CHANGLI, HEBEI - The thunder is crackling outside my window as I write this, from a beautiful hotel suite at the Chateau Bodega Langes in Hebei Province.  For some reason (perhaps the story meetings were cancelled this month) this is the second wine-based episode we've shot in the last four weeks.  The first was at a beautiful winery called Chateau Junding near Yantai in Shandong Province; many months ago, we did two other wine epsidoes:  one as part of a Valentine's Day show, while the other was a tour of the Dyansty Winery in Tianjin. 

I'm not complaining: getting tours of wineries, staying in beautiful chateaus, eating from lavish buffets and drinking free wine is far better than a regular nine-to-fiver. 

There's no doubt that the wine industry (like basically all industries) is growing exponentially in China.  Chateau Junding offers a compete wine tour, wine tasting lounge, and a wine museum.  It is set in Penglai, which is about an hour's drive from Yantai International Airport (and yes, Yantai receives international flights).  The decks offer stunning vistas of the nearby lake and vineyards, and the service was top-notch.

While people are very friendly here at Bodega Langes, I've found it to be a far cry from the lavish setting in Yantai (perhaps, no matter what Bodega Langes does, the dusty mountains of Hebei can't compete with a seaside scenery in Shandong).  I spoke to the head sommalier here earlier today and asked if they were targeting foreign visitors.  "Yes," he said.  "But you have no English signs?  And no western food?" I retorted.  Perhaps I wouldn't have been normally so blunt in my assessment, but I remain slightly jet-lagged from a recent trip overseas and the day was dragging.  Still, my point stands.

Perhaps, though, I was a little off base:  It's not that there are no foreign visitors here, it's just that there aren't any visitors here.  Nor were there very many in Yantai.  Nor did I find any at the Dynasty Winery.  So what's happening?

According to Resarch and Markets, China's grape wine industry appears to be taking off. The following is from their report from 2005-06:

In 2005, Chinas total grape wine output reached 434.3 million liters, up by 25.4% over the year 2004, profits amounted to RMB 1.256 billion, up by 58.8%, and that of taxes paid reached RMB 1.207 billion, up by 30.2%. On the other hand, the sharp increase of grape wine imports caused big pressure on the domestic grape wine industry, however, as the gap between domestic manufacturers and foreign manufacturers with regard to competitiveness has shrunk, the domestic grape wine industry survives and develops quickly.

The Ministry of Commerce forecast, domestic grape wine output will increase with a YoY growth rate of 15% before 2010, and the figure will reach about 800,000 tons by 2010. Grape wine imports will also increase constantly, with prices falling sharply until equal to the price of home-made grape wines. Currently, China’s grape wine market has been monopolized by Great Wall, Changyu and Dynasty by and large. The market share of the three giants are as high as 52%, the asset shares reached 38% of the industry, and the sales revenue even amount to 56% of the total. Each of them has their own advantageous market. In the important grape wine consumption market of South China, their market share exceeded 50% in total.

One other telling part of this report was that most of the profits from China's wine industry come from high-end wines.  We've written on this website before about China's booming luxury industry, and high-end wines are a natural fit for those Chinese seeking a high-end lifestyle.  Bodega Langes is clearly targeting this demographic, as their most inexpensive wine is a staggering RMB 288.  Perhaps the reputation of China's wines precede them, but that is a lot to pay for a wine from a country known for vinegar-like wines and food quality problems (and to be fair, Chinese wines have made great strides in recent years; the reputation does, however, linger).  Going one step further, the sommalier here told me this afternoon that the Bodega Langes winery is "the best winery in the world."

(Completely off topic... I continue to be surprised (perhaps I shouldn't be) at the political astuteness of my staff.  Even as we shoot a brief wine tasting inside the winery, the cameraman (not a position traditionally tasked with political correctness) notices a faint black-and-white photo of former President Jiang Zemin in the background.  He pulled it down to the grateful and relieved 'thank you' of my producer.  Having ol' Jiang in the shot just isn't appropriate, I'm told, when he's no longer the man in charge.)

While the wine industry growth expectations in China are staggering, I would venture to say that, in reality, wine drinking is a very small, niche market in China.  There's no doubt it is set to grow exponentially, and perhaps someday these chateaus will be fully booked.  There's also no doubting the dedication and love of the wine industry from the sommaliers and staffers at these wineries.  But I would submit it will take years before the full appreciation of wine trickles down to the average Chinese family.  As I said, I've visited two beautiful chateaus and a third winery - one of the big three - and haven't seen a soul.  I don't exaggerate... there is nobody else staying in this entire chateau.  One wonders how they pay their bills.

Part of the reason I get so discouraged at things like the melamine milk scandal is because China can accomplish so much if it chooses -- it doesn't need to cheat.  This is a country of achievers, as it proved in the last Olympic Games.  Sure, China has a reputation for copying goods, ripping off ideas, faking products, and poor quality.  But a country can't fake 51 gold medals or 11% GDP growth year-on-year.  And as nasty as Great Wall wine tastes to most of us, I have no doubt China can eventually compete with the best in the world when it comes to quality wines -- if it really wants to.  Let's hope these beautiful chateaus can make it that long.

Links and Sources:
Photo is from Bodega Langes