this evolution, some Valpolicella producers have pursued alternative approaches, emphasising specific terroirs, grape varieties, and gentler winemaking techniques. This ‘New Wave’ of producers is gradually reshaping the appellation’s landscape, offering Amarone wines that prioritise elegance and finesse over density and power.

 

An apt comparison can be drawn between this changing style and the contrast between Arnold Schwarzenegger and tennis champion Jannik Sinner: static muscularity versus agile strength. Similarly, Amarone’s evolution involves maintaining strength while gaining smoothness and finesse by viewing the appassimento process as a grape resistance journey, which adds complexity, rather than merely sugar concentration.

 

Spirit of innovation

 

Leading the charge towards this new approach are both larger and smaller wineries. While larger businesses can dedicate resources to this shift while maintaining broader market appeal, smaller wineries often pioneer these changes, taking risks and challenging conventions. The latter includes producers like Contrada Palui, Corte Rugolin, Corte Sant’Alda, Monte dall’Ora, Rubinetti Vajol, and Secondo Marco. They exemplify this innovative spirit, offering wines that defy Amarone’s traditional boldness in favour of freshness, lightness, and flavor complexity.

Before the 2024 Amarone Opera Prima, I visited each and every one of them, noticing that their Amarone either showed a much lower residual sugar than the 9 grams per litre allowed by the appellation, or a relatively lower alcohol content, never exceeding 15-15.5%.

Marco Speri has been making a point of producing a contemporary style Amarone since the foundation of his winery in 2008, calling it Secondo Marco, meaning “according to Marco”, aiming for a “light and refreshing style of Valpolicella and Amarone like we used to make in the 70s,” as he put it.

The new winery to watch is Contrada Palui, with Hans Pichler showcasing a delightfully transparent and vibrant 2018 Amarone with only 0.8 g/l of residual sugar: “I am only bringing home what nature gives me at 500m above sea level, which is very light red-driven fruit with an intense acidity that I love!”

Nicola Scienza of Rubinelli Vajol opted not to write ‘Amarone’ on his label with a capital ‘A’: “I wanted to underline how your wine doesn’t want to be too big and bold but rather a very easy to drink wine without giving up complexity and the Valpolicella Classica sense of place. We are happy that there’s more attention given to this style of wines as I remember not too long ago my ‘amarone’ wasn’t appealing to some very important Northern European importers, but now that’s what they ask for!”

 

 

Big players

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And while the smaller wineries are marching towards this more refreshing style, which is making many young sommeliers all over the world burst with joy and excitement, I think we also need to be very aware of the importance the larger wineries are having on the entire appellation. Bertani has always been a reference point for this style of less opulent and more elegant Amarone, and its old vintage collection is an undeniable documentation of elegant Amarone with little residual sugar and low alcohol.

The same goes for another pioneer winery like Bolla, owned by one of Italy’s larger players, Gruppo Italiano Vini (GIV). Bolla’s winemaker, Christian Zulian, is convinced that Amarone della Valpolicella can not only be made basically as a dry wine with 15% alcohol, but that he wouldn’t know how to do it otherwise: “I do not like to leave residual sugar and malo in my wines. I make sure malolactic takes place correctly before fining the wines and my residual sugar is always below 1g/l (as a matter of fact around 0.4).”

Famiglia Pasqua Cascina San Vincenzo Amarone della Valpolicella is another example of Amarone moving towards a lighter and easier drinking attitude without giving up smoothness, roundness, and volume. I have been tasting from this wine from the big botti for quite a few years now with their winemaker Carlo Olivari and owner Riccardo Pasqua. I still remember the two of them offering some of the first samples with pride and joy, just like two boys who just invented a new toy: “so what do you think?” I taste: transparent ruby color, sour cherries, liquorice, eucalyptus and some balsamic notes and a crunchy red currant palate with a propolis-like finish, delicious! Seeing one of the oldest and largest players of Valpolicella moving towards this direction means that so many people will be able to get hold of these newer styles.

Camilla Rossi Chauvenet of Massimago adds: “A few years ago, when I was going out with my girlfriends, I remember nobody ever felt there was a moment to drink Amarone. Since then, I promised myself to focus on producing something easier to drink and more approachable. That’s why we have also played with more down-to-earth and contemporary style labels. I believe the image has to reflect the product!”

My last visit was a vertical tasting of Sartori Amarone della Valpolicella I Saltari, produced following a very low yield approach – not in order to extract more, but rather to enhance terroir. I get to the winery bringing with me Contrada Palui and Rubinelli Vajol Amarone and I ask if they are in the mood for a blind tasting. Andrea Sartori tasted the wines, smiled at me, and said: “We are going back to the original formula.”

Just as the original ‘New Wave’ movements of the seventies reshaped various industries, a change in Amarone style has the potential to disrupt the entire Valpolicella system. This shift invites contemplation: are we witnessing a true ‘New Wave’, a return to origins, or a fusion of past and present?

During my last trip to Valpolicella I cracked open a few older bottles of Amarone and I’m convinced that what’s happening now is a return to the origins. A couple of these wines show a clear picture of how recent Amarone della Valpolicella is paying a tribute to the classic older, and still wonderful, vintages.

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Old vintage example 1

 

 

Amarone della Valpolicella Bolla 1950 is a delicious wine with bright red fruit, orange peel, fennel seeds, basil and a delightful tea-tree oil complexity. The palate is light and uplifting with so much juiciness and energy – it’s impossible not to drink it! Alcohol is 12.64%, and the residual sugar only 1.84g/l!

 

Old vintage example 2

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Amarone della Valpolicella Bertani 1964 is a wonderful example of how the subtlety of dry flowers and warm spices blend with plums, cherries and liquorice with a gentle acidity and with a lingering finish. Great fine wines still alive and kicking with an easy to drink and yet complex style: and this adds more intrigue and excitement to the future of Amarone production. Alcohol is 15% and the residual sugar 3.2g/l.

 

Embracing the shift

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In conclusion, Amarone’s evolving style reflects a nuanced response to changing consumer preferences, environmental challenges, and market dynamics. Embracing this shift requires a willingness to challenge tradition while preserving the essence of what makes Amarone unique. It’s a journey of rediscovery and reinvention – a journey that invites us to rethink, reimagine, and rediscover Amarone della Valpolicella.

Over the past two years, China has witnessed the birth of a novel retail paradigm in the liquor sector, characterized by the integration of online ordering and rapid offline deliveries within 20 minutes. This model, known as instant O2O (online-to-offline) liquor retail, marks a significant shift towards convenience and speed, and has become a new focus for growth even in challenging times.

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In the context of China’s fiercely competitive food delivery market, dominated by behemoths like Alibaba’s Ele.me and Tencent-supported Meituan, the niche for delivery services focusing exclusively on alcoholic beverages, from beer to wine, is still emerging.

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Among these, Wai Ma Drinks Delivery (歪马送酒), operated by Meituan, one of China’s leading delivery services, has carved out a distinctive niche. With a proprietary logistics network and strategically located forward warehouses, it guarantees expedited same-city drinks deliveries. Leveraging its WeChat mini-program, Wai Ma promises an impressive delivery time of approximately 15 minutes for an assortment of alcoholic drinks, spanning beer, wine, spirits, sake, and baijiu.

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Launched in 2021, Wai Ma has rapidly expanded its operations to encompass 16 cities across provinces like Guangdong, Sichuan, and Chongqing by May 2023, backed by substantial marketing efforts in each new market it penetrates.

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Nonetheless, Wai Ma wasn’t the pioneer in this market segment. Jiu Xiao’er, launched in 2017 by Guangxi Call Liquor Network Technology Co., Ltd., and translating to ‘alcohol server’ in Chinese, made an early promise of delivering alcoholic beverages within 25 minutes. Today, it extends its services to 15 provinces, municipalities, and autonomous regions, having secured investments from giants such as Tencent and Sequoia Capital between 2019 and 2020.

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The express liquor delivery services proved to be profitable. In 2022, even during the pandemic Jiu Xiao’er reported sales exceeding RMB 2 billion (approx. US$278.4 million). While specific figures for Wai Ma remain undisclosed, the platform experienced a notable 600% surge in sales year-over-year in 2023.

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The advent of instant liquor retail has also prompted traditional retailers to venture into this space. For instance, in 2021, Alibaba Group’s Hema Fresh launched “Hema X18 Wine Cellars” in 10 cities, offering a swift 18-minute delivery service for alcoholic products.

Both Jiu Xiao’er and Wai Ma predominantly feature wines under RMB 100 (around US$13.9), including international labels like Casillero del Diablo, Franzia Winery, Knock Knock, and TWE’s Rawson’s Retreat. The competition on pricing between the platforms is fierce, with Wai Ma often providing more economical options than Jiu Xiao’er.

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In addition to mainstream wines, they also cater to the premium segment with selections from Bordeaux and notable brands such as Cloudy Bay and Penfolds’ Bin series. Yet, a wine distributor for both platforms noted that the best-selling items are those priced below RMB 100 per bottle.

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Its fast growth is partly attributed to convenience. The retail model eliminates the need for consumers to stock up on alcohol, offering the luxury of having drinks delivered to their doorstep within 30 minutes, with items like beer and white wine served chilled.

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Challenges of Low Price and High Costs

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Despite the model’s benefits, it’s not devoid of challenges. Wine occupies a niche market, overshadowed by beer, which constitutes over 60% of Jiu Xiao’er’s revenue, reflecting its wider appeal. Past incidents of counterfeit wines on e-commerce platforms have also made consumers wary, driving them towards more reliable purchasing channels.

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The price-sensitive consumer base for these platforms primarily seeks entry-level, recognized wines, thus narrowing the scope of products suitable for this distribution channel.

