In business there are two main kinds of innovation: making better products and finding better ways to market them.
For the Australian wine industry, the challenge is how to creatively and appropriately promote and sell their reds, whites and sparklings to a new but rapidly expanding group of consumers.
Right now, China is the growth market. With its burgeoning middle class, China drinks 6% of all wine globally. And, in 2015, China’s wine imports grew by 45%. Understanding what these new wine drinkers like, and how they relate to wine and wine culture, is of utmost importance. UniSA’s Ehrenberg-Bass Institute for Marketing Science is playing an important role in filling that knowledge gap.
Supported by the wine industry through Wine Australia, Professor Larry Lockshin, Dr Armando Corsi, Dr Justin Cohen and Dr Richard Lee have undertaken a suite of projects that test what Chinese consumers know about wine, what they want to know and what they need to know.
In 2015, China's wine imports grew by
China drinks 6% of all wine globally.
“The response to this research has been incredibly positive, from day one, right up to our recent international wine marketing conference here in Adelaide,” says Professor Lockshin. “There are so many people who really want to know about China, but don’t know where to begin.”
A good place to start is to understand that the game is changing rapidly.
“As recently as two years ago, there were all these ideas that when we talked about wine for Chinese consumers, it was just for special occasions—red wines only, consumed with great ceremony, all very mysterious,” Dr Corsi says. “But what we’re seeing now, thankfully, is that wine is becoming a more popular product, consumed on a daily basis, which gives a lot of hope for our producers. If it’s only drunk on a limited basis, the knowledge people will bother to acquire is limited.”
The research that inevitably attracts attention is the Chinese Lexicon project—the first scientific approach anywhere in the world designed to understand how regular drinkers of imported wine in China actually describe what they buy and taste. The rationale is simple: there’s no point in describing a wine as ‘showing hints of blackberry’ to someone who doesn’t know what a blackberry tastes like.
“Chinese consumers grow up with different foods to Western consumers, so while it might be handy for us to say that a wine tastes of strawberry, blackberry preserve, peach, or melon, it might be just as easy for Chinese consumers to say that a wine tastes of yangmei, dried Chinese hawthorn, saturn peach or cantaloupe,” says Dr Corsi. “And we should not forget about more generic descriptors, such as astringent, sour, mellow or lingering, as Chinese consumers use these terms three times more often than other specific descriptors.
“The findings will allow us to help Australian wine businesses choose the most appropriate Chinese descriptors to match the sensory profile of their wines, and avoid those that possibly won’t resonate. This means they can make the strategic decision to be more Chinese-centric and modify their back label information, tasting notes and collateral in various retail formats.”
Dr Corsi adds that a lot of the Chinese subjects had been “really surprised and impressed by the fact that we were doing this. They’d say ‘yes, that actually makes sense, but I never thought about it; I didn’t think I was allowed to say that the wine tastes of something that is Chinese’.”
Wine Australia has already taken the findings on board. It has produced a simple but comprehensive Wine Flavours Card that matches Western wine terms to their Chinese equivalents. It’s innovative adaptions like these, that will help the Australian wine industry seize the opportunities that the Asian century presents.
A more traditional marketing-related project, the China Wine Barometer, is tracking the preferences, purchases and usage occasions of Chinese wine consumers in a range of first and second-tier cities, twice a year for three years. Four of six waves have been completed, with the researchers reporting findings back to industry at each stage. The fourth wave, for example, provided comprehensive data on the behaviour of wine-buying by Chinese consumers and choice drivers for wine in the retail sector, as well as the attitudes and perceptions consumers have about retailers in bricks-and-mortar shop fronts, direct sales and online channels.
This team is also investigating various approaches to wine education for new Asian wine drinkers and how, and where, to target them.
Another of their studies examines the potential for wineries to engage with Chinese tourists, who often visit wine regions for the experience as much as for the wine. It found that Chinese tourists who are exposed to wine while on tour are more likely to purchase Australian wine when they return to China, which means that targeting them in Australia has follow-on sales benefits. However, further marketing is required once they return home, if momentum is not to be lost.
The research also found that perceived images of Australian wine and tour destinations are not distorted by seasonal factors or fluctuations. Hence, activities to influence Chinese tourists can occur all year round and not just during a particular time period. This, in turn, makes planning and execution flexible.
For Dr Corsi, one of the key take home messages from this body of work is that when pitching a premium product, authenticity and trustworthiness are vital.
The days of creating red and gold bottles with dragons on them for Chinese consumers that you’d never try to sell in Australia are over,” he said. “You lose connection with the place of origin and you are creating something they consider isn’t real.”
Dr Cohen believes the projects should serve as the science behind the development of evidence-based customer acquisition strategies. “Australian wine brands need to harness their well-recognised creativity within a framework that delivers brand growth and ultimately Australian category growth in China.”