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The cork, a key element for the export of Spanish wine and cava to the USA and China

As part of the "We are unique, #elijocorcho" campaign, the Catalan Institute of Cork (ICSuro), the Spanish cork industry integrated in AECORK plus the complementary support of the companies Oller, Manuel Serra, J.Vigas and Trefinos, and APCOR, has organized the I Wine Export Workshop: 'Challenges and opportunities of wine export: the details are the key to success' to help wine and cava wineries in Spain in the export process to two key markets such as EE. UU and China.

The I Wine Export Workshop, held at the Villa Real hotel in Madrid, featured prominent Spanish wineries from the main Denominations of Origin -Rioja, Ribera del Duero, Vins de Madrid, VT Extremadura or La Manchuela, among others - who attended three keynote lectures given by renowned international professionals under the moderation of Pau Roca, Secretary General of the Spanish Wine Federation (FEV). Mike Veseth, editor of 'The Wine Economist' blog - rated 'World's Best Wine Blog' in 2015 by Gourmand International-, offered a global and current view of the particularities of the wine market in the United States. Rebecca Bleibaum, expert in sensory research and studies on consumer habits, addressed the profile of the American wine consumer and their consumption preferences. Dorian Tang, Educational Director of ASC Fine Wines, the largest wine importer by volume in China -imported 6 million liters of wine in 2016 and distributed more than 1,200 wines from 16 countries-, analyzed the singularities and potential of China as a wine importing country.

The phenomenon of 'premiumisation', a turning point in the USA

The first lecture of the Workshop was given by Mike Veseth, "Anatomy of the US Wine Market", where he noted how attractive and complicated the American market is. The USA was the leading country in wine imports in 2016 (4,186,763), + 3.4% more between 2004/2016, followed by United Kingdom (2,524,394), which suffers a drop of -2.4% in imports between 2004/2016, and China (2,194,981), which is + 45.1% between 2004/2016. “The USA is the leader in wine bottle imports, but there is a big problem with distribution. Each State operates independently, there are 51 different taxes on wine, which makes management difficult. The Spanish wine and cava companies must be prepared to access the American market with guarantees", emphasized Veseth.

Likewise, the speaker placed special emphasis on a new phenomenon that is setting the stage in the US, 'premiumization'. American wine consumers are betting on higher priced wines, references have increased sales in the last year (9 $ – 11.99 $, +4.5%; 12 $ – 14.99 $, +6.5 %; 15 $ – 19.99 $, +9, 6%; 20 $ or more, +8.6%), while lower priced wines are significantly decreasing (0 $ – 2.99 $, +2.9%; 3 $ – 5.99 $, +0.4%, 6 $ – 8.99 $, -4.1%). In the words of Mike Veseth, "the American wine consumer has changed after the economic crisis. Betting on wines with higher prices is a search for the authenticity of the product, and which has been reproduced in other sectors such as chocolate, coffee or even oysters. They demand products where the origin and the elements that make it up, like the natural cork in the case of wines, they provide an added and differential value. And this is precisely the factor that determines the sale and differentiates it from the competition.

The impact of closures on the purchasing decision of the American consumer

Rebecca Bleibaum presented in her presentation "Sensory Consumer Intelligence" an x-ray on the profiles of American wine consumers, who only represent 14% of the total population. Bleibaum presented the main conclusions of an extensive study carried out on five occasions (2004, 2007, 2011, 2013 and 2017) to find out the attitude of the American wine consumer about the different wine closures and their impact on the interests of purchase and the perception of wine quality. With reference to the American population as a whole, price is the most important factor in their purchase decision (38%), followed by type of closure (31%), wine origin (24%) and variety (7 %).

Within the price variable, the ranges of 12 $ – 15.99 $, 8 $ – 11.99 and 16 $ – 19.99 $ are the most demanded, and the natural cork, the main reference by far. In terms of origin, the regions of California and France are the most requested, while Red Blend, Cabernet Sauvignon, Bordeaux and Rioja are the most desired variables.

In the segment of wine consumers from 16 $ to 30 $ or more, the type of closure is the most decisive factor in the purchase decision (38%), with the natural cork stopper being the most popular option; followed by price (30%), origin (29%) and variety (3%). "The results clearly show how the closure of wine influences American consumers, and indicate that the natural cork stopper is the most demanded reference in the different price ranges", highlights Bleibaum.