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Furthermore, the logistics associated with instant retail incur significant costs, from vehicle upkeep to labor expenses. For example, Meituan delivery personnel, with one to three years of experience, command an average monthly salary of RMB 11,000 (US$1533), higher than workers of same working experiences in other industries.

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Such operational costs necessitate strategic adjustments. Hema Fresh, facing the brunt of these expenses, has reevaluated its approach, raising its free shipping threshold and introducing exclusive in-store pricing in 2023. Moreover, it has begun integrating its instant alcohol retail with other product categories, signaling a potential gradual withdrawal from its 18-minute delivery promise.

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Whether these platforms can sustain their momentum and overcome their challenges remains to be seen, but one thing is clear: the quest for instant satisfaction has spurred the creation of a novel retail format for wine sales.

Privately owned Italian wine group Argea has big plans for the coming years, which could see it become not only one of the most significant players in Italy but worldwide, Sarah Neish discovers.

Argea is already well along the path to becoming a force to be reckoned with.

Created when Italian wine group Mondodelvino SPA merged with private equity group Clessidra in 2021 to form a new ‘super group’, Argea has been quietly plugging away at its goal of becoming “the leader in Italian wine” (private sector) for the past few years.

At the time of the merger Mondodelvino already owned a host of Italian wine brands spanning multiple regions across the country. These include sparkling brands Cuvage and Acquesi (both in Piedmont), Ricossa (which makes Barolo DOCG and Barbera DOC wines), Poderi dal Nespolo 1929 (Romagna), Barone Maltalto (Sicily) and Codici Masserie (Puglia).

Argea’s clout was further strengthened when in 2023 it acquired Cantina Zaccagnini, which produces around 3m bottles of wine per year from 300ha of Abruzzo grapes, largely Montepulciano. All that’s missing from the group’s stellar line-up of Italian wine regions, Enrico Gobino, head of corporate communications, tells the drinks business, is Tuscany.

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Acquisition mission

Terroir hunting, in fact, is top of the agenda for Argea in order to grow its stake in Italian wine, and the group is shooting high.

“It’s no secret that we’ve been looking in Tuscany,” Gobino tells db. “We hope to have an announcement to share in the latter half of 2024.”

According to Gobino there are “huge investments” in the pipeline to grow the group’s already hefty turnover of €450 million.

“We need to see a wine company in Italy that surpasses the €1 billion ceiling,” he says.

But who are the money people behind Argea? And how have they made their millions?

Private equity company Clessidra belongs to one of Italy’s oldest industrial families, which made its fortune in concrete. Having been listed on the Italian stock exchange since 1947, in recent years the firm decided to expand its offering by buying up a smattering of Italian businesses including a perfumery and a premium prosciutto producer, before turning its attention to wine.

“The model is not just to say ‘I come in, I buy you, goodbye!’,” insists Gobino, speaking of the company’s strategy of acquiring existing wine companies. Instead, there is a unique business model in which each family-owned winery underneath the Argea umbrella owns a stake in the group.

“Argea owns 100% of its wineries and brands, but not necessarily the land,” Gobino explains. Some Italian producers within the group have long-term existing contracts with growers, rather than owning vineyards outright. Therefore, while Argea today has around 15,000ha of vines under its control, it owns “a very small part of this”.

It’s something the group would like to see change.

“In Italy, the average ownership of vineyard land is 1.5ha per grower, so you have a lot of different people owning a very small chunk of land. How do you square this with the fact that Italy is the largest wine producing country in the world?” Gobino asks.

Some winemakers in Italy, he tells db, are “extremely production oriented and not value-led”. Conversely, others are “super high-end brands without the volume.”

Argea plans to marry the two approaches together to create “brands at scale”. That way, Gobino says, we are “still connected to the roots and authenticity of each wine territory, but can compete on a global scale.”

Drawing parallels with privately owned drinks giants Grupo Penaflor and Concha y Toro in Latin America, as well as California’s E&J Gallo, Gobino says that Argea is nearing the end of its three to five year plan, which has seen the group become “a solid group with a clear profit”, and is busy orchestrating its next chapter.

This year, you can expect Argea to become more visible in the on-trade, with a focus on wines from Friuli and Campania, as well as Italian volcanic wines. Lower-alcohol expressions will also be of paramount importance for the group, with 10 low-alcohol wine products spanning red, white and bubbles, slated for release in 2024.

“If we grow, the whole ecosystem needs to grow with us,” says Gobino, who is transparent about Argea’s goal to change the face of Italian wine.

However, perhaps most telling is his assurance that “Argea does not need to stay in Italy,” hinting that international acquisitions could be on the cards.

Data from a newly-launched retail sales monitor suggest that consumers in China traded significantly down the price range during the recent Lunar New Year celebrations.

That will disappoint global spirits producers such as Diageo, Pernod Ricard and Remy Cointreau who all hoped the ushering in of the Year of the Dragon from early February would generate buoyant sales following a disappointing 2023.

However, data on baijiu demand from research house Baiguan, collected from drinks stores, supermarkets and convenience outlets (but excluding online retailers) shows consumers
celebrated only modestly.

Baijiu, China’s national drink, accounts for about 93% of its alcohol market, which is worth almost $350 billion a year. Dominant brands Kweichow Moutai and Wuliangye account for
$50 billion and $30 billion of that demand respectively.

So their trading patterns are an indicator of overall consumer sentiment.

Demand for high-end bottles in the $115+ category enjoyed single-digit growth, but they command a only a small proportion of sales, largely confined to small-scale business banquets and gifting.

In the much more significant $70+ price range which caters for family dinners and parties with friends and relatives there was a “noticeable downtrend” and more outlets were selling
the same bottles more cheaply than at the same period last year.

To compound that, Baiguan says, the “price decline” was more pronounced for the big brands’ premium bottles, which “experienced the largest drop in retail price.”

As a result of the downtrading, sales in the $14 to $32 and $32 to $55 brackets showed “significant growth”.

As the world’s biggest market for alcohol, all the global groups are attempting to lure the growing Chinese middle classes with their international brands at premium prices.

Pernod Ricard and Diageo are also producing locally distilled whiskies to boost their product ranges and to convert consumers from baijiu.

So far Cognac and whiskies are the only categories to make measurable inroads but despite heavy marketing and promotion, Baiguan predicts those categories will take only a small proportion of the growing demand for spirits over the next couple of years.

Baijiu consumption will continue to dominate and grow to a predicted $180 billion-plus by the end of 2026 but Cognac and scotch are not seen as making more than marginal headway.

China’s Ministry of Commerce has proposed lifting punitive tariffs imposed on the Australian wine, signalling an end of a three-year trade freeze that has upended Australia AU$1.2 billion annaul wine exports.

This development follows the ministry’s promise about two weeks prior for an “objective, fair, and impartial decision” after reviewing the tariffs, as we have reported.

Although the ministry has yet to publicly announce the recommendation or specify an effective date, the recommendaiton from the ministry will surely lift Australian wine industry, which has been severly battered by oversupply and declining global sales over the last three years.

“The interim recommendation to remove tariffs on Australian wine is a welcome development,” Australia’s Trade Minister Don Farrell said in a statement on Tuesday. “It vindicates the government’s preferred approach of resolving trade issues through dialogue rather than disputation,” he added.

Speaking to Vino Joy News just ahead of the news announcement, the optimsim for the positive decision was palpalble with William Dong, CEO of DMG Fine Wines, which owns Handpicked Wines and House of Arras.

“As the CEO of DMG Fine Wines, I can confidently say that we are eagerly anticipating the decision regarding the potential lifting of punitive tariffs on Australian wine by China. A positive outcome would undoubtedly be welcomed by our entire team and the wider Australian wine industry. It would not only signify the restoration of a vital market for Australian wine producers but also pave the way for renewed opportunities and growth.”

In anticpation of the lift, the company has shipped its wine stocks to tax-free Hong Kong ready for the mainland market. “We currently have 10 containers of wine in Hong Kong awaiting the reopening of the Chinese market,” Dong revealed.

“We currently have 10 containers of wine in Hong Kong awaiting the reopening of the Chinese market.”

--William Dong, CEO of DMG Fine Wines

China’s Ministry of Commerce has proposed lifting punitive tariffs imposed on the Australian wine, signalling an end of a three-year trade freeze that has upended Australia AU$1.2 billion annaul wine exports.

This development follows the ministry’s promise about two weeks prior for an “objective, fair, and impartial decision” after reviewing the tariffs, as we have reported.

Although the ministry has yet to publicly announce the recommendation or specify an effective date, the recommendaiton from the ministry will surely lift Australian wine industry, which has been severly battered by oversupply and declining global sales over the last three years.

“The interim recommendation to remove tariffs on Australian wine is a welcome development,” Australia’s Trade Minister Don Farrell said in a statement on Tuesday. “It vindicates the government’s preferred approach of resolving trade issues through dialogue rather than disputation,” he added.

Speaking to Vino Joy News just ahead of the news announcement, the optimsim for the positive decision was palpalble with William Dong, CEO of DMG Fine Wines, which owns Handpicked Wines and House of Arras.

“As the CEO of DMG Fine Wines, I can confidently say that we are eagerly anticipating the decision regarding the potential lifting of punitive tariffs on Australian wine by China. A positive outcome would undoubtedly be welcomed by our entire team and the wider Australian wine industry. It would not only signify the restoration of a vital market for Australian wine producers but also pave the way for renewed opportunities and growth.”

In anticpation of the lift, the company has shipped its wine stocks to tax-free Hong Kong ready for the mainland market. “We currently have 10 containers of wine in Hong Kong awaiting the reopening of the Chinese market,” Dong revealed.

“We currently have 10 containers of wine in Hong Kong awaiting the reopening of the Chinese market.”

