Category Archives: Changyu

Book Excerpt: On the China Wine Trail

September 15, 2020 By in book reviews, Changyu, China wine, emerging wine regions, The Next Big Thing, wine Leave a comment

chinaI thought you might enjoy using your imagination to travel to China along with Cynthia Howson and Pierre Ly via this excerpt from their new book Adventures on the China Wine Trail: How Farmers, Local Governments, Teachers, and Entrepreneurs Are Rocking the Wine World, which won the 2020 Gourmand Awards gold medal for wine tourism books.

Many thanks to Cynthia and Pierre and to Rowman & Littlefield for giving permission for publication here. This selection is from Chapter 2: Sea, Sand, and Shandong. Enjoy!

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It was serendipitous that we ended up on the beautiful coast of Shandong, with its sandy beaches and romantic restaurants, on Qixi, the Chinese version of Valentine’s Day. We were travelling with our colleague, Jeff, an adventurous traveler with enough Chinese to get into trouble. This is even more so since Jeff’s then wife had stayed in Seattle and no matter how much he emphasized he was married, he seemed to get quite a bit of attention. That he found himself declining offers at 4:00 a.m. in the Qixi-themed night club was to be expected. The unsolicited calls to his hotel room from would-be escorts took him by surprise. We probably also got such calls, but since we didn’t understand them, we assumed a wrong number. For us, the city of Yantai was brimming with kitsch and romance. Our hotel bathroom was adorned with stickers with cute animals and hearts. And on the bed, we found towels folded into heart-shaped kissing swans.

We made the mistake of overfilling our schedule and requesting a meeting with renowned Chinese wine journalist, Jim Sun, just as he returned from a business trip on the erstwhile romantic evening. Of course, he and his wife were incredibly gracious as he led us through a tasting to showcase some of China’s best wine regions. It was only later that we considered the couple may have better things to do than a 7:00 p.m. meeting with economists.

His shop was in the perfect romantic space, near Yantai’s “World Wine Walk.” The pedestrian path connects the road to the crowded sunny beach and it’s lined with facades of shops named after world wine regions. A young man with a burgundy-colored shirt and black pants held his fiancée, whose red dress was a great match for the red circle shaped sign of a shop referencing wines of . . . Niagara. We never figured out why the gate that led to it was behind a giant yellow rubber duck, but this, too, was photo-worthy. In any case, Yantai is a must-see capital for a wine tourism enthusiast in China.

winewalk

Yantai’s World Wine Walk: a great place for wedding pictures

What makes the city so special? It turns out that this is where Chinese wine began, longer ago than you might think, in the late nineteenth century. When we prepared for our first China trip, we jumped straight to the index of our brand-new 2013 Lonely Planet China, and searched for the word “wine.” Of course, this was no California or France travel guide. But we were pleased to find at least one mystery wine destination: the Changyu Wine Culture Museum, in Yantai. Back when we began our China wine adventure, that was the only place the Lonely Planet sent English-speaking tourists looking for wine in the country.

Changyu was the first winery, and to commemorate this, in 1992, they built the Changyu Wine Culture Museum. Only a short walk from the waterfront, conveniently located near other top sights, bars and restaurants, the museum attracts large groups of tourists who are happy to take the guided tour and hear the story. Since then, a booming wine industry has developed in the province, including many wineries designed as attention-grabbing tourist attractions.

When Changyu opened the first modern winery in China, founder Zhang Bishi had help from an Austrian Vice Consul and winemaker, Baron Max von Babo.i It is one of the first names you learn on the tour, but it could have been someone else. When the company was founded in the early 1890s, the first foreign consultant, an Englishman who had signed a twenty-year contract, fell ill before he was due to arrive and died of a toothache gone wrong. The Dutch winemaker that followed him turned out not to be qualified. Von Babo got the job and the rest is history.ii “Babo” might ring a bell for dedicated Austrian wine enthusiasts. It is another name for KMW, the standard measurement of grape ripeness still used today to classify Austrian wines. KMW was invented by Max’s father, August Wilhelm Freiherr von Babo, an important figure of Austrian viticulture and enology.

