It’s nearly 9,500 kilometers from Beijing to the Napa Valley, the single most prestigious wine region in America. Many American wineries are eager to brand themselves in China, but in spite of over a thousand wineries and more than 400 tasting rooms in the Napa Valley, the region is only beginning to understand they need to draw more Chinese guests to California.
Napa & China
Though the majority of the 3.5 million visitors to Napa in 2016 (the last year numbers were available) were from within the U.S., the largest international group was from China, representing 5.3%, or about 185,000 visitors who stated China as their country of origin. So how is the Napa Valley creating a bridge to the Chinese market? The Cal-China Wine Cultural Exchange (CCWCE), is a nonprofit organization operating in Napa and was created in 2014 with the intent of fostering improved cultural exchange between China and the United States, through wine tourism and education. “The CCWCE’s mission is to help support the wine trade, existing visitor and tourist programs, and enhance educational efforts,” says Dr. Joe Chuang, the Exchange’s founder. Chuang owns a winery in China, near Beijing, and also owns Firefly Vineyards from which he produces 5,000 cases of Napa wine. “Our hope is to use wine as a way to foster friendship and understanding between our two cultures.” he said.
But before the present desire to improve relations it’s important to step back in time. In early California history it was Chinese laborers who built much of the railroads throughout the state, little more than poorly paid and ill-treated workers. Chinatowns were abundant throughout California, and Napa’s Chinatown, home to a little over 300 people, was located in downtown Napa near the Napa River, thriving from the early 1880s to the early 1900s. Aside from San Francisco, every Chinatown is now gone, in some cases one or two original buildings remain, but mostly the entire small communities have vanished. At Schramsberg Vineyards for example, with a history in Napa going back to the 1880s, it was Chinese immigrants who chisel-picked the caves by hand that are now popular with tourists. Therefore it’s fitting and somewhat ironic that their wines are now in Hong Kong and Macau. Of course they were also served for US President Richard Nixon in 1972, when their Blanc de Blancs was used for a “Toast to Peace” with China’s Premier Zhou Enlai.
On the opposite end of the spectrum, Yao Family Wines perfectly represents a new perspective on the China-Napa Experience. Yao Ming is obviously well known in China and America and his winery significantly crosses the bridge between the two countries. “American consumers have been drinking wine longer than people in China have,” Yao tells Fine Wine & Liquors. “So fine wine is newer to us here in China, but we learn quickly. Wine fits well with people here, especially young professionals who want to socialize with friends and enjoy time out together.” Yao Ming’s first vintage was 2009, and he produces about 5,000 cases, though his winery facility is built to produce up to 20,000 cases. They export about 30% of their wine to China, as well as smaller amounts to Macau, Singapore, Dubai and Canada, yet costs play an important role in that deciding where and how to export.
“There is a financial burden placed on exported wine,” says Yao Family Wines winemaker Tom Hindle. Yao Ming’s second label, Napa Crest, is $50 US but 500 RMB in Beijing. The Yao Cabernet Sauvignon runs $150 US and 1,700 RMB. “I think people in China were surprised when we launched our wines, but they know I spent time in the US and discovered new things,” Yao Ming says. “They had questions about how good my wine would be. But the critics have given us very high scores, and now after several years of releases, I think people know we make very high quality wines. So I am happy we have been accepted in both countries,” he says. But Napa still competes with Bordeaux. “Chinese people knew French wines first,” Yao says. “They learned that French wines had a reputation for being the best in the world. My goal was to help introduce Chinese wine drinkers to Napa Valley. There is still room for more education on the quality of Napa Valley wine.”
So it was little surprise that Yao Ming opened his wine tasting room in February 2016 in St. Helena. They have wisely positioned themselves to capture the majority of Chinese tourists who come to Napa. They have begun offering daily dim sum and wine pairings, and both Mandarin and Cantonese are spoken in the tasting room. The tasting room also contains some basketball paraphernalia, commemorating his time in the NBA. They also offer a wine and chocolate pairing with chocolate made locally in Yountville. Fully two-thirds of the visitors to the tasting room are Chinese either from China or Chinese-Americans, and Yao himself will occasionally visit the tasting room.