William Dong, CEO of DMG Fine Wines

Speaking to Vino Joy News on the fair ground of Prowein Dusseldorf, Wakefield Wines owned by Australian wine group Taylors Family Wines, is also amping for a return to China. The winery has already hired staff in Guangzhou of South China in preparation for the re-opening.

Treasury Wine Estates, the biggesst Australian wine exporter to China prior to the tariffs, had previously revealed that the wine giant is “prepared and well placed” to resume shipping of its wines including Penfolds Bin and Icon series to the Chinese market upon a positive outcome.

However, some remain cautious about the return and are apprehensive with post-pandemic Chinese market’s buying power especially amid economic downturn and consumption depression.

Bunnamaggo Estate Wines in New South Wales was exporting about 25-30% of its wines to China prior to the pandemic, but Michael Hatcher, Wine Operations Manager at the estate, has no illusions that its exports will jump to pre-tariff levels.

“No, no, I don’t think so”, said Hatcher, when asked about his expecation on China re-opening at Prowein Dusseldorf. “Our major customers are still there, so they’re still keen to do business, but with the downturn in the economy there, I don’t think they’ll be as strong…They’re not ready to buy yet,” he paused before adding, “They will buy, but they certainly won’t be buying at the levels.”

Does the rise of cannabis-infused drinks mean the downfall of wine, beer and spirits? Kathleen Willcox investigates. 

 

Remember bong hits and blunts? Not too long ago, cannabis culture was deeply embedded in the counter-culture. The perception was that cannabis was for hippies and hip hoppers, and all about getting blitzed. Wine, meanwhile, was for deep thinkers, poets and hard-charging business types.

How times have changed. Now, billionaire business titans and eggheads like Elon Musk, Sir Richard Branson, Carl Sagan and Bill Gates have joined the followers of Jerry Garcia and Snoop Dogg in touting the merits of marijuana. It’s become socially acceptable for GOP soccer moms to indulge in a little gummy action—and openly admit it.

Drinking wine, meanwhile, has become increasingly associated with negative health outcomes and more sinister aspects of motherhood.

At this point, about 17 percent of Americans cop to ingesting marijuana according to a Gallup poll, an uptick from 11-13 percent between 2015 and 2021. This increasing comfort
around cannabis stems, at least in part, from a much more liberal legal landscape.

 

Changing Laws

As laws across the U.S. increasingly accommodate cannabis-spiked drinks in both on and off-premise outlets that also sell alcohol, sales of cannabis drinks are surging, as sales of
wine, spirits and beer plummet.

This all came to a head during Dry January when sales of alcohol were down 52 percent during the first week of the year, and many people simply swapped their winddown glass
of vino, bourbon or beer for cannabis. (Up to 90 percent of Gen Zers replaced alcohol with cannabis, according to a poll from opinion researchers at CivicScience.)

But it’s more than a month-long blip, and instead augurs a broad demographic and cultural shift, analysts argue.

“The market for cannabis infused beverages has been growing for the last several years,” says William Bogot, a partner and co-chair of the Cannabis Practice Group at Fox Rothschild LLP in Minneapolis. “Post-pandemic, many people reduced their consumption of alcohol and increased their consumption of cannabis-infused beverages.”

New emulsion methods have allowed producers to infuse nonalcoholic beer and wine-like products and seltzers with THC, CBD and more, he explains.

While cannabis is still technically illegal on the Federal level, 38 states have some form of legalized marijuana, and dozens allow sales of cannabis drinks through licensed dispensaries.

Increasingly, states are allowing producers to sell cannabis beverages online or through liquor stores—sometimes by accident.

“Sometimes these new laws have been poorly drafted,” Bogot says. “Connecticut appears to have unintentionally allowed sales of traditional dispensary-only cannabis beverages outside of state-licensed dispensaries by the mere change in serving size, so the dose per serving of THC is below the legally restrictive limit.”

Pioneers Lay the Groundwork

While there have been several significant production and legal changes that have opened the door to cannabis drinks productions in recent years, a few pioneers have been quietly laying the groundwork for the current Renaissance.

Wynk Setlzer + THC launched in 2020, and the challenges became crystal clear, fast.

“At that point, you could only sell cannabis drinks in dispensaries,” says Wynk’s general manager Phil McFarland. “And you couldn’t move products across state lines. But we realized that creating a production plant in every state we wanted to sell in wouldn’t be feasible. Can you imagine building a brewery in every state you wanted to sell beer in?”

Instead, Wynk created a mobile canning and production line that they could drive state-to-state. They linked up with marijuana processors in different states, and were able to sell
their low-dose cannabis drinks in dispensaries. But there was a consumer-product mismatch, McFarland says.

“People shopping at dispensaries don’t typically want a 2.5 or 5 milligram product,” he explains. “A joint contains about 30 milligrams of THC, whereas our cans had 2.5 or 5
milligrams a serving.”

In 2022, Minnesota transformed the cannabis market when it passed a law that allows products with up to 10 milligrams to sold in liquor stores. As of now, McFarland says that they are looking to sell in eight states that allow cannabis products in large 21+ retail stores. In 2023, Wynk doubled their revenue-year-over-year, and this year, they are forecasting more than doubling their revenue year-over-year.

Indeed Brewing Company also took advantage of the changes, rolling out a line of THC drinks in its Minneapolis taproom one month after legislators made the changes.

“We knew it was going to be big,” says Indeed’s chief business officer, Ryan Bandy. “And we had the infrastructure because we were a working brewery.”

This year, Bandy estimates that their line of THC beverages—which includes the 5 mg THC/CBD High Fiver: Pistachio Dream and the 10 mg THC/CBD Double High Fiver: Pink Burst—will account for 20 percent of their overall revenue. Bandy estimates that they will produce around 50,000 cases of THC seltzer this year.

As of now, their THC seltzers can be ordered online and shipped to 30 states.

A Transformed Drinks Culture

The culture around drinking, meanwhile, has been evolving for some time. It seems that changes in legislation are finally beginning to meet consumers where they want to be.

“When I joined Jeff Cohen and Andrew Horlick to launch Second Act Cannabis, we wanted to destigmatize cannabis through social experiences, and secure its place at the dinner table and social gatherings,” says Eric Rogers, co-founder of Second Act Cannabis. Like wine, Rogers believes that cannabis is at its best when consumed with friends, food and conversation. Their first few products are focused on food (a hot sauce and olive oil), but they plan on launching cannabis-infused maple water drinks in time for summer.

Rogers says that perception of cannabis and alcohol consumption has changed, and he sees now as the ideal time to leverage the changes in the legal landscape.

“Our target market is really new parents to baby boomers,” Rogers explains. “For parents, especially with babies, having a hangover isn’t tolerable. Cannabis represents a social alternative that meets a wide variety of needs.”

Giuseppe Infusino, chief investment officer and managing partner at InvestBev, an investment firm dedicated to the adult beverage market, agrees that everyone—but especially younger people—are consuming alcohol more moderately.

“There is no denying that beer and wine especially face significant challenges,” Infusino says. “And in markets where recreational cannabis is legal, beer and wine sales are hurting even more. Low-dose cannabis beverages will appeal to the broadest set of consumers, and pulling these products out of dispensaries and putting them into mainstream retail allows them to get into the hands of consumers who might not shop in dispensaries.”

The biggest obstacle to “massive growth,” Infusino says, is regulatory.

“The 2018 Farm Bill opened a lot of doors for the industry,” Infusino notes. “Where things shake out long term on the federal level will have broad sweeping impact on the
industry. The focus is always on federal legalization, and the Farm Bill update scheduled for 2024, but there are steps that are more likely that could have significant
impacts, as well, including deregulation and banking changes. If we get clarity there, you will see more investment into the space from investors, distributors and retailers.”

The market—especially among young consumers—is thirsty for this kind of change. Can the wine, beer and spirits industry join and benefit from—instead of fight—the
seemingly inevitable shift away from classic drinks culture toward a looser and more laidback approach to social drinking?

The history of alcohol brands investing in cannabis has not always been positive. (See:Constellation Brands’ $1.1 billion writedown in the value of its investment in Canopy Growth).

But others, including smaller brands like Indeed, and larger operations like Vintage Wine Estates in Sonoma, see it as a way to meet consumers where they want to be, while also meeting their own revenue and growth goals.

It’s a space we’ll be watching closely.

 

Fine wine merchants and private client teams may be missing a trick by failing to invest in high-net-worth women as fine wine collectors, according to some of the leading voices in the industry – with the first merchant to crack this emerging market set to have “a massive advantage”. Arabella Mileham reports

Ahead of International women’s day on Friday (8 March), Queena Wong, founder of wine network Curious Vines, a female wine networking community, and a influential voice for women in wine, told db that there is undoubtedly an issue around women collecting fine wine – but also a massive opportunity for the merchant who can get it right.

“Back in the day, we used to talk about emerging markets geographically but I do believe that women are the emerging untapped market within a luxury space,” she said.

It is not just about a “one-off, ‘let’s do a women in wine event’ for International Women’s’ day” but a long-term strategic decision to build a more balanced portfolio of clients over time, requiring “serious, multi-year investment”.

This investment includes boosting the number of women on private client sales as well as freeing up the pressure on private sale budgets to build the following organically over time, while deconstructing some of the social contract issues around fine wine and collecting and encouraging a friendlier and more inclusive space for events.

“Within the UK, there’ll be a first mover advantage to the merchants or the people that invest,” she said. “My gut instinct tells me that those that who invest the money in approaching this untapped market… will have a far more balanced portfolio of clientele.”

Although it will undoubtedly take time to build, but “you have to invest in the future,” she added.

