Morgen McLaughlin, the executive director of the Santa Barbara County Vintners’ Association, had the country described to her by an importer as “the Wild West of wine.”
McLaughlin traveled to Shanghai in mid-November to see first-hand how the Chinese wine market operates.
China, with a population topping 1.3 billion, is the fifth largest market for California wine exports. In 2012, U.S. wine exports to China reached $73.6 million, up more than 18 percent from the previous year. And 90 percent of those bottles came from California.
“We did not pick this market randomly out of a hat,” McLaughlin told the Sun. “We did interview our membership and China was the No. 1 international market that our members had an interest in.”
McLaughlin timed her trip to coincide with the inaugural ProWine China 2013 Trade Fair Nov. 13 through 15 at the Shanghai New International Expo Centre.
A delegation of 60 California wineries, including local brands Melville, Dierberg, Star Lane, Refugio Ranch, Coquelicot, and Pence Ranch, were featured at the sold-out trade show.
Approximately 570 exhibitors from 30 nations showcased their wines for thousands of wine buyers.
Organizers touted it as “the new opportunity to uncork the Chinese wine market.”
McLaughlin described the experience as eye opening and productive.
“There’s been a lot of media coverage about Bordeaux and French wines in China and how there’s a lot of opportunity to sell wine,” she said, “but until you get there, it’s really hard to get a sense of how the market works.”
That’s because the Chinese buy wine for different reasons than Americans.
In China, McLaughlin said, “Wine is all about the image and it’s about gifting wine to friends and colleagues, and it’s less about actual personal consumption. So that was interesting.”
She learned that 80 percent of the wine bought in China is given as gifts.
“Drinking wine is not why they purchase wine. They just want to see the label, and then they buy it, and then they put it in their cellar.”
Having a personal wine cellar full of high-priced red wine increases social status for the wealthy in Shanghai.
“The idea that the Chinese are buying wine for status symbols means they look first and foremost at packaging; packaging in the sense that, ‘does it looks like it’s an expensive bottle of wine?’” McLaughlin said.
“So, traditional labels abound. Most of the wine in the country is French, with Bordeaux being the leading region. Those wines that emulate that classic style do well.”
McLaughlin observed that the big-selling California wines in China were from the Napa Valley: “Opus One was everywhere,” she said.
Another challenge for vintners is teaching the Chinese wine buyer where California is on a map, not to mention Santa Barbara County.
“Being in California, we think we’re at the center of the universe; that everybody knows where California is, but that’s not the case,” McLaughlin said.
“Santa Barbara does not have a point of reference for wine. However, the Chinese love the movie Sideways, so we interjected that in our presentation and then you could see everyone’s eyes light up, like, ‘Oh, Sideways!’”
McLaughlin tapped into the Chinese people’s fascination with American celebrities and Hollywood, and pitched Santa Barbara County to them by explaining that the wine region is just two hours from Los Angeles.
JiaMin Dierberg, Dierberg Winery’s international sales director, traveled with McLaughlin to her hometown of Shanghai.
“To have her as a guide was extremely helpful,” McLaughlin said.
With vineyards in both the Santa Maria Valley and the Santa Rita Hills and a tasting room near Lompoc, Dierberg Winery already sells its wines in China, Hong Kong, and Japan.
Still a bit jet-lagged from her most recent trip, McLaughlin is already anticipating her return to Asia on behalf of local vintners in an effort to build the Santa Barbara County brand.
“I will definitely be going to the Far East at least twice a year,” she said. “Because Hong Kong is hugely different from Shanghai, and both Shanghai and Hong Kong are completely different than Japan, and even the other parts of China are very different from Shanghai.”
There is so much buying potential in these countries, she said it’s worth her traveling 12,000 miles round trip. The vintners’ association pools resources and saves money on marketing by sending one representative.
McLaughlin is planning a gathering of the wine association members to recap her trip, to share what she learned, and to help lay the groundwork for those wineries interested in selling to China.
The vintners’ association hired McLaughlin earlier this year when previous executive director Jim Fiolek retired.
From 2007 to 2013 McLaughlin served as president and CEO of the Finger Lakes Wine Country Tourism Marketing Association in Corning, N.Y. From 1994 to 2006, she co-owned and managed a winery and vineyard, McLaughlin Vineyards, in Connecticut.
It sounds like McLaughlin, who is now in her seventh month on the job in Santa Barbara County, has a lot up her sleeve for 2014.
“I’m enthusiastic about the future. We’ve had to do a lot of foundation building the first six months. The fruits of the labor will be presented at our annual meeting Dec. 12,” she said. “I can’t really reveal until then, because we want to make the announcement first to membership, but there are a number of significant changes instore for next year. All good changes.”
Contact Sun wine and food columnist Wendy Thies Sell at wthies@santamariasun.com.
This article appears in Dec 5-12, 2013.
