Northwest Eyes Asian Exports

Washington sees growing market, Oregon is more cautious

by Peter Mitham
Total annual wine exports from Oregon to Asia
Recent annual cumulative wine exports from Oregon to Asia
The world's eyes will turn to China this Friday as the summer Olympics begin, but wineries in the Pacific Northwest are finding Chinese consumers turning their eyes east across the Pacific in search of premium wines.

Northwest wine exports to China and points across Asia have been on the upswing in recent years, expanding beyond Japan to South Korea and other countries.

While marketing efforts in Japan by the Washington Wine Commission (WWC) and Oregon Wine Board enjoy funding under the federal Market Access Program, efforts by individual importers to introduce Northwest wines to South Korea and other markets are paying off.

South Korea is now the third-largest overseas market for Oregon wine, ahead of the U.K., one of the state's official export targets. Meanwhile, at least six South Korean importers are now bringing in Washington State wines.

The growth of interest has been so significant that the WWC applied for additional federal funding under the Value-Added Producer Grant program earlier this year to support formal marketing activities in Korea and China (as well as Montreal, a growing market in Canada). The amount of growth is surprising given the lack of formal marketing initiatives, said Lily Huynh, export manager for the WWC, but she said the rising sales underline the opportunities available to the region's wineries.

"It's definitely amazing that it's grown in that way without any formal targets-without us doing trade or consumer tastings out there or having any kind of official marketing plan," Huynh told Wines & Vines. "There is an opportunity for increasing sales."

Asia is fertile ground for market development, she added, because people don't have the same bias towards wines from Europe that many other markets have. By the same token, there's also a hunger for information about wine.

Huynh said she's heard of high-end restaurants in China where the common practice was to serve reds chilled and whites at room temperature. It wasn't because customers were requesting the practice, but because staff didn't know the traditional practice was the opposite of what they were doing.

But bringing Asia's consumers up to speed isn't what the Northwest region should be doing, said Katie Stoll, senior marketing manager with the Oregon Wine Board. She explained that Oregon will let better-established areas develop consumer awareness in Asia and educate local consumers regarding premium wines before it commits significant efforts to marketing in the region.

This is particularly true of China, a territory that Oregon exporters have attempted to conquer before with scant success. An importer is currently active there, but Stoll doesn't know that any shipments have been made.

The big challenge, she said, is in the sophistication of the consumers and awareness of what Oregon has to offer. It doesn't yet have the profile other regions do, she explained, and Chinese awareness of premium wines is still developing.

Moreover, since exports account for just 2.5% of the state's total sales, Asia is a really small part of its overall market. "Japan is it," Stoll said.

Oregon shipped just under 13,364 cases of wine last year to Japan, second only to Canada as the state's biggest wine export market. A total of 2,831 cases were shipped to South Korea, the majority going to one importer. An additional 668 cases were shipped to points elsewhere in Asia, including Singapore, Taiwan, Hong Kong and China.

Washington state, by contrast, shipped 11,000 cases to Japan in 2006, and a total of 47,000 cases to Asia as a whole.

Japan, the People's Republic of China, Taiwan, South Korea and Singapore, respectively, are the major importers of wines from Canada. Three-quarters of Canada's wine exports are from Ontario, about half of those ice wines.

For more on exporting, click on "Case Studies in Exporting" by Laura Ness at: winesandvines.com/template.cfm?section=features&content=50634
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