In recent years, the Australian wine industry has encountered unprecedented hurdles, particularly with the imposition of tariffs by China—a once-thriving market representing a significant 40% of total exports. This sudden shift dealt a severe blow, resulting in a substantial decline in market value from an impressive $1.28 billion to a mere $8.1 million but recent developments have seen a decision to eliminate duties as high as 218% on Australian wine exports to China. This decision comes as a relief, especially considering that China is the largest overseas market for Australian wineries, valued at over 1 billion Australian dollars ($653 million). In this article, we will delve into how Australian wineries can strategically prepare for export to China and position themselves for success in this ever-evolving market landscape.
How to Prepare Your Wine Business for Export
Market Research and Analysis
In terms of local competition, the Chinese wine market has witnessed a remarkable growth with 2021 accounting for CNY 268.6 billion (approximately $42 billion). It is also good to note that historically, wine was considered a symbol of social status and luxury in China. There is also an increasing number of Chinese who view grape wine as a “healthy drink” and being incorporated into their daily consumption.
Wine Consumers
Chinese wine consumers predominantly comprise urban, educated, and affluent individuals who exhibit a global perspective in their lifestyle preferences, including their wine consumption habits. The age bracket with the highest wine consumption rates spans from 30 to 49 years old, with a relatively even distribution between genders, though there is a slight tendency towards male consumers. It is important to note that when targeting a certain demographic, the right packaging needs to be adjusted to attract the right consumer.
Adopt Your Product Offering
Did you know that red wine remains the preferred choice among different wine types in China, constituting the majority of wine consumed with a gradual increase in the popularity of other categories such as white wine and sparkling wine? While sweet wine is less favoured compared to dry options, it maintains a steady consumer base. This indicates that wine preferences in China exhibit a dynamic pattern and as a business, it is important to consider different marketing, branding and packaging strategies to capture the right demographic for each product category.
Packaging, Logistics and Shipping
Security is at the forefront of any exporter’s concern as this requires shipping fragile items to another country but it does not mean it can’t provide a banding opportunity. Consider these type packaging options that are not only secure but highly customisable to target your demographic:
- Rigid Boxes
Usually available in foldable options with magnetic closure and in single or double packs that offer durability without compromising on elegance, these are engineered to withstand the rigours of transportation. Harness the power of customisation by working with your packaging supplier to determine the right size, colour, style, and labels, and even utilise special paper stocks made from grape waste, to drive your sustainability story forward.
- Honeycomb Sleeve for Bottles
Combining strength and flexibility, these sleeves provide a snug and secure fit around each bottle, minimising the risk of breakage or leakage during handling and transportation without using unnecessary plastic waste.
- Mailer Boxes
This type of packaging features secure closures and cushioning materials that could provide optimal protection against bumps, jostles, and other hazards encountered during shipping. Customisation is also key to driving your branding to the global stage – and combine that with the right packaging to protect your goods, you’ll be providing a better customer experience!
Highlight Unique Selling Points
Don’t be afraid to show off any organic and sustainable certifications! Provide flavour profiles, introduce grape varieties into your products and utilise the advantage of custom label packaging to communicate this USP.
Distribution
Online Platforms: In China’s thriving e-commerce landscape, consider tapping into popular platforms like Tmall, JD.com, or Pinduoduo to showcase your wines to a vast audience and benefit from their extensive reach. Additionally, leverage social commerce through platforms like WeChat and Weibo to engage directly with consumers, build a loyal following, and promote your wines effectively.
Retail Stores: Forge partnerships with specialty wine shops known for catering to wine enthusiasts, leveraging their knowledgeable staff to educate consumers about your products. Also, explore collaborations with supermarkets and hypermarkets, offering visibility and accessibility to a wide consumer base.
Restaurants and Bars: Target high-end dining establishments to feature your premium wines, enhancing the dining experience through wine pairing menus. Organise tasting events or promotions to increase exposure.
Regulations & Labelling Requirements
It’s essential to comprehend the regulatory requirements, including mandatory GACC production facility self-registration and specific labelling mandates. For comprehensive guidance on exporting to China, it’s advisable to download the latest China Export Market Guide, which provides detailed information and insights to facilitate successful market entry. Consider mandatory GACC production facility self-registration and labelling requirements to fully equip your business.
Support Programs
Take advantage of local government grants to redesign your packaging and work with local manufacturers to lessen carbon footprint! The State Government of Western Australia is set to bolster its renowned wineries with a $500,000 package which would allow Australian wineries a competitive edge against other exporters.
Wrapping It Up
Exporting Australian wines to China presents a lucrative opportunity for wineries seeking to expand their global footprint and tap into the growing demand for premium wine products. By understanding the unique characteristics of the Chinese market, building strong relationships, adapting to cultural differences, navigating regulatory requirements, investing in the right packaging and branding, and maintaining quality and consistency, Australian wineries can position themselves for success and thrive in this dynamic and competitive landscape.
Contact Myerton Packaging for closed-loop wine solutions that are tailored for export.
