Major wine companies should not pin their futures on China, warns Krug chief

China is not necessarily the answer

China is not necessarily the answer

Krug boss warns against pinning too much hope on success in China

The wine world needs to let go of its obsession with China, and stop believing that the market can solve all its problems, according to Margareth Henriquez., chief executive of Krug, the top branded Champagne house.

She told that Krug would be channeling its marketing clout into “traditional markets, rather than emerging ones such as China” and sees better immediate growth in the United States which has “massive potential” for branded Champagne.

“China will take some time, certainly for sparkling wine producers and it would be a mistake,  I believe, for the wine world to put too much emphasis on this market,” she stressed.

But the situation in other key Asian markets was more positive, with Henriquez confirming Krug continues to experience good growth in Japan, Malaysia and Taiwan, but off a small base.

Henriquez’s comments are backed up by recent Vinexpo data that shows wine consumption in China decreased slightly in 2013 for the first time in 10 years, down 2.5% compared to 2012.

This is partly due to the Chinese government’s austerity drive, which has had a negative effect on premium wine sales. Red wine also makes up the bulk of Chinese wine imports with the market for sparkling wine relatively small by comparison.

However, brands like Perrier Jouet and Taittinger have reported growth in China. ”It is the responsibility of great Champagne houses to educate new markets to the specificity of Champagne both as a great wine and also a symbol of happiness and celebration. Our position is improving in Asia, both in China and Hong-Kong,” said Dominique Garreta, head of communications for Taittinger.

Henriquez believed the female market was the best hope for Champagne and sparkling wine in as it offered an alternative to the tannins Chinese women can find difficult. “Women, who dislike tannin are potentially the future of Champagne sales in China,” she explained. 

Readers' comments (2)

  • In a recent interview in San Francisco, Henriquez pointed to a decisive shift in the way Krug is communicating by leveraging its rich history and making specifics about its products available via a new smart phone application. By scanning an ID code found on every bottle, the Krug app (available for iphone and Android) delivers details about the wine, history and notes from Chef de Caves Eric Lebel. The company has also introduced music pairings in addition to food pairings and will use the app to build a global community of Krug enthusiasts.

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  • Very insightful article. Clever to recognize the tannin issue for Asian (and Native American) palates. I also like the Krug app music pairings. Will it use music appropriate to specific local cultures?

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