{"id":1907,"date":"2012-06-12T08:42:55","date_gmt":"2012-06-12T15:42:55","guid":{"rendered":"http:\/\/plantingseedsblog.cdfa.ca.gov\/wordpress\/?p=1907"},"modified":"2012-06-12T08:42:55","modified_gmt":"2012-06-12T15:42:55","slug":"sacramento-bee-chinese-wine-buyers-visit-lodi","status":"publish","type":"post","link":"https:\/\/plantingseedsblog.cdfa.ca.gov\/wordpress\/index.php\/2012\/06\/12\/sacramento-bee-chinese-wine-buyers-visit-lodi\/","title":{"rendered":"Sacramento Bee-Chinese wine buyers visit Lodi"},"content":{"rendered":"

http:\/\/www.sacbee.com\/2012\/06\/12\/4554935\/lodi-vintners-welcome-chinese.html<\/a><\/p>\n

LODI \u2013 With bottles ready for tasting, a group of Lodi wine producers waited
\nanxiously Friday morning for a delegation of monied business people they hoped
\nto impress. The vintners burst into applause when the group finally arrived,
\nover an hour late.<\/p>\n

These honored guests weren’t Hollywood moguls or Silicon Valley venture
\ncapitalists. They were potential customers and investors from the city of
\nShenyang in northern China, coming to check out Lodi as a potential source of
\naffordable wine to supply China’s rapidly growing market.<\/p>\n

A second delegation from Shanghai is scheduled to visit Lodi today, exploring
\npotential business partnerships with the state’s largest wine grape growing
\nregion. Chinese investors are also eyeing Northern California vineyards.<\/p>\n

The rising middle class in China and other Asian-Pacific countries is fueling
\none of the wine world’s fastest-growing markets. According to the McKinsey
\nGlobal Institute, China is expected to add 235 million consumers by 2020 and
\nwill account for 20 percent of the global luxury market by 2015.<\/p>\n

U.S. wineries exported $62 million in wine to China in 2011, a 42 percent
\nincrease from 2010, according to the Wine Institute, an advocacy group for
\nCalifornia’s $61.5 billion wine industry. Exports to Hong Kong jumped 39 percent
\nin the same period, to $163 million.<\/p>\n

Those numbers \u2013 while small compared with the total market \u2013 have grabbed the
\nattention of Northern California wineries looking for alternatives to the
\ncutthroat competition of U.S. wine sales. California wine makes up 90 percent of
\nU.S. exports.<\/p>\n

“If you structure the deal correctly, it’s both safer and more profitable to
\nsell to China than it is to sell domestically,” said Frank Gayaldo, director of
\ninternational development for the Lodi District Chamber of Commerce and
\norganizer of Friday’s tasting.<\/p>\n

“Imports are eating up roughly 20 percent of our domestic (wine) market, and
\nit’s difficult for small wineries to get good distribution contracts.”<\/p>\n

One Lodi winery at Friday’s tasting already sells more wine in China than in
\nthe United States. Benson Ferry Vineyards has shipped wine to China since 2007,
\nmostly to Beijing. It exported 2,000 cases of pinot grigio and 4,000 cases of
\nmerlot in May.<\/p>\n

“There’s over 80 wineries in Lodi, and we’re just one,” said Wendy Stokes,
\nwho oversees sales and marketing for Benson Ferry. “Right now, China’s an open
\nmarket and we’re looking to expand in all parts.”<\/p>\n

Along with a growing taste for designer clothes and high-end watches, China
\nand other Asian nations are deepening their thirst for wine. At first, Chinese
\nconsumers were interested mostly in elite California brands and highly coveted
\n“first-growth” French wines, such as Chateau Petrus and Chateau Lafite
\nRothschild, which sell for thousands of dollars per bottle. Now, a softening
\nAsian economy has led to more interest in value-friendly California brands, such
\nas those from Lodi.<\/p>\n

