China’s leading wine importer, ASC Fine Wines, has signed a major deal with American drinks giant, Constellation Brands Inc., to exclusively import and distribute its crown jewel wine brand, Robert Mondavi, in mainland China, deepening the two companies’ partnership.
The deal is the most significant announcement yet between the country’s leader in imported wine business and one of North America’s largest beverage companies, and is expected to inject a dose of confidence in Chinese wine market amid many headwinds including coronavirus pandemic.
The partnership officially announced this month builds on ASC and Constellation’s existing collaboration where the former was already appointed as distributor of Cosntellation’s Kim Crawford wine from New Zealand and Italy’s Ruffino for China market.
Referring to Robert Mondavi as “one of the most known wine brands around the world”, Yoshi Shibuya, CEO of ASC Fine Wines, lauds the winery’s traditions and heritage. He says, “The winery believes that wines should reflect their origins, that they are the product of the soil, the climate, and the careful stewardship of those precious resources. It also believes in combining the newest techniques and technology with time-honored winemaking traditions.”
Speaking of the partnership, he adds that the deal is a result of collaboration that started over a decade ago first with Ruffino and then Kim Crawford, and draws on the two companies’ synergy. “ASC and Robert Mondavi share very similar philosophy. ASC has over 24 years’ experience in the ever-changing wine market in China. Whilst we always stay true and faithful to our fine wine belief in every aspect of the company, we keep renewing ourselves to grow with the market using the newest sales, marketing and management know-how. Our mission is to bring the best possible wines to China to enrich the lives of the people here. The partnership with Robert Mondavi will definitely help us to achieve this mission of ours,” Shibuya expands.
Rethinking Robert Mondavi
Founded in 1966, Robert Mondavi winery is considered a pioneer for American wine industry, and for many wine lovers around the world it is almost synonymous with American wine.
In 2004, it was sold to Constellation in a US$1.03-billion cash deal. Its wine range consists of different tiers of collections from more approachable estate bottlings to the cult-like single vineyard wines from the legendary To Kalon Vineyard in Napa Valley.
In China for a long time, the wine brand’s different wine ranges were distributed by various merchants across the country, which helped raise its visibility and popularity among Chinese drinkers in different regions. However, it also caused fragmentation problem, as a result.
By working exclusively with ASC, it is expected to leverage ASC’s more than 20 years of experiences as a fine wine merchant and its nationwide distribution network to consolidate Robert Mondavi’s distribution channels.
According to ASC, the deal gives the wine company distribution rights to Robert Mondavi’s full range of wines including its Woodbridge wines, featuring Bourbon barrel and rum barrel-aged wines that have racketed up immense popularity among young drinkers in the US.
Introducing them to Chinese drinkers, Shibuya, is hoping to replicate their success story in the US to attract new and younger consumers in China. He notes that in the past few years, younger consumers born after 1990 have emerged as the new driving force behind wine consumption. Different from older generations, they shifted away from traditional idea of ‘drink to impress’ at banquets or business dinners but opt for wines that interest them for pleasure.
This echoes an earlier study by Chinese research company CBNData that affirms Chinese consumers aged between 20 and 30 are indeed boosting fortunes for distilleries, wineries and breweries around the world.
Looking ahead, despite market setbacks, Shibuya is optimistic that the current lull in the market is what he calls an “adjustment period” and the market will recover gradually.
“Wine import has been stagnant since a year ago, but it’s just temporary,” Shibuya said at this week’s China International Import Expo (CIIE) in Shanghai. “In the past three or four years, a lot of merchants were very excited and imported too much wine. Now we are in the adjustment period and as I have said the market already found new consumers and everyone is confident that the market will pick up in the future.”