The place was designed to promote Changyu’s brand, of course, which is well known thanks to its overwhelming market share and supermarket shelf space. But there is a clear effort to teach visitors about wine and viticulture, with details on each aspect of production. Armed with knowledge from the museum, tourists can head out of the city toward Chateau Changyu Castel, a joint venture with the Castel wine group from Bordeaux. It’s close to a popular water park and the new construction we saw in 2013 gave a sense of ever-expanding options. There is a museum component here too, but this one is a ginormous working winery. Unlike our Beijing Changyu trip, there were large buses of tour groups, exiting en masse, walking through the vineyard (“Don’t Pick!” one sign said). They took the guided tour of the winery, observing the large stainless-steel tanks and taking pictures of the long rows of oak barrels, or in front of the display riddling station for sparkling wine bottles. On the way, our taxi driver told us he didn’t drink wine, but he recited with pride how the winery got started in 1892 by Zhang Bishi. We invited him along, and he enthusiastically took even more pictures than we did.

The winery tour included a tasting in the bar with views over the vineyard, as well as a percussion set, two foosball tables, and coin-operated barrel dispensers. Families seemed to have fun with the tasting, studiously following their guide’s instructions. But tastings weren’t presented as the highlight of the tours. At the museum, the tasting was in the underground cellar, with pre-filled glasses lined up and covered with plastic wrap, leaving the white wine samples awkwardly warm. Unlike in Napa, no one came here hoping to get tipsy. As one Chinese expert told us when we asked about these tours, if the tasting is deemphasized, it’s probably not the best part. We knew that Changyu wine had won international awards, so why did they serve underwhelming wines to visitors? These museums did a good job promoting wine culture in beautiful spaces, but the wines themselves seemed to be extras on the set rather than main characters. Three years later though, on a return visit to the museum, the wines on the tour were good. Did this reflect a renewed focus on wine quality, or did we show up on a good day? Time will tell.

Changyu and wine street are just the beginning of a wine tourist route along the coast. We drove north to see where thousands of families plan their beach vacations, just a short hop from Beijing, Shanghai, and Seoul. Our hotel lobby was filled with an all-ages crowd, geared up with matching hats. The group was among two million visitors hoping to see a magical mirage at the Penglai Pavilion, one of the four great towers of China. Add glorious beaches, an ocean aquarium with dolphin shows, fresh seafood and nightlife opportunities, and you can see why investors see wine tourism dollar signs in the making.

Adventures on the China Wine Trail: How Farmers, Local Governments, Teachers, and Entrepreneurs Are Rocking the Wine World by Cynthia Howson and Pierre Ly. Rowman & Littlefield, 2020.  Reprinted by permission of Rowman & Littlefield Publishers.

Notes:

i His employment contract, in English, is an auction item at Christie’s. See Christie’s, “Wine in China,” Christie’s, January 16, 2014, https://www.christies.com.
ii Michael R. Godley, The Mandarin-Capitalists from Nanyang: Overseas Chinese Enterprise in the Modernisation of China 1893-1911 (Cambridge: Cambridge University Press, 2002); Jonathan Ray, “Wine: Is China the New Chile When It Comes to Wine?,” Telegraph, January 18, 2008, https://www.telegraph.co.uk/.

Asking the Right Questions about Wine

December 19, 2008 By in biodynamic wine, brands, Changyu, China wine, climate change, cork vs screwcap, wine auctions, wine brands, wine markets, wine price, wine research 3 Comments

It’s finals week at the University of Puget Sound, so I’m thinking about the question, what wine goes best with final exams and term papers?  A sweet wine, to capture the sweet taste of success?  Some bubbles to celebrate finishing one set of tasks and moving on?  Or maybe a bitter sweet wine, because moving on inevitably means leaving some people and relationships behind?  Hard to figure how best to match a wine with all these emotions. It’s a difficult question.

