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Australian winemaker sees enormous growth potential of Chinese market

www.xinhuanet.com by xuxin30/10/2018  

To winemaker Mark Kozned, the upcoming China International Import Expo is probably the most significant expo this year, where he expected to establish more relationships with customers in the Chinese market.

"The potential of the Chinese market is unlike any other market in the world," he said. "The growth potential is enormous."

Kozned is managing director of Nova Vita, a wine group in Adelaide hills of South Australia.

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Mark Kozned demonstrates how winemakers would retrieve and taste wines from barrels in the barrel room at Nova Vita's vineyard in Adelaide hills, Australia on Oct. 11, 2018.  To winemaker Mark Kozned,  the upcoming China International Import Expo is probably the most significant expo this  year,  where he expected to establish more relationships with  customers  in  the  Chinese market. (Pan