Chen Lizhong, owner of Tiansai Vineyards, located in China's outpost in Xinjiang (pic: Tiansai Vineyards)
China Wine

China’s Baoyun invests in Tiansai Vineyards

Baoyun Group, headed by formerly disgraced Castle Li of COFCO, is making a strong comeback with a new investment in China's Tiansai Vineyards.

Baoyun group, a rising distributor of spirits in China headed by former head of COFCO Wine & Wine, is now eyeing wine business with its latest investment in one of China’s most known wineries, Tiansai Vineyards in northwestern Xinjiang.

During the Alcohol Innovation & Investment Conference 2021 held in Haikou, the capital of Hainan province in southern China. Castle Li, the founder of Baoyun, announced that his group is investing in Tiansai vineyards as a strategic plan. Li himself would be appointed as the winery’s co-chairman.

Although the investment amount has not been specified, Li said the group would strive to turn Tiansai vineyard as a world-class vineyard and lead the development of China’s boutique winery development.

It also came at a time when the only one-year-old drinks company headed by Li has received millions of funding from investors as it strives to become China’s Suntory that produces and distributes a diverse range of alcoholic beverages.

Chen Lizhong, owner of Tiansai Vineyards, and Castle Li, founder of Baoyun Group (pic: Net Ease)
Chen Lizhong, owner of Tiansai Vineyards, and Castle Li, founder of Baoyun Group (pic: Net Ease)

Explaining the decision, Baoyun Group says it views Tiansai vineyard as the bellwether of Xinjiang’s wine, the backbone of China’s wine business, as well as an important puzzle of its “super brand” strategy. Li said the latest move to invest in the winery is based on his optimism towards China’s wine market in the future. 

Castle Li is formerly known as one of the most important personalities in China’s drinks industry for two high-ranking positions, namely the Deputy General Manager of state-owned COFCO’s alcoholic beverage department and the General Manager at COFCO-owned GreatWall Winery.

COFCO was China’s biggest wine importer and GreatWall Winery ranks as China’s second biggest wine producer after Changyu Pioneer Wine Company. 

Li’s career at COFCO came to an abrupt halt when several Chinese news media confirmed with COFCO in September 2019 that Li was relieved from the positions due to “discipline violation”.

Tiansai practices organic viticulture in Xinjiang, northwest China (pic: Tiansai Vineyards)
Tiansai practices organic viticulture in Xinjiang, northwest China (pic: Tiansai Vineyards)

But it did not take long for the industry veteran to bounce back to the scene. In May 2020, Li founded Baoyun Group, a Baijiu producer and distributor. Currently, it is the exclusive distributor of Wuliangye’s ‘World Red’ series and Guotai’s ‘Longyao Vintage’. The company has also released its own baijiu brand ‘Jia Deng Da Jiang Zhang’ in April this year.

The company is young but it is ambitious to become a trusted international liquor group with the goal of opening 1,000 liquor stores by 2023. It aspires to become world’s leading liquor companies similar to Japan’s Suntory group and the US’s Southern Wine & Spirits. 

In June this year, Baoyun Group successfully raised RMB 600 million (US$94 million) in its series A round financing led by Country Garden Venture Capital, the investment arm of China’s leading property developer Country Garden. 

Baoyun Group adopts a strategy combined with building ‘super brands’ with ‘super channels’. The group has already cooperated with China’s high-end liquor brands such as Wuliangye Yibin and Guizhou Guotai and reportedly acquired the online and offline distribution channels of famous liquor brands. Dated to June this year, the company has achieved a record sales exceeding RMB 200 million (US$ 31 million).

Chen Lizhong, owner of Tiansai Vineyards, located in China's outpost in Xinjiang (pic: Tiansai Vineyards)
Chen Lizhong, owner of Tiansai Vineyards, located in China’s outpost in Xinjiang (pic: Tiansai Vineyards)

Its latest target Tiansai Vineyards was established in 2010 in Yanqi, Xinjiang. It is positioned as a boutique winery with an annual production of 400,000 bottles in 2020.

The winery was one of the first wineries to be certified organic in Xinjiang by Chinese authorities, thus regarded as a market leader in China‘s organic wine production.

The vineyard’s team is studded with international experts including wine consultant Li Demei, who was reputed as ‘world top 10 influential wine consultants’, and Chief Winemaker Ms. Lilian Carter who grew up in a family of winemakers. 

The wines from Tiansai Vineyards are served in top-class hotel chains including Marriott, Hyatt and Shangri-la, and made an appearance in Hong Kong’s Lindau Nobel Laureate Meeting in 2018. They are also exported to overseas markets such as the UK, France, Japan, Singapore and more.

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