Dump Bucket Drills

But I know one wine that doesn’t match up very well.  My class on “The Idea of Wine” organized an informal tasting on Monday to celebrate finishing their term papers.  The main project was a blind tasting of inexpensive (some were very inexpensive) Merlots.  I was impressed with the students’ serious efforts to evaluate and score the wine and their recently acquired (and, for college students, somewhat unnatural) propensity to use the dump bucket.

We tasted other wines including a Chinese wine that Brian West personally hauled back from Beijing a few years ago.  It was a 1999 Changyu Cabernet Sauvignon.  Changyu is China’s oldest winery and a good example of a mid-market Chinese wine (I wrote about Changyu and the Chinese wine industry in The China Wine Syndrome).

I found a video review of this wine on the web (click here to view it, but be forewarned that there is some harsh language used by the reviewer) that described the wine as being all about ashtray and coffee ground flavors with aromas of urinal crust.  Hard to imagine.  Until you taste it, that is.  The description is right on the money.

I’ve read many optimistic reports on the Chinese wine industry, mostly based on high potential production volumes and not so much on quality.  The quality wasn’t there in 1999, based on this wine, but there is reason to believe that things are changing.  I sure hope they are! The dump bucket got good use on this one.

Hard Heads, Soft Hearts

I’m reading my students’ final papers now – they are quite good, by the way – and I thought you might be interested in their topics.  I gave them great freedom to choose topics that interested them or related to their academic majors.  You can find a list of the paper titles at the end of this post.

Most people think education is about learning the right answers, and this is certainly important, but I think the more valuable skill is learning to ask the right questions, and this is true about wine.  I was impressed by the creativity of the questions my students asked.

One student, a Finance major, asked why Treasury bill auctions and wine auctions have different structures and what the impacts might be? A very interesting theoretical treatment. Another student did fieldwork in three wine retailers to try to understand the actions and interactions of wine buyers and wine sellers. The result was a revealing first person account of wine consumer behavior.  An economics student who grew up in Napa Valley examined issues relating to migrant labor there, combining economic theory, empirical data and personal observation very effectively.

All the papers were very interesting. My favorite title: “How corks are being screwed over” (an analysis of the cork versus screw cap debate).  Imagine, I get paid to read this!

Looking at the list of paper titles, I’m struck by how many students were drawn to issues of sustainable or ethical production and consumption:  organic wine, climate change, biodynamic wine, fair trade wine and so forth.  In general their analysis was thorough, pointed and objective.  They have “soft hearts” and “hard heads,” as Princeton Economist Alan Blinder would say.  They care about social issues, but think about them critically.  Blinder says (and I agree) that’s better than the other possible combinations: soft head/hard heart, soft heart/soft head or hard head and heart.

  • Comparative analysis of changes in Treasury auctions versus global wine auctions
  • An ethnographic study of wine consumer trends
  • Hispanic workers in California’s wine industry
  • Climate Change: what it means for Spanish vineyards.
  • Climate change and the wine industry
  • TetraPaks and cans: the alternative packaging of wine
  • Movement from niche markets to mainstream: prospects and challenges for ethical consumption in the wine market
  • The terroir of equality: fair trade wine
  • Organic wine: the beginning of redefining fine wine
  • Oak in Wine: an exploration into differences.
  • Green wine: ideas and details of sustainable wine
  • Wine’s historical and modern role in religion
  • Of vines and witchcraft: biodynamic wine
  • India’s wine prospects
  • Old world crash: wine’s changing face in the globalized market
  • What makes that bottle so expensive?
  • How corks are being screwed over
  • Aging wines: from barrels to bottles
  • Drowning in the wine lake
  • Wine brands: friend or foe?
  • Wine tourism and economic development
  • Bordeaux versus Burgundy: why the rivalry matters
  • Transitioning wine industries: assessing development strategies in the wine industry