Other Napa wineries are either competing directly in China, or are repositioning their Napa tasting rooms to welcome the Chinese visitor as well. Duckhorn Vineyards has long been one of Napa Valley’s premier wineries and their wines are in all 50 American states and 22 countries across the globe and have been selling in China since 2004. Their Three Palms Vineyard is well known worldwide. “We are one of the blue chip wineries in Napa,” says Belinda Weber, Director of Digital Trade and Consumer Marketing for Duckhorn Wine Company. “We find the Chinese wine drinker who knows Bordeaux thinks of Napa in the same way,” she says. Their wines are sold primarily in several key cities notably Shanghai, Wuhan, Beijing as well as the city of Jiangshan in Zhejiang province. They are available in both retail stores and restaurants and they distribute their wholesale wines within China and their winery-only offerings are only available at the winery, or via their website, or they can be shipped directly to consumers in China.
At the iconic Robert Mondavi Winery - one of the first stops for many Chinese visitors to Napa - you can find two dedicated wine educators who are available daily and are fluent in both Cantonese and Mandarin. There are Korean-speaking tours as well.
“We are tremendously interested and invested in this market,” says Camille Zanette, International Sales and Marketing Manager for Asia. Though Mondavi has been branded in China for years they have refocused their offerings in Napa. “We are very active on WeChat and even offer a Chinese wine club,” Zanette says. They have also launched a dedicated chef who makes yearly trips through different markets in China for wine paring dinners.
Frank Family Wines are also bridging the gap between Napa and China growing their brand in Asia where their wines are currently distributed in Japan, Thailand, South Korea, Hong Kong and Singapore, with a Chinese distribution goal of 5,000 cases per year in Shanghai and Beijing. Owner Rich Frank’s career in Hollywood (he was formerly President of Paramount Television, and then President of Walt Disney Studios), helps their Chinese distributor to utilize Frank’s media history to help promote the wines.
“We have a warehouse in the free trade zone in Shanghai and can therefore distribute throughout the country including our Chardonnay, Carneros Pinot Noir, Napa Zinfandel, Napa Cabernet, and Rutherford Reserve Cabernet,” says Ed Skupien, VP of California & Asia Sales. Their historic winery was originally built in 1884, but as of now has limited offerings for the Chinese visitor. “We don't yet see enough Mandarin speaking visitors to warrant change in our tasting room, but we're hopeful that our brand's popularity in China will continue to grow, and as it does we will add Chinese speaking staff.”
China Builds a Bridge to Napa
As wine consumption has been escalating in China, Napa has targeted China. But the reverse is also true: Chinese businesses have been targeting Napa Valley. Undoubtedly, purchases and ventures in Chinese interest in Napa wineries will proliferate as trade ties between the U.S. and China increase. (Editor Note: Business and politics are independent but interdependent and interacting with each other. Both China and Napa long for good cooperation and mutual development; however, current politics affects all the business. How do you think about the future between China and Napa in the wine industry? Welcome to share your opinions with Fine Wine and Liquor at info@winemagcn.com. Your opinions may be published in our magazine, website www.winemagcn.com and other social medias.)
In Napa Valley, a variety of Chinese businesses have been exploring, acquiring and doing joint ventures with wineries with the objective of increasing exports of U.S. wines to China and Hong Kong.
In 2014 Quixote Winery in Napa Valley’s Stags Leap District was sold to Le Melange, a Chinese-owned private firm registered in the United States for approximately $29 million US, according to Quixote’s former owner.
In mid 2010 the Chinese-American company Silenus International Group acquired Silenus Vintners and an adjacent parcel of land for $6 million. The property is located in Napa Valley’s Oak Knoll District and includes a 7,000 square foot winery on a four-hectare vineyard. Facilities included a tasting room and ultra-modern equipment with related facilities. The Silenus winery has been making high-quality wine for boutique producers. The winery has a 30,000 case permit. The majority Chinese investor in Silenus International Group is from Henan Province and his Chinese wine company is also working on a winery project in Mainland China.
And 2011, the financial investment firm Goldin Group, and its Chairman Pan Sutong, one of Hong Kong’s wealthiest men, strengthened its focus in the wine industry by acquiring a 16 hectare vineyard in Napa. With the acquisition, Goldin was successful in creating a business for the production, marketing and sale of wines without having to conceive a new brand. The purchase included the property leases, the vineyard improvements and winery equipment and the rights to the 2011 grapes for $40 million ($10 million of that in cash).
It seems for the foreseeable future that Napa and China will continue to support one another through wine and wine tourism. Both places can celebrate that with a toast.