“They’re looking at Lodi and even Napa for bottles in the $20 to $30 range
\nthat are tasting good,” said Turino Fuad of VINX International, Inc., a Gold
\nRiver wine brokerage. “As brokers, we continue to educate our partners about
\nwhere wines are coming from. What is Lodi known for? What is Amador know for?
\nChina’s learning the market faster than we think.”<\/p>\n

France still leads other countries for wine exports to China, followed by
\nAustralia and Chile. Market share for the United States remains small, about 5
\npercent, said Rex Zhang of the U.S. Agricultural Trade Office in Shenyang, who
\naccompanied the Chinese delegation Friday.<\/p>\n

“In my area it’s even lower,” Zhang said of Shenyang. “Americans consume
\nabout 80 percent of their total production, and haven’t had to depend on the
\noverseas market that much. Now, they’re seeing big potential in China.”<\/p>\n

Other members of the delegation included Yuan Tuo, a sales manager for
\nShenyang Wine Fairy Tales Trade Co., and representatives from Shenyang Jiatong
\nTrade Co. Along with a morning tasting near downtown Lodi, the delegation toured
\nSorelle Winery on Highway 88, Omega Vineyards & Winery and Oak Ridge
\nWinery.<\/p>\n

“At the beginning we knew California, then we knew Napa and now Lodi,” said
\nDavid Hua of the Dalian Wine Association, who acted as a consultant for the
\ndelegation. “I enjoy (Lodi wines), but they’re a little different. It’s a little
\nsweet, but easy to drink.”<\/p>\n

California wineries are selling more of their product to other Asian
\ncountries as well. U.S. exports to Japan rose 39 percent in 2011, to $105
\nmillion. Sales to Vietnam jumped 266 percent \u2013 to $21 million.<\/p>\n

Exchanges between Lodi wineries and Chinese business delegates started in
\n2008. The Wine Institute has also organized trade missions to China with
\nCalifornia vintners for 12 years, including a California delegation to Hong Kong
\nin May representing 250 wine brands.<\/p>\n

The Wine Institute has targeted China with an ad campaign that joins the
\nwords “Discover California Wines” with images of the Golden Gate Bridge.<\/p>\n

The Chinese aren’t interested in buying only California wine. Increasingly,
\nthey’re also looking to buy the wineries and vineyards themselves.<\/p>\n

The high-end Sloan Estate Winery, which offers some bottles for upward of
\n$600, sold its property to a Hong Kong conglomerate in 2011 for $40 million.
\nAlso last year, Zhang Winery of China purchased Napa’s Frazier Winery out of
\nbankruptcy protection.<\/p>\n

Other countries have also invested in Napa wineries. The Australian Foster’s
\nBrewing Group paid more than $1 billion for Beringer Wine Estates of California
\nin 2000, and Stag’s Leap Wine Cellars sold for $185 million in 2007 to a
\npartnership that included Italian vintner Piero Antinori. Kenzo Tsujimoto, a
\nJapanese video game magnate, invested $100 million for his high-end Kenzo Estate
\nwinery.<\/p>\n

Gayaldo recently met with an investor from Shanghai who was interested in
\npurchasing a Lodi winery.<\/p>\n

“I’ve received a couple of inquiries where companies are looking for a
\nworkhorse winery that can produce ultra-premium wine at medium prices, and
\nnobody can do that better than Lodi,” Gayaldo said.<\/p>\n

Though Friday’s exchange wasn’t specifically for scouting vineyards, Zhang
\nsaid that some Chinese investors are eyeing such investments.<\/p>\n

“Now that the economy in China is slowing down, (business people) don’t want
\ntheir money to depreciate and some want to move their money to other
\nindustries,” said Zhang. “After tasting, they feel the U.S. has very good wine.
\nThey’re really impressed and think, ‘Here is some proper vineyards and maybe I
\ncan invest in that.’ ”<\/p>\n

\u00a9 Copyright The
\nSacramento Bee. All rights reserved.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

http:\/\/www.sacbee.com\/2012\/06\/12\/4554935\/lodi-vintners-welcome-chinese.html LODI \u2013 With bottles ready for tasting, a group of Lodi wine producers waited anxiously Friday morning for a delegation of monied business people they hoped to impress. 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