The China Wine Syndrome

January 7, 2008 By in Changyu, China wine, Grace Vineyards, Supply and Demand 2 Comments

I’ve never tasted Chinese wine, but that’s going to change quite soon. I have two bottles, both hand-carried from China by my former student Brian West. One is a 1999 Cabernet Sauvignon from China’s oldest winery, Changyu (founded in 1892). The other is a 2003 Tasya’s Reserve Cabernet Franc from what many people say is China’s best winery, Grace Vineyard (or Shanxi Grace Vineyard to differentiate it from a Japanese winery with the same name — Shanxi is the region of China where Grace Vineyard is located).

I have heard a lot of stories about Chinese wine — about how bad it is, how prestige-seeking Shanghai yuppies mix expensive first growth Bordeaux with Coca Cola and of vast vineyards in China that threaten to flood world markets with cheap wine (as Chinese exports have flooded some other markets already). The prospect of drinking Chinese wine for the first time gave me an incentive to see what I could find out about the Chinese wine industry and market. Here is a brief account of what I have learned.

Wine has a long history in China, reaching back more than 2000 years to the first wine imported from Ferghana in what is now Uzbekistan. It wasn’t until the 19th century, however, that more than a trickle of wine was produced or consumed. Western missionaries brought grapes and wine to China along with their bibles (as they did in California, Argentina and Chile). The real roots of today’s industry were planted in the late 1800s, however, when Changyu and other wineries were founded, mainly to produce wines for the foreign communities in the commercial centers.

The communist government expanded wine production after the 1949 revolution. Wine was promoted as a form of alcohol made from abundant fruit sources (grapes, both vitis and indigenous Asian varieties, and other fruits) in order to reduce use of precious food grains for alcohol production. Wine was meant to replace beer or grain spirits in the diet. Wine was typically made from a combination of grapes and other fruits. I understand that it is still sometimes necessary to specify grape wine in China, since generic wine may be made out of any number of fruits. It is probably not surprising that Chinese who were brought up on these mixed-fruit wines might today mix dry grape wine with fruit juice or Coke to get a more familiar flavor.

China’s vineyards are indeed vast, totaling six percent of the world total. There are 453,000 hectares of vineyards in China, which is roughly equal to the U.S. (380,000 hectares) plus Germany (98,000 hectares) or just over the half the vineyard area of France, the world leader. But 80 percent of the grapes are grown as fruit for the table grape market. About 10 percent of the grapes are dried to make raisins. The remaining 10 percent are wine grapes. China’s wine production is relatively small — 730 million liters compared to 2,546 million liters for the U.S. and 898 million liters for Germany. China produces about as much wine as Moldova and Romania combined — a lot of wine, but still just 2.6 percent of the global total.

Comparative wine production statistics for China are a bit problematic because (1) much of the wine produced is not pure grape wine but may be mixed fruit wine and (2) the rules on what can be labeled Chinese wine are quite lax. Grape wine needs to be only 50% grape and Chinese wine needs to be only 50% from Chinese-produced juice, according to one report I found. This means that a great deal of the bad wine that tourist report being served is not really grape wine and may be a blend of a little Chinese grape wine and a lot of imported bulk wine of undetermined origin. Rules get bent and outright fraud is not uncommon, I understand.

China has about 450 wine producers, which is approximately the number here in Washington State. The industry is highly concentrated with four wineries accounting for 60 percent of domestic production and sales. The big four are Great Wall, Dragon Seal, Changyu and Huadong. Foreign partnerships are common, giving Chinese winemakers access to international technology and expertise. The French multinational Pernod Ricard helped create Dragon Seal in 1987, for example, and Seagrams and Remy Martin have also been involved in joint ventures.