This particularly involves easing pressure on the budgets of private client sales people and what they need to sell.

“They have to take the pressure off of this product client salespeople, because women are not going to start buying a £500 pound bottle of wine,” she pointed out.

Social constructs

According to Katy Keating managing director of Flint Wines (who previously headed up Lay & Wheeler), the key thing is having role models and influential people to pave the way and increase visibility or even challenge the perception that the wine world “isn’t just for men”.

“We have more and more women in influential roles at every step of the journey, enjoying fine wines, and it is about women seeing other women in inspirational places – even before they start to think about collecting wine,” she points out. She cites critics such as Jancis Robinson MW, Jane Anson and Anne Krebiehl MW alongside Ella Lister, who used to write the wine investment column at The World of Fine Wine before handing over the reins over to Chloe Ashton, “another female voice speaking about investing in wine”.

Keating notes that nearly 40% of Flint wines’ followers on social media identify as female, “which is probably higher than you’d expect,” she notes.

Having access to individuals who can actively help them on the journey is important, agrees Berry Bros & Rudd CEO, Emma Fox, who called it “a bit of a mission for me to really start to seek out and understand our female collectors and do a better job”.

“It is a education and engagement piece,” she explains. “When I talk to women, sometimes they don’t how to get in, how do I start collecting and what do I need to do? Because they haven’t necessarily got lots of female friends who are doing it already. So for us, it’s really about educating.”

But this education is not only for would-be clients, it’s also an internal education piece.

“We speak to high-net-worth female customers to really get an understanding of who is collecting with us, how was their journey? What more could we do?  What support did we need?” she explained. “Some of the comments that came out were that sometimes women just needed a little bit longer to think about a particular en primeur parcel, for example. Whereas I think a lot of men probably talk to each other and they might be trading in the city, or used to making those decisions quite quickly. And it’s not saying that women aren’t but sometimes they’re just a bit more considered about something.”

“We’re a pretty strong senior female leadership team, so we’re all ears!”

Lay & Wheeler is another merchant keen to engage more women clientele, and one who Wong credits as making great strides in the market.

As Beth Pearce MW notes, it is important to make sure events are “as inviting and inclusive as possible” and having both buyers and a female head of private client sales is an advantage. “These interactions help female clients feel comfortable coming along to a lunch or range tasting. Often we hear that female clients can feel unwelcome or subconsciously uninvited to great opportunities to taste and explore the world of fine wine,” she said.

The German government has called on the European Commission to permit organically-produced de-alcoholised wines to use organic certification.

Cem Özdemir, Germany’s Federal Minister of Food and Agriculture, said that the push is in response to the consumer shift toward non-alcoholic wines: “For me, a good glass of wine is also a part of the quality of life. More and more people want to enjoy wine without alcohol every now and then and that’s certainly not bad news. If you want to drink non-alcoholic wine, you should also be able to do so in organic quality.”

According to data from the World Health Organisation (WHO), Germany has the highest alcohol consumption in Europe, with the average adult German consuming 10.6 litres of pure alcohol per annum in 2020. However, this figure is a whole litre lower than it was 2010, suggesting that the German thirst for alcoholic drinks may be shrinking. Indeed, according to figures recently released by the Verband Deutscher Sektkellereien (VDS), which represents 95% of Germany’s sparkling wine producers, in 2023 Germans purchased 18 million bottles of non-alcoholic sekt, a 9.7% increase on 2022’s level.

“However, dealcoholization is not yet permitted in the organic regulations – you can’t actually explain that to anyone! We should change that quickly,” Özdemir argued. “I am therefore campaigning in Brussels and with colleagues in the member states for a contemporary and targeted adaptation of the organic regulation. This step opens the door to an additional growing market, is in the spirit of German viticulture, and thus strengthens its sustainably.”

Brussels responds

A European Commission source clarified the rules surrounding the issue to the drinks business: “Organic rules related to wine are very specific and are not the same as for processed food; the list of authorised and prohibited oenological practices are listed in Regulation (EU) 2018/848 and this list does not currently authorise the use of vacuum distillation. Therefore, vacuum distillation must be authorised for the de-alcoholisation of organic wine, in order to be able to label the final product with the name ‘de-alcoholised organic wine’.”

Vacuum distillation is a method involving heating a wine under vacuum to vaporise the alcohol, thus removing it.

However, the spokesperson suggested that a change to the current rules could be on the way very soon: “In order to address the issue, upon a request from Germany in 2023, the Commission services have started to evaluate the possibility to authorise vacuum distillation for the organic production of the products of the wine sector.”

“After the technical advice of the EGTOP (Expert Group for Technical Advice on Organic Production) and the consultation of the experts designated by each Member States in the expert group on organic production, the Commission might propose this year a delegated act, in accordance with Article 18(2), point (a), and Article 54 of Regulation (EU) 2018/848 on organic production, to amend the EU Organic Regulation and authorise such practice,” they continued. “The report from the EGTOP is expected to be finalised by the end of March. This possible act, if adopted by the Commission, will then be subject to scrutiny by the European Parliament and the Council.”

However, there is still some way to go yet.

“Please note that at this stage,” the spokesperson explained, “discussions are still on-going and we cannot presume what the position of each Member State will be on the possibility to have organic de-alcoholised wine by using vacuum distillation.”

The issue of how to view alcohol content in wine has been a thorny one for Europe in recent years. Many member states are historic wine growing countries where wine (and its alcoholic content) is part of the culture. One particularly contentious issue has been Ireland’s introduction of health information on the labels of alcoholic drinks, with Italian producers especially up in arms over the move. This issue, and that of how to capitalise on the no- and low-alcohol wine trend, were discussed at last year’s Delle Venezie DOC International Forum.

Hong Kong’s wine trade is grappling with new realities.

The city’s once-bustling wine scene faces unprecedented new challenges amid the city’s economic downturn, shifting demographics following expat exodus, and an increasing number of penny-wise locals who prefer to wine and dine across the border.

As the city goes through “a transitional phase,” the changes are reshaping the city’s wine trade and consumer behaviours, warns Jefferson Liu, General Manager for Hong Kong and Macau at EMW Fine Wines, a leading wine importer in Greater China region.

VINTAGE BORDEAUX BACK IN FAVOR

Amidst economic fluctuations in Hong Kong and China, Liu admits consumers in general are tightening their purse string and adopt a cautious approach to spending that doesn’t compromise on quality. “Hong Kong and China are currently still going through an economic downturn… This means that most people are a bit more conscious when it comes to spending and entertaining but still want a similar quality level to what they are used to,” he explains.

This economic sensitivity coupled with inflation and rising production costs heaped up on wine has led consumers to older vintages, which haven’t seen the recent price hikes, and to seek value in lesser-known regions and producers, according to the wine merchant. “Most have also shifted to smaller regions within Burgundy or well-known villages from lesser-known producers. Good value Bordeauxs have also definitely been more demanded throughout this period ” Liu adds, highlighting a shift in consumer preferences.

Jefferson Liu, General Manager for Hong Kong and Macau at EMW Fine Wines (pic: EMW Fine Wines)

CHANGING DEMOGRAPHICS

The demographic landscape of Hong Kong’s wine market is also changing. The decline in rosé wine sales, according to Liu, serves as an informal index of the expatriate population’s size, traditionally a significant consumer segment in the city. “We have seen rosé sales plummet throughout COVID, and they have not recovered entirely,” Liu remarks, suggesting a decrease in the expatriate community.

Though there’s no official data on the number of expats leaving the city during the covid era, it’s estimated roughly 20% Americans in the city have left since 2021.

Conversely, with the exodus of expats, there’s a notable increase in affluent, young, well-educated and -travelled Chinese professionals moving to Hong Kong following government’s efforts to woo mainland talents.

Local restaurants that are able to market to this segment through social media channels and apps familiar to these new immigrants such as Little Red Book (Xiao Hong Shu), Black Pearl, DianPing are performing well, Liu notes.

“The pattern and consumer behaviour is very different to the Chinese consumers we see from years past as they seem to be more open-minded and willing to explore different wines from different regions. I believe that cool and interesting looking labels also have a big role to play as most young people communicate and share through images these days,” Liu observes, indicating a pivotal change in consumption trends.

Hong Kong residents flocking to Shenzhen for cheaper options (pic: Noemi Cassanelli/CNN)

TRIPPING NORTH

However, the wine trade in Hong Kong faces challenges beyond changing demographics and consumer preferences. Since the resumption of cross-border movement in January 2023, Hong Kong residents have made more than 48 million trips to Shenzhen, significantly outpacing the 19.8 million crossings by mainlanders into Hong Kong, according to immigration statistics.

This trend coined as “tripping north” has far-reaching implications for local retail and hospitality business as locals flood to Shenzhen for cheaper and better value options from dining, entertainment to grocery shopping.

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“The city faces an imminent challenge. There are too many cheaper alternatives close by – 15 minutes to Shenzhen, and another 45 minutes to Guangzhou where a meal would cost half the price for something similar in Hong Kong with probably better service,” Liu points out, referring to the competitive pricing Hong Kong’s neighoring cities. “This is the current reality that Hong Kong has to face and will continue to face for the foreseeable future,” he warns.

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“The city faces an imminent challenge. There are too many cheaper alternatives close by – 15 minutes to Shenzhen, and another 45 minutes to Guangzhou where a meal would cost half the price for something similar in Hong Kong with probably better service,” Liu points out, referring to the competitive pricing Hong Kong’s neighoring cities. “This is the current reality that Hong Kong has to face and will continue to face for the foreseeable future,” he warns.

Hong Kong residents traveling north are projected to spend up to HK$84 billion (US$10.7 billion) in Shenzhen and other parts of Guangdong province this year, an estimate from Gary Ng, Senior Economist at Natixis SA, suggests. This expenditure represents approximately 14% of Hong Kong’s revenue from retail sales, catering services, and the hospitality sector, according to a Bloomberg report.

