Asia has become the fastest growing region on earth with millions of people entering the global middle class. Much of this growth is happening in China with higher incomes and increased demand for quality products such as food and wine.
While Australia has one of the most efficient agricultural sectors in the world and produces high quality clean healthy food, we are also ideally placed to supply fine foods and beverages as well. Australia has a key role to play in being the food bowl for Asia but the sheer size of Asia’s demand and our reputation for quality produce means we can also become a specialist and a high value supplier of fine foods.
Two of the key areas of opportunity are craft beer and boutique wine.
China’s beer market is worth $70 billion a year however while annual spend is increasing, total volumes have been falling by around five percent over the last three years due to the rising popularity of wine and craft beer alternatives. Younger more affluent consumers are preferring premium drinks such as craft beers and many of these are from abroad.
Selling to consumers in China is a lot easier these days due to the Chinese Government’s decision to reduce tariffs to assist mainland Chinese to access imported products and the widespread use of online shopping. In 2015, online sales of imported goods accounted for 17 percent of China’s total online sales.
Clearly there are significant opportunities for Australian craft beer and boutique wine makers to be part of China’s middle class growth. This export sector is no longer limited to those with large budgets and monolithic brands – it is now accessible to the smaller up and coming players as well. We need to do more to help smaller Australian businesses to understand that there is so much untapped potential in China.
Many people might be surprised to know that China is now one of the world’s biggest markets for imported wine. They like aromatic wines such as Riesling, Sauvignon Blanc, Chardonnay and Moscato and are happy to buy online because they like to be able to access the accompanying information and recommendations. Red wine sales are also increasing with Chinese consumers preferring fruitier softer wines with lower tannin and acidity.
This is good news for Australia because we are highly regarded for these varietals and our boutique wineries have the capacity to provide China’s younger and more open minded consumers with premium quality products which have some exclusivity and edge about them.
Looking across Australia’s growing craft beer and boutique wine sector, we should be seeing more of our local brands reaching China. Unfortunately many business owners think that exporting to China is too hard and or they don’t even bother to try or haven’t even considered it as an option.
It only takes a little bit of traction in China to create a life changing opportunity for an Australian business. With some 48 million urban upper middle class consumers of imported wine and beer in China, there is room for a lot of Australian success stories. Hopefully we will start to see more Australian craft beer and boutique wine makers getting involved.
David Thomas, Founder and President, The Australia China SME Association