Knowing more about the wine consumption habits of Americans, Bleibaum explained how appropriate wines are for each occasion depending on the closures. Close to the 100% of the Americans, he considers that wines with natural cork are the most suitable for dinners, special celebrations or gifts, far from artificial corks. Likewise, the 92% from American consumers associates high quality wines with cork, while it links artificial tapamientos with wines of low or medium quality. Regarding preference, the most popular closure option is the natural cork stopper (59%), followed by a 26% that has no preference, and only a 14% opting for artificial closures. Bleibaum concluded: "There is no doubt that the cork is synonymous with quality wine for Americans, and, moreover, of a much higher quality than wines closed with artificial corks."

Quality, cultural adaptation and online presence, main routes for export to China

The analysis of the particularities of the Chinese market and the profile of its wine consumer were the main points of the presentation "Taste of China", the last of the Workshop organized by Iniciativa CORK. Dorian Tang, Educational Director of ASC Fine Wines, a leading wine importer in China, explained that in terms of market share of alcoholic beverages, wine import accounts for 0.8% in China, but with a growth of +22.2 % between 2015 and 2016. Local beer registers the largest share of the market (70.8%), despite reflecting a decline of -4.4% in the last year, followed by local distillates (17, 1%) and local wine (10,1%), mainly.

Regarding wine imports by market and in terms of volume, France accounts for 39.9%, followed by Australia (17.4%), Spain (13.7%), Chile (12.6%) , Italy (5.4%), USA (1.9%), South Africa (1.9%), Portugal (1.4%), Argentina (1.1%), Germany (0.8% ) and New Zealand (0.5%). However, the unit value per liter and dollar differs significantly, with New Zealand taking first place (9.49 $), followed by the USA (6.26 $), Australia. (6.10 $), France (4.65 $), Italy (4.40 $), Argentina (4.19 $), Germany (4.17 $), Chile (3.61 $), South Africa (3 , 51 $), Portugal (2.70 $) and Spain (2.02 $). "The agreement established between China and the countries of Oceania such as Australia and New Zealand, has allowed the price of wine to be higher. On the other hand, wines from European countries have lower prices because the taxes to be paid are high," explained Tang.

In this context, Dorian Tang introduced two business opportunities for the export of Spanish wines to China: consumer trends and new sales channels.

There is 48 million Chinese who consume imported wines, qualified as urbanites and upper middle class, and who, in turn, are also adopting the phenomenon of lapremiumización. Within your preferences, 96.8% of Chinese consumers consider cork to be beneficial for wine quality and 85.3% prefer wines closed with natural cork. Likewise, the cork is associated with high-quality wines and the ritual of uncorking is linked to high-priced wines and gifts. Significant is also the fact that 95 of the 100 best-selling wines in China in 2016 were closed with natural cork -65% Chinese wines and 35% imported wines-.

Another factor to consider when exporting wine to China is numerology and animal symbolism, which are very relevant in their culture. Dorian Tang concluded "if the natural cork stopper is analytically proven of its great relevance to the Chinese wine consumer, the employment of certain numbers such as 8, which means luck in China, or 9, power, or animals , acquire special relevance and are aspects to be taken into account when drawing up the label.

The second route for the export of Spanish wine to China is the large weight of e-commerce: 48% of Chinese consumers of imported wine have bought wine online in the last 6 months. Among the main wine import platforms, local companies TMALL -Alibaba's marketplace- and stand out. Likewise, the strong penetration of mobile phones in Chinese society places platforms such as WeChat, with close to a billion Chinese users and which includes a large number of services, as a key tool for making yourself known and for the distribution and sale of wine to the Asian giant.

In light of the success of the I Wine Export Workshop and the great response from professionals in both the cava and wine sectors and from the industry itself, Joan Puig, President of AECORK and spokesperson for the Cork Spain Initiative, affirms : ” From the cork sector we have the clear objective of collaborating together with Spanish wine and cava cellars to position our products in the main international markets.

For this, the cork industry works every day to be among the most advanced in the country due to its great investment in R + D + I and the implementation of leading technologies that make the natural cork stopper a unique and contrasted closure for wines and cavas".