“Overheads are too expensive in Hong Kong, which also stifles creativity and deter people from taking any risks,” Liu points out. Yet, there’s a silver lining as the city’s weeknight economy thrives, suggesting a shift in dining and consumption patterns to earlier in the week.

Despite these hurdles, Liu is confident in Hong Kong’s continued role as a key player in the fine wine trade, contingent on the city’s zero wine tax policy. He emphasizes the importance of reasonable on-trade pricing to lure in clients.  

“As long as establishments are willing to price their fine wines on their list at reasonable rates, consumers who may be traveling from abroad or are able and willing to spend are still enticed to purchase these ‘big’ bottles,” he asserts.

Moreover, offering value to on-trade partners is critical in this climate, as Liu believes, “Being able to offer wines at significantly lower than market prices or wines that are hard to find adds significant value to on-trade partners.” This approach, he suggests, leads to a healthier merchant-to-outlet relationship and a more structured market.

In the intricate and fast-paced arena of China’s wine market, ASC Fine Wines, the country’s leading fine wine importer, like many had its share of challenges. The year 2023 has been a testament to ASC’s resilience and foresight, navigating through a landscape punctuated by consumer volatility and shifting dynamics following Wajiu’s shocking merging of two of China’s biggest wine importers – Torres China and Summergate Fine Wines.

At the helm is CEO Makoto Nagae, who took the challenges “head-on” as he says. Nagae’s emphasis on prioritizing long-term market value over immediate profit gains resonates deeply in an industry grappling with rapid changes.

In the interview, the CEO shares the cornerstone that has propelled the company’s resilience. Nagae also discussed the rise of instant retail and why it is “a new highlight in the wine distribution evolution in China.” Looking to the future of wine, the industry veteran sheds light on how ASC strategically pivoted to engage the next generation of wine consumers and why ASC is bullish on boutique Chinese wine’s growth.

Q: Given the consumer trend in 2023 that started with high enthusiasm but saw a decline over time, what strategies has ASC employed this year to address this situation?

Makoto Nagae: Confronted with the industry’s challenging trend in 2023, ASC is addressing these challenges head-on rather than retreating. We are actively organizing promotional tasting events across major cities nationwide, introducing new brands, and engaging more enthusiastically in public welfare activities to realize our ESG goals. For 2024, we aim to achieve significant performance breakthroughs.

The Chinese wine market still harbors immense potential, especially among the middle class and young consumers. We are confident that the current challenges are temporary and that the future of the Chinese wine market holds numerous opportunities. The focus of consumers is shifting beyond just big brands and price points to include broader concerns like social responsibility and sustainable development. With an optimistic outlook, we will continue to cultivate the Chinese market and seize future opportunities. We also hope ASC’s confidence in the future and our steadfast commitment to the Chinese market will inspire our industry peers.

Q:  Speaking of ESG, last year ASC was awarded ‘2023 Best ESG Company in the China’s Wine Industry’. What significance does this award hold for ASC?

Makoto Nagae: Since its inception, ASC Fine Wines has been deeply committed to Corporate Social Responsibility (CSR), with a focus on supporting education and charitable causes. Particularly since the establishment of the ASC Fine Wine Auction Company in 2009, we’ve consistently donated a portion of our auction proceeds to the Shanghai Charity Foundation, thus creating the “ASC Charity Fund.” After becoming a part of the Suntory Group in 2010, ASC has broadened its engagement in the ESG area, striving to integrate environmental sustainability into our business practices. A significant portion of the ASC product portfolio reflects the values of sustainable development, aligning with the wider environmental initiatives of the Suntory Group. ASC Fine Wines is honored to receive this prestigious award, further solidifying our responsible and socially aware leadership position within China’s wine industry.

Q: Over the past year, there have been several instances of foreign-invested wine companies in China being merged and acquired. What impact has this had on the competitive landscape, and what is ASC’s stance?

Makoto Nagae: Amidst the backdrop of mergers and acquisitions of foreign-invested wine companies, we’ve witnessed a transformation in the market’s competitive dynamics. Mergers and restructurings play a crucial role in enhancing company efficiency and fostering industry synergy. The acquisition of ASC by Suntory in 2010 is a fitting example of a successful merger that spurred growth for both ASC and Suntory. However, we emphasize that mergers should pursue long-term market value rather than short-term profits.

ASC and Suntory have always prioritized consumer interests, which we believe is the cornerstone of sustainable industry development. Amidst fierce market competition, we remain committed to enhancing the quality of our products and services, ensuring ASC’s competitive edge.

​

Amidst the backdrop of mergers and acquisitions of foreign-invested wine companies, we’ve witnessed a transformation in the market’s competitive dynamics. Mergers and restructurings play a crucial role in enhancing company efficiency and fostering industry synergy…However, we emphasize that mergers should pursue long-term market value rather than short-term profits.

--Makoto Nagae

​

Q: In recent years, the development of instant O2O retail channels, such as Meituan/Pupumall/Jiuxiaoer, has been rapid. What is your assessment of these channels’ performance?

Makoto Nagae: We view the rise of instant O2O retail channels as a new opportunity in the evolution of the route to market in China’s wine industry. These channels uniquely cater to immediate consumer needs, especially for wines at lower price points, offering a more convenient purchasing experience. Nonetheless, there’s room for improvement in these platforms’ supply chain management and professionalism regarding upstream suppliers. We anticipate these platforms will continue refining their operations to better cater to consumer demands for premium wines.

ASC is rapidly growing in various O2O channels, including Waimai Delivery, Meituan Grocery (Xiaoxiang Supermarket), and Hema, outpacing the overall market growth rate. The inherent compatibility of O2O instant channels with wine, a product with strong FMCG (Fast Moving Consumer Goods) characteristics, presents a promising avenue for wine consumption.

Q: Chilean wine has been a hot topic in recent years. How are the Chilean wine brands represented by ASC performing?

Makoto Nagae: ASC’s portfolio of Chilean wines, focusing on boutique brands, has achieved commendable success in the market with exclusive distribution rights in mainland China for brands such as Caliterra, Lapostolle, Casa Silvia, and so forth. We are committed to a long-term process of brand building, based on each brand’s unique characteristics. Currently, our efforts towards brand cultivation are steadily advancing.

In addition to our exclusive Chilean brands, we’ve seen substantial growth in the open-market Chilean wines. While we have no immediate plans to expand our Chilean portfolio, we are focused on optimizing our existing brands and deepening market penetration to maintain a competitive edge. Through continuous adjustment and improvement, we aim to ensure the robust performance of our Chilean wine brands in the Chinese market.

Q: ASC also represents several Chinese wine brands. What are the latest developments in this area?

Makoto Nagae: We have great confidence in the direction of domestic boutique wines. Over the past few years, we’ve successfully marketed a series of domestic wines and last year we added two new brands to our portfolio including Domaine Muxin from Shangri-la Yunnan and Kanaan Winery in Ningxia, demonstrating our firm belief in the potential of Chinese boutique wines.

The Chinese wine brands taken on by us highlight the unique terroir and diversity of Chinese wine regions. For example, Domaine Muxin, despite its limited production and niche appeal, has garnered high demand in the market due to its quality, terroir, and winemaker’s charisma. We are committed to furthering the development of domestically produced Chinese wines, aiming to elevate the Chinese wine industry on the international stage.

Q: In recent years, ASC has also ventured into targeting younger consumers with products like the sweet wine brand “Coucou Bee.” How is it progressing?

Makoto Nagae: Our efforts to cater to younger consumers, including leveraging the potential of products like Coucou Bee, have been fruitful. Collaborating with KOLs, we’ve conducted targeted promotions on social media, sparking interest in wine among young people. Additionally, we’ve developed related POS materials and launched fashion-forward accessories like scarves and transparent jelly bags, appealing to fashion-conscious female consumers. Coucou Bee’s breakthroughs in both on and off premise accounts, such as introducing these products to popular vendors like Hema and Commune, have been well received by young consumers, earning recognition in the market.

This strategy of targeting younger consumers is not merely an experiment; it reflects our understanding of future wine market trends. We are committed to continually engaging future consumers, particularly the young and those new to wine.

Anchoring the Greater Bay Area’s economic tides, the wine show that had firmly staked its claim in the affluent South China, linking the region’s economic powerhouses, is making a comeback for its much-anticipated second edition.

Wine to Asia, after a successful inaugural edition, is poised to make a grand return from May 9-11, 2024, in Shenzhen. The only international wine and spirits show in Southern China, the trade fair is a strategic collaboration between Veronafiere, the organizer behind Vinitaly and Wine South America, and Shenzhen Pacco Communication.

Together, their goal is to establish Shenzhen as the central hub for wine culture and commerce in China, serving as a gateway to the wider Asian market and capitalizing on the significant economic prospects offered by the Greater Bay Area.

What to Expect from Wine to Asia 2024?

Despite postponements, the 2023 edition attracted over 450 exhibitors from 27 countries and an anticipated 15,000 professional visitors. The upcoming edition promises a grander and more expansive showcase of products and offers.

The 2023 event set a high standard with masterclasses from renowned critics and educators like Ian D’Agata and MS Yang LV. The 2024 show will build on this foundation, offering a plethora of activities including mixology, a natural wine section titled Living Wine, and a special focus on no and low-alcohol beverages. The collaboration with Asia’s Best 50 cocktail bar group, Hope and Sesame, underscores the show’s commitment to diversity and innovation in the wine and spirits industry.

