Quanjude, the famed Peking Duck restaurant favored by premier Zhou Enlai to entertain foreign dignitaries, is aptly named as “King of Peking Duck” but its wine venture is a rare misstep.
The 160-year-old restaurant chain ventured into a private label wine collaboration with an Austrian winery, an ambitious project that has turned into a cautionary tale of market misalignment and strategic oversight.
China Quanjude Group recently revealed when answering investors’ queries about its brand-owned wine that it has a self branded wine crafted in Austria, which is available exclusively through its dining channels.
Founded in 1864, Quanjude is a famous Chinese restaurant brand known for its Peking duck. In 1993, Quanjude Group was established, and after several restructurings, China Quanjude (Group) Co., Ltd. was formed, encompassing four well-known restaurant brands: Quanjude, Fangshan Restaurant, Fengzeyuan Restaurant, and Sichuan Restaurant. In 2007, “Quanjude” was listed on the Shenzhen Stock Exchange.
Market Reaction and Sales Downturn
Though the group did not disclose name of the wines in question, from the country’s popular dining app Dazhong Dianping, it shows that the wine in question was the Quanjude Spaetrot Supreme Red Wine, listed without origin and priced steeply at RMB 428 (US$58.8).
Public records showed that the group’s partnership with Scharf, an Austrian coffee and wine company, showed initial confidence, with plans to distribute the wine across Quanjude’s extensive network of 90 restaurants back in 2012.
Despite initial plans in 2012 to sell 15,000 bottles in China, current reports show a starkly different reality. By 2023 and into 2024, there was no trace of wine sales in Quanjude’s financial reports. Further scrutiny revealed that the partnership had dissolved back in 2019, suggesting that any remaining stock on sale at the restaurants across the country are from old inventories, indicating sales flop.
Tangshan Meidu 1855 Trading Co., Ltd., with its deep roots in the dining sector, noted that while the practice of restaurants customizing their own wines was once popular, the pandemic had sharply curtailed such luxury expenditures. Moreover, the habit of customers bringing their own bottles had solidified over the years, rendering Quanjude’s expensive and non-mainstream wine option unattractive.
In China, restaurants allow customers to bring their own alcohol without corkage fees—a policy that discourages ordering wine in-house. Furthermore, Austrian wines, while esteemed globally, lack mainstream recognition in China, a market dominated by French, Australian and Chilean labels. This lack of familiarity further undermined Quanjude’s Austrian wine, making it less appealing to its clientele.
Quanjude boasts over 100 branches worldwide and its restaurants in Beijing and Vancour were once awarded with Michelin stars. In the first half of 2024 alone, the company reported substantial revenue growth to RMB 687 million (US$94.5 million), yet none of it attributed to the wine project.
A Flawed Strategy Exposed
Commenting on the flop, Dong Huaicheng, general manager of Tangshan Meidu, noted, “Quanjude lacks a wine heritage, and Austria, though a respected wine-producing nation, does not carry the recognition needed in China. The high price point, combined with ongoing consumption downgrades, makes it hard to see how this venture could ever have succeeded.”
Collaborations between restaurant groups and wine brands are not uncommon. For example, in 2022, the DBR Lafite Group entrusted the distribution of their third wine, Anseillan, to Xinrongji, a high-end Chinese restaurant group with several Michelin-starred restaurants. This partnership appears to be more of a mutual promotion—both brands are high-end and well-regarded. Notably, the first vintage of Anseillan had only 480 bottles allocated to China, placing minimal sales pressure on Xinrongji.
Conversely, a wine from a non-mainstream region, priced at RMB 428, appearing on Quanjude’s wine list, does not have a clear selling point to attract consumers to order it on the spot.
This ill-fated wine project serves as a potent reminder that even the most established brands can falter if they misjudge their market. Quanjude’s attempt to diversify into wines, while innovative, overlooked critical aspects of consumer behavior and market dynamics in China.
The tale of its wine flop is not just about a failed product launch, but a misalignment of brand strategy with cultural and market realities, proving that understanding your audience is as crucial as the product itself.
Discover more from Vino Joy News
Subscribe to get the latest posts sent to your email.