If the quality of the large scale wineries is disappointing, as many tourists report, the reason can be found in the supply chain. Wine is only as good as the grapes that go into it, or so growers tell me, and the grape supply situation in China is difficult. Most of the wine grapes are grown by families that lease about an acre of land from their local agricultural commune. That acre is tyically divided into four or five small plots that are planted with different crops so as to minimize risk. One or perhaps two of the plots may be wine grapes in the vineyard regions. So vineyard scale is impossibly small — smaller even than in the south of France.

These small growers insist on calling the shots, which is natural since they are so dependent upon the success of their tiny farms. The wine producers have no control over what these hundreds of thousands of micro-vineyards produce, how they are cropped, and when the grapes are picked. Researchers suggest that the grapes are chosen and grown to maximize quantity not quality and that the grapes are picked as soon as possible to minimize risk of poor weather than could destroy the crop. So small crops of flavorful fully ripe grapes — the winemaker’s dream — that’s not going to happen in a typical Chinese vineyard. One study I found suggested that the grapes sell for as little as $80 a ton.

There is not much incentive for individual growers to sacrifice quantity for quality because their grapes are sold by weight to agents who lump together fruit from dozens or hundreds of individual growers. Good fruit would quickly get mixed with inferior fruit, so why pay more? The local agents often then resell the fruit to regional agents who sell again to the large winemakers. You can just imagine the condition of the fruit by the time it finally gets to the winemaking facility having passed through so many hands. This system is worse than the European cooperatives I have read about (and I didn’t think anything could be worse than that).

Wine is sold in all sorts of ways. The Changyu website offers to let me buy wine by the barrel, which is perhaps what I would do if I owned a restaurant or a village drinks shop where I could decant the wine into bottles, jugs, or any other available container. Economists who study the Chinese wine market are increasingly focusing on supermarkets as a growing distribution vector. Partly I think this is because grocery store sales of wine are increasing, but also I think because these economists are interested in the potential for foreign wine imports. I don’t think relatively expensive French or California wines have much chance of penetrating the traditional bulk distribution system where a lot of Chinese wine goes, so supermarkets are their best bet. Supermarkets may also eventually play an important role in educating Chinese consumers about wine in general and foreign wine in particular.

A small number of boutique winemakers have appeared, often financed by Hong Kong Chinese families and using international “flying winemaker” expertise. This is the basic story of my Grace Vineyard Cabernet Franc. Hong Kong businessman C.K. Chan invested USD 7 million to build a French-style Chateau. He hired Bordeaux winemaker Gerard Colin to supervise production full time. Output is now more than 40,000 cases. My bottle of reserve wine says that it is estate bottled from grapes grown on the estate and this may suggest why Grace Vineyard wines are often rated the best in China: control of the supply chain. If Grace controls the quality of the grapes then they can better control the quality of the wine. People say that Grace Vineyards is the best French wine made in China. I’m looking forward to trying it.

The bottom line is that the future of wine in China is difficult to predict. Surely wine consumption will grow as China gets richer and Chinese adopt more western consumption habits. Wine production will grow, too, and quality will rise as better technology is adopted. But it will be interesting to how quickly Chinese consumers accept dry western grape wines after their long experience with mixed fruit wines. And it will be interesting to see how quickly the quality of grapes can be raised.

It seems to me that the biggest barriers to quality wine are not in the stores or even in the habit of mixing red wine and Coke. The biggest problem remains the sorry state of rural Chinese agriculture — a good reminder that wine is fundamentally a product of the soil.

Note: Special thanks to Brian West for bringing wine back from China where he was teaching with a University of Montana law school program. Thanks as well to Judy Leissner, who runs Grace Vineyard, for her assistance in locating Grace Vineyard products. Click here to view an interview with Judy about running a family wine business in China.

Special Note (added 1/13/2008). Click here to read an interview with Judy Leissner on the a blog called The Grape Wall of China, which is a good resource on the changing Chinese wine industry. Thanks to Jim Boyce (a.k.a. Beijing Boyce) for this link.