Complementing the main event, the Greater Bay Area Wine Week (GBAWW) will extend the festivities from May 1-11, engaging fine dining restaurants, wine bars, and bistros across the Greater Bay Area, including Hong Kong and Macau. This “show outside the show” format is expected to enhance promotion and education about wine among consumers, leveraging the region’s dynamic hospitality scene.

Why Shenzhen?

Shenzhen’s role as the host city for Wine to Asia 2024 underscores its strategic importance in China’s wine market and broader economic landscape. Ranked among the top cities in China for business and investment, Shenzhen is celebrated for its innovative spirit, skilled workforce, and dynamic startup ecosystem. The city’s economic vitality is supported by major corporations such as Tencent, Huawei, and BYD, making it a magnet for young professionals and affluent consumers.

Ranked among the top cities in China for business and investment, Shenzhen is celebrated for its innovative spirit, skilled workforce, and dynamic startup ecosystem.

Crucial to Shenzhen’s appeal for wine professionals is its booming on-trade market and luxury hotel industry, which have experienced exponential growth. The city’s hospitality sector, including star-rated hotels and luxury accommodations, provides a lucrative platform for wine exporters. With leading hotel groups like Shangri-La, Hyatt, Marriott and Mandarin Oriental expanding their presence, Shenzhen offers a wide array of venues for wine tastings, events, and promotions. These hotels and restaurants prioritize offering high-quality dining experiences, often featuring extensive wine selections that cater to a discerning clientele.

How can wine exporters benefit and leverage Greater Bay Area for growth?

The Greater Bay Area (GBA), encompassing economic powerhouses of Shenzhen, Guangzhou, and Zhuhai, presents unparalleled opportunities for wine exporters looking to penetrate the Chinese market. This region is characterized by its vibrant economy, rapidly growing middle class, and increasing disposable incomes, making it an ideal target for luxury goods, including fine wines.

Shenzhen’s wine market is projected to grow at a compound annual growth rate (CAGR) of 10.1% from 2019 to 2024, according to a IWSR report. The city’s affluent and sophisticated consumer base has shown a keen interest in wine culture and education, leading to a surge in wine-related programs, courses, and certifications. This growing enthusiasm for wine is matched by Shenzhen’s luxury hotel sector, which has seen remarkable growth. Luxury hotels in Shenzhen, such as The Ritz-Carlton, Four Seasons, and St. Regis, are expanding rapidly, offering wine exporters unique opportunities to collaborate on curated wine lists and wine-themed events targeting the city’s affluent residents and visitors.

Guangzhou, another key city in the GBA, has cultivated a rich wine culture over the years. The city’s wine bars, restaurants, and wine-related events draw a sophisticated crowd of enthusiasts and connoisseurs. Guangzhou’s consumers possess a deep appreciation for quality wines, providing a fertile ground for exporters to introduce their products. The city’s vibrant social scene and open-minded consumer base make it an attractive market for launching new and premium wines.

Adjacent to Macau, Zhuhai benefits from the spillover effects of the region’s booming tourism industry. The city’s proximity to Macau, a major tourist destination, increases the demand for premium wines, offering exporters a unique angle to cater to both domestic and international tourists. Zhuhai’s growing hospitality sector, coupled with its rising wine culture, positions it as an emerging market for wine sales and promotions.

Wine to Asia has specifically chosen Shenzhen for its strategic position and has built an extensive network of wine professionals from these 3 cities to fully leverage and develop the tremendous opportunities that exist in this mature economic cluster of China.

What About Visa?

A notable enhancement to the Wine to Asia 2024 experience this year is the significantly improved visa situation for international travelers and wine exporters.

International winemakers and industry professionals can benefit from the 144-hour (6-day) visa-free transit policy available in Shenzhen and other designated cities in China. This policy is particularly advantageous for those planning a multi-city tour. For instance, if a winemaker intends to attend Wine to Asia in Shenzhen from May 9-11 and then proceed to RAW Tokyo from May 12-13, they would not require a separate visa for their stay in China.

Additionally, winemakers from seven European Union countries, including Germany, France, Italy, Spain, and the Netherlands, can enjoy visa-free entry to China, simplifying the process for some of the world’s most renowned wine producers to showcase their offerings in Shenzhen.

The release of a new vintage of Sassicaia is quite an event in the fine wine world, but the approach from the Incisa della Rocchetta family eschews hype and fanfare in favour of self-assured understatement. Richard Woodard reports.

The first chance to taste a new vintage of Sassicaia is a pretty big deal, but there’s a strong argument to say that this isn’t even the hottest ticket of the day for wine lovers in London… at the same moment, in the offices of Corney & Barrow across town, the trade is tasting the frost-hit 2021s from a small Burgundy estate by the name of Domaine de la Romanée-Conti.

Then again, you sense that the Incisa della Rocchetta family, owners of Sassicaia estate Tenuta San Guido, don’t mind ceding the spotlight to the most famous name in fine wine. Indeed, this down-to-earth sense of understatement is a key part of the estate’s charm.

“People are drawn to San Guido, the history, the type of people we are,” says Priscilla Incisa della Rocchetta, head of external relations and daughter of San Guido president Marquis Nicolò Incisa della Rocchetta. She describes her father as “shy, a man of few words, but always to the point”, adding: “Fortunately, myself and my cousins [there are five in total] are all quite similar, so we are a nice group.

“People ask all the time: ‘How did you build your brand like this?’ but there’s no formula, it just happens. We stay with our feet on the ground.”

Perhaps it helps that, in stark contrast to the monoculture of the Côte de Nuits, wine is only a small part of the Tenuta San Guido story. This vast Bolgheri estate of 2,500 hectares encompasses a large forest, olive trees, arable crops, a world-renowned horse stud and the Padule di Bolgheri nature reserve and wetland. Vines occupy only 4% of the total acreage.

To a wine lover, Tenuta San Guido means Sassicaia, but horseracing enthusiasts will associate the place with Ribot, bred by the San Guido stud and one of the greatest horses of the 20th century – unbeaten in 16 races in the mid-1950s, including two consecutive Prix de l’Arc the Triomphes and one King George VI and Queen Elizabeth Stakes.

Horses and farming were the twin passions of Mario Incisa della Rocchetta, father of Nicolò and grandfather of Priscilla, when he moved to San Guido after the Second World War, having married Clarice della Gherardesca in 1930. Wine was perhaps not quite an afterthought, but it was only a small part of the picture, and one that Mario Incisa approached with some caution.

“The first wine was made from a one-hectare parcel of vines, planted on top of a hill, facing south-east,” says Priscilla. “At the time, they were not sure if the winds from the sea would be good or bad for the grapes. The vines were south-east-facing for that reason.”

Perhaps the Sangioveses of inland Tuscany would have been the obvious vinous inspiration here, but the gravelly soils put Mario Incisa in mind of the Cabernet Sauvignons of Graves, which he adored. Sassicaia takes its name from this stony ground.

‘Our house wine’

Sassicaia is also famous for not being famous, and for decades – “It was really our house wine,” as Priscilla puts it. Instead it was a wine experiment tested only on family and friends until 1971, and the commercial release of the 1968 vintage.

Since then, the changes have been minimal. As Sassicaia’s star has risen, what was once essentially a one-man operation under the legendary Giacomo Tachis has evolved into a team approach, spearheaded since 2009 by general manager and winemaker Carlo Paoli.

Meanwhile, Sassicaia remains a Cabernet Sauvignon-dominant wine alongside Cabernet Franc (typically 85%/15%; the DOC stipulates at least 80% Cab Sauvignon). Cabernet/Merlot blend Guidalberto was added in 2000; Cabernet/Sangiovese blend Le Difese in 2002.

Newly-released Le Difese 2022 is, in Priscilla’s words, “the first step into the Tenuta San Guido world”, originally a Cabernet-dominated blend but, since the hot year of 2020, 55% Sangiovese, sourced from Chianti and Chianti Rufina (there’s not much Sangiovese in Bolgheri).

Since the change to the blend, the time in oak has been cut from 8-10 months to 4-6 months, with no new wood, making for a wine with immediate appeal. “It can age for five, six, 10 years, but it’s not the purpose,” explains Priscilla. “It’s a wine to be enjoyed when it’s youthful.”

The same can’t be said of Sassicaia 2021. Even after double-decanting an hour-and-a-half before tasting, it’s still tight-knit and needs plenty of coaxing out of the glass – but then it was only bottled in January.

 

The precision, freshness, plushly sweet fruit and backbone are apparent, and denote a “classic” – in other words, not too hot – year. “It’s a bit similar to the 2019 vintage in the way that we had at the end very favourable weather conditions,” says Priscilla, highlighting the gentle rain at the close of the growing season that lends the wine an extra dimension of freshness.

Priscilla likens the year to 2016, 2011 and 1998 – all tasted alongside 2021 during the release event – although variations are also apparent, from 2016’s magnitude and balance to the greater warmth and evolution of 2011 (even in magnum), and the beautiful, lifted, slightly leafy character of 1998.

The blockbuster 2015 was famously Wine Spectator’s Wine of the Year in 2018, but time has seen 2016 – a fresher, more classic year – emerge as arguably an even greater vintage.

“It is very much about elegance and balance,” says Priscilla of Sassicaia 2021, and the other vintages tasted. “We like this style, which is not so much about body. These wines are all good representatives of what we want to convey as a style. We have many different styles in Bolgheri. You have this, and you have that, and the consumer can make their choice.”

To which she might have added: “And that’s fine.” There’s a feeling of constancy and consistency about Sassicaia – a sense of a wine that, more than 50 years after that first commercial release, is secure in its own identity, doesn’t go chasing the latest fashion, and is content, on occasion, to concede the limelight to others.

The wines of Tenuta San Guido, including Sassicaia 2021 and Le Difese 2022, are represented in the UK by Armit Wines

Following our conversation with Cantrip’s Adam Terry, db speaks to Cann’s Jake Bullock about the future of THC drinks and if alcohol’s centuries-old monopoly on intoxicating beverages could be permanently disrupted. James Evison reports.

Sitting in an office in London, it can be extremely hard to see a future outside of alcohol. Surrounding the building are a number of pubs and restaurants, all of which sell a fine selection of beers, wines and spirits. In the UK, the alcohol industry is worth more than £45bn annually. In the US, it is worth US$204bn. Imagining its demise would appear unthinkable, and indeed that seems highly unlikely.

But the future is coming down the road, and young consumers have a bigger choice in drinks than ever before. Just as smoking was once a mainstream habit, some disruptors believe that alcohol could follow suit. At the beginning of the 1970s, almost half of all adults smoked. Now it is 12%, according to the Office for National Statistics.

It may seem odd for the drinks business to talk of such an event, but equally it is important to be aware of consumer changes. Indeed, going back to smoking, a lot of the shift has gone to vaping, which is now worth more than £1bn to the UK economy alone.

One big entrant to the THC beverage market is Cann, who alongside Cantrip features on Total Wine’s trial of THC drinks across Minnesota stores.

db caught up with its co-founder and CEO Jake Bullock to find out more.

Q: Could you tell me a bit about Cann’s growth, and your future plans in 2024?

A: Cann launched in Venice Beach, California after my friend and co-founder, Luke Anderson, and I were fed up with multiple day alcohol hangovers and next day regrets.

We have both made it through alcohol-fuelled corporate America and business school programs (Luke at Harvard and me Stanford), and were frustrated by alcohol’s hold over our social culture given it was one of the worst things we consistently did to our bodies.

We grew the brand from the West Side of LA, across the state of California and then across the United States to become (one of the top) THC-infused beverages in the country.

We expect to be profitable in 2024, and will bring Canns into the hands of more drinkers in liquor stores, bars, restaurants, and more.

Q: There are obviously various challenges across different areas/states of the US when it comes to selling THC-infused drinks. Could you briefly outline some of these challenges, and how you have been overcoming them as a producer?

A: Our number one challenge in selling is many states require us to sell into dispensaries, even though the folks that want our drinks are looking for them alongside alcohol.

This has improved over time as states like Minnesota and Connecticut allow our products to be sold in liquor stores and restaurants where consumers are deciding whether to drink booze or not.

The second challenge is educating consumers on how many they can have and what they should expect to feel. Folks are still nervous about THC and want to be in control. Microdosed products, like Cann, allow drinkers to feel mild effects.

Q: Do you think the criticism of THC-infused drinks is fair and proportionate, especially compared to alcohol, and do you see a shift in consumer perception to such beverages in recent years?

A: Over 80% of adults are looking to drink less booze, and as a result people are consuming THC in order to take the edge off without taking them over the edge.

Young people, especially, are drinking alcohol at significantly lower rates than previous generations. We expect that in 25 years people will likely view drinking alcohol the way we view smoking cigarettes today.

THC is not a health supplement and we do not make any health claims on our products. That said, we can sleep well at night knowing that no one will die of an overdose of THC, while folks very sadly die every day from alcohol overdoses.

Q: Are there any studies/reports that you can cite around safety and use which contradict those who may push a more negative narrative around the health aspects of THC drinks? More broadly, do you think consumers are concerned about the safety or health of THC drinks, or is this not a concern for US consumers?

A: Yes, there is a growing body of research demonstrating how THC is less impairing than alcohol, especially in microdoses of under 5mg THC.

Historically, the federal government only funded science research on the harms of THC and would forbid any studies on the benefits of THC, so we do not have a robust research base to demonstrate the positive wellness effects that millions experience anecdotally in their lives.

Additionally, many studies on the harms of THC are deeply flawed. They often rely on unreliable self-reported survey information and focus on smoking cannabis, which raises its own health and potency concerns. Further, cannabis is often mistaken for the cause of psychological disorders that were present prior to cannabis use where cannabis was used as a first line of defense against symptoms of mental illness.

THC is still an intoxicant – albeit a very mild one – that your body needs to process, so the best approach is to consume it in moderation.

Q: I have noted a lot of commentary on the mg level of THC drinks and you describe your product as microdosing. What is your interpretation of this, and do you think there will be some form of agreement around levels (i.e. like beer at 3.5% ABV to 6 or 7 and wine at 12-15`5 etc)? Also, would it be possible to make an equivalence between, say, 5mg and ‘one unit’ of alcohol, etc? Is a ‘unit’ type approach the best way to cut through to consumers, or do you foresee a different pathway?

A: Yes, the way to think about this is how long it takes the body to metabolize the intoxicant. For example, one standard drink may take an average person about an hour and 15 minutes to metabolize, similarly, it would take about the same time to metabolize 2mg of THC.

We typically equate the feeling or buzz that comes from one of our 2mg THC, 4mg CBD servings to a glass of wine or a beer. This comparison creates an easy and digestible shortcut for consumers who might be novices to cannabis, but interested in trying Cann.

Q: How would you like legislation to progress in the US (and possibly elsewhere)? Do you think THC-infused drinks will follow a similar pathway to alcohol and become a mainstream, legal form of intoxication in the US?

A: I do! And I’m a big advocate for this. Minnesota is the blueprint for how a state should roll out and succeed in safe access to cannabis. Their THC-infused food and drinks are able to be sold in restaurants and liquor stores which has supported normalizing our product category and expanding our reach.

It’s been a pleasure to interact with both vendors and consumers in the state and hear feedback about the product and how it’s impacting the industry for the greater good. I believe other states will follow Minnesota’s lead and THC-infused drinks will not only grow in popularity, but begin to take over its share in many bars and liquor stores.

Q: On that note, do you see a future where THC-infused drinks could start to compete on a direct level with alcohol, perhaps in the same way as vaping and combustible cigarettes?

A: In 2024, I believe beer will complete its journey from the largest alcohol category to the smallest, as canned alternatives like THC-infused drinks and RTD cocktails steal its share.

With the next wave of drinkers coming of age in 2024, Gen-Z will pass up on alcoholic beverages with an enlightened POV on its toxic effects. In fact, Gen-Z will begin to view alcohol the way millennials view smoking tobacco – fewer and fewer do it with a larger number quitting or trying to quit.

Q: Could you offer some insight into the different levels of uptake of THC drinks among different age groups?

A: Frustration with alcohol is universal. Whether you are a Gen Zers, who has decided booze is not a part of your night out on a Friday or a Boomer whose doctor is telling you that drinking less alcohol will help you live longer, folks are uniting behind better social beverage options.

Q: How do you think the drinks giants who have dipped their feet in the water will respond to the rapid growth of products such as Cann? On your various retail deals, are there any other deals that you can tell our readers about or allude to?

A: We are all looking at the same data: the younger you are the less booze you are drinking; everyone is drinking less beer.

The alcohol companies that engage with the THC industry first will be most likely to succeed, and you are seeing this already with Total Wine & More’s entry into the category in Minnesota.

Q: Do you think other retailers – and big multiples/wholesalers – will follow suit and we will see THC-infused drinks across the US in multiple stores?

A: Of course. As public opinion around THC shifts and legislation opens up new markets, large retailers will begin to welcome THC-infused drinks alongside alcohol in liquor stores.

We’ve already seen this happen in Minnesota, one of the more progressive markets, where Cann is now sold in Total Wine stores within the state.

European alcohol consumption has declined in recent years, despite several countries drinking more, according to the World Health Organisation (WHO).

According to Euronews, the new WHO report revealed alcohol consumption across the EU between 2010 and 2020 and noted that alcohol consumption in Europe declined by 0.5 litres, even though increases were also recorded in some countries.

The data outlined how overall alcohol consumption per person aged 15 years and over has dropped by 2.9 litres in the last four decades, falling from 12.7 litres in 1980 to 9.8 litres in 2020, equal to a 23% decrease.

In fact, a significant decrease was seen between 1980 (12.7 litres) and 2000 (10.5 litres) but, according to the findings, this slowed in the following two decades.

Alcohol consumption in Europe, which covers 53 countries including Russia and surrounding countries, fell from 12 litres in 2000 to 9.5 litres in 2020, corresponding to 2.5 litres decrease (21%).

Despite this drop, the WHO has pointed out that Europe still has the highest level of alcohol consumption per person in the world.

The research showed that in 2020, annual alcohol consumption varied from 1.2 litres in Turkey to 12.1 litres in Latvia among 36 European countries including the EU, the UK, the European Free Trade Association (EFTA) and EU candidate countries.

Additionally, Germany had the highest amount of alcohol consumption (10.6 litres), followed by France (10.4 litres), Spain (7.8 litres) and Italy (7.7 litres). Despite no longer being in the EU, the UK’s alcohol consumption stood at 9.7 litres.

According to the data, between 2010 and 2020, alcohol consumption fell in 25 countries but increased in 11 countries. Ireland and Lithuania recorded the highest decline in alcohol consumption in this period. It dropped by 2.1 litres in both countries, closely followed by Spain and Greece (both 2 litres).

Similarly following this trend, European reports detailing the WHO data showed that the Netherlands, France, Cyprus and Finland also recorded above 1.5 litres declines. The amount of decrease was also between one litre and 1.5 litres in Serbia, Belgium, Croatia, Denmark, Switzerland and Germany.

According to the WHO, the highest increase was seen in Latvia where alcohol consumption rose by 2.3 litres and noted the highest rise in percentage change at 23.5%.

Other countries that showed substantial increases included Bulgaria (1.4 litres), Malta (1.1 litres), Romania and Poland (both 1 litres). The rise was above 0.5 litres in Norway, Italy and Iceland.

Greece displayed the highest decrease by 24.1%, followed by the Netherlands (20.9%), Spain (20.4%) and Turkey (20%). The decline rate was also over 15% in Ireland, Serbia, Lithuania, Finland, France and Cyprus.

French wine continues to dominate in China, but producers from Spain ask whether there is space for another of the European winemaking giants to make it big in the People’s Republic. Eloise Feilden finds out more.

“Simply because a wine is French, it sounds better to a Chinese consumer,” Xu Julian, head of the Alilian winery, the only Chinese-run winegrower in Spain, told Chinese state news agency Xinhua in an interview last week.

Located in Ribera del Duero, the Alilian winery was set up by Xu’s father, and Xu is now oenologist and manager.

He told the Chinese state news outlet that the image of Spanish wine as “cheap and low quality” is changing in China. “There are already a lot of Chinese people investing in vineyards and wineries, and that will continue in the future because Spanish wine is on the rise and is growing, and especially in quality regions like Rioja and Ribera del Duero.”

Matteo d’Imporzano, Europe & Asia sales director at Spanish wine producer Raventós Codorníu has observed a notable growth in demand for the company’s wine brands among Chinese consumers.

Raventós Codorníu’s brands span many of the country’s regions and wine styles, including Cava brand Codorníu, Bodegas Bilbaínas from Rioja, Scala Dei in Priorat, Legaris in Ribera del Duero and Raimat in Costers del Segre.

d’Imporzano tells the drinks business that demand in China has demonstrated substantial potential for Raventós Codorníu, the oldest winegrowing business in Spain, outpacing growth in other markets in Asia.

A rapidly expanding middle class, changing drinking habits, an e-commerce boom as well as a rise in wine tourism are driving demand, he argues.

“China stands out as one of the largest and fastest-growing global wine markets,” d’Imporzano adds. “While domestic wines gain recognition, there’s a strong preference for imported wines.”

He continues: “Compared to other Asian markets, the wine market in China stands out as dynamic and promising due to a combination of these factors. While other Asian markets also experience growth, the scale and pace of expansion in China are notable, offering significant opportunities for wine producers.”

Downward Curve

However, the value and volume of Spanish still wine consumption in China is falling at a significant rate, according to IWSR, with a volume CAGR down 16% over the period 2017-2022, and value down 12% over the same period.

Things were looking up in 2021 for Spanish wine in the market, with value and volume up 29% and 21% on 2021 figures respectively. But the tide changed for the worse again in 2022, with year-on-year value down 32% and volume down 34%.

But d’Imporzano remains positive about Spanish wine’s potential in China. He argues that affordability makes Spanish brands attractive, “especially in comparison to other European wines”, likely a reference to France.

“Additionally, Spain’s commitment to wine tourism aligns with the Chinese interest in experiential consumption. The long history and tradition of Spanish wineries like Codorníu add to the allure, as Chinese consumers value heritage and tradition.”

Raventós Codorníu continues to develop its Chinese audience through marketing research, digital marketing, influencers collaborations, education and tasting events, adaptation to Chinese market, trade shows and exhibitions, promotional campaigns, labelling and information, and building relationships with distributors and importers through wine dinners and tastings.

After a boom year in 2022, Champagne shipments fell by more than 27 million bottles to slip just below a symbolic 300m total in 2023 – but why?

Champagne shipments fell from 326m bottles in 2022 to almost 299m last year

That was the question I put to several of the leading producers in Champagne during five days in the region after news surfaced that shipments for 2023 had totalled 298.7m, representing an 8.2% decline compared to 2022, when the year-end figure was 326m.

While the causes are myriad, three key reasons were repeatedly cited, from inflation, to overstocking and falling consumer confidence, which I’ve looked at in more detail below.

Initially it should be stated that while Champagne has shrunk in size, the drop has almost entirely been in terms of volume, with the global market for this famous fizz remaining close to its peak point in terms of turnover.

As the Champenois are at pains to point out, although the region suffered a drop in the number of bottles shipped, the value of those shipments was similar to the record set in 2022, with Comité Champagne co-president David Chatillon telling db that turnover has been almost stable, mentioning a decline of around 1.5% to €6.2bn in 2023 (from the previous year’s peak of €6.3 billion).

Nevertheless, when it comes to volumes, the drop was marked, and, even though all the major players in Champagne told db that they were expecting a decline after 2022’s bumper figure, many expressed disappointment that the total should have fallen below 300m bottles.

Indeed, when yields were set in July last year, it was expected that Champagne would ship above 310m bottles by the end of 2023, with db reporting at that time a forecasted figure of 314m for the year-end, following news that shipments were down around 4% for the first six months of 2023 versus the same period in 2022.

However, there was a sharp decline in demand for Champagne from the worldwide trade in the final few months of 2023, particularly November, as customers chose to run down stocks rather than ship more fizz from the sparkling wine appellation.

Signs of a consumer-slowdown in Champagne consumption were evident in the rising intensity of price promotions in the run up to Christmas – even among leading grandes marques – as we identified on 1 December in UK retailers.

As Champagne Joseph Perrier director Benjamin Fourmon told db last week, “We kept expecting a correction after the boom in demand from 2021, but then it happened so quickly; we didn’t expect such a violent stop in sales, and that’s why some of the big groups quickly adopted a strategy of promotions to protect the volumes.”

One key cause of the Champagne slowdown is undoubtedly inflation, which has affected the cost of all goods, including Champagne, which has become significantly more expensive.

As Champagne Lanson president François Van Aal told db, “all the major houses increased prices in early 2023”, recording “big” rises of between 10-12%, which he stressed, “were necessary because of the cost of grapes, which went up 10% in 2022”.

But it’s not just the price of the raw material that’s risen for the Champenois, with producers also having to face rising interest rates in 2023, from around 0.7% the year before to 3.5 to 4% in 2023, which Van Aal said is “a huge cost because we finance our stocks.”

Other pressures have affected prices too, with the cost of dry goods rising sharply in 2022 due to post-Covid supply pressures and the war in Ukraine, along with increasingly expensive energy – which Van Aal said was 2.5 times higher at Lanson this year – and increasing staff salaries, were went up 5.8% for all Lanson employees in 2023.

In short, he said, “The cost of making Champagne has never been as high,” and, bearing in mind that fact that “Champagne is not an essential product”, as well as one facing stronger competition from other drinks, demand from consumers worldwide has softened.

“People are being more careful what they buy,” he said.

It’s worth adding that 2023 not only saw rising prices of Champagne at a time when consumer spending power was declining, but also a fall-off in the supply of entry-point Champagne to major retailers – the type of labels that sold for sub-€19 in French supermarkets.

Champagne Philipponnat president Charles Philipponnat said that a raft of the cheapest Champagne brands for the domestic market were now retailing for more than €20 a bottle, commenting, “which has had an effect on sales”.

Indeed, Champagne Nicolas Feuillatte CEO Christophe Juarez told db that 2023 had seen the discontinuation of the brand’s base level Brut Sélection and launch of a more premium Grande Réserve, resulting in a 25% decrease in sales volumes for what is France’s best-selling Champagne, with a 40% share of Champagne sales in the country’s retail sector.

“We decided to reboot our strategy in the off-trade and premiumise our offer, which meant a 15-20% increase in our price position, as we moved from the bracket of less than €19 a bottle to €24,” Juarez recorded.

Similarly, Stanislas Thienot, who is the managing director of Arvitis – which owns a number of marques, including Canard-Duchêne – told db that his group’s volumes were down by “almost 20%” in 2023 following a decision to axe an entry-point label in the domestic retail sector.

“We made the decision to stop selling Champagne Marie Stuart in France, where it was only sold in supermarkets and retailed for around €17,” he said, telling db that this move involved losing almost 500,000 bottles in sales.

Explaining the decision, he said, “We prefer to keep our grape sourcing to supply a brand with more value,” before noting that the combination of the rising expense of grapes, interest rates, labour, energy and glass had pushed up the cost of Champagne production by 30-35%.

Champagne Nicolas Feuillatte saw sales fall to 8.6m bottles in 2023, down 27% on 2022’s 11.2m peak, while turnover fell 12% to hit €159m.

Overstocking of Champagne in its major markets has been cited as the second main reason for the decline in shipments worldwide in 2023 – which fell at similar rates in France and export countries last year, with domestic and international customers representing 43% and 57% of the total respectively.

After a rapid rebound in Champagne demand in 2021, followed by booming consumption in 2022, producers in the French sparkling wine region had found themselves struggling to meet the demand, forcing them to restrict supplies to the trade starting around two years ago.

In such a situation, major importers, retailers and customers of Champagne had put in large orders towards the end of 2022, fearful of future scarcity, with shipments to markets such as the US and Australia being especially large at this time.

However, as Van Aal recorded, “A lot of orders were more than were needed, so there was a bit of overstock in January 2023,” which meant fewer and smaller orders in the past year. Exacerbating this trend has been higher interest rates, feeding a desire among trade customers to hold as little Champagne as possible.

The final major cause of declining shipments volumes has been a changing in consumer mindset, with last year’s geopolitical situation hardly proving conducive to clinking glasses of fizz.

Nevertheless, Van Aal believes that it would be wrong to suggest that 2023 was “not a good year” for Champagne, pointing out that shipments for the appellation have ranged between 300m and 330m for the past 20 years, while last year’s turnover is near to the record of €6.3bn set in 2022.

“In terms of value, Champagne is really stable, which is due to price increases, as well as more value in the country mix and the market mix,” he concluded.

Or, in the words of Champagne Taittinger president Vitalie Taittinger, “Our policy is to develop Champagne through value and excellence, and more and more we are achieving that; we sell less but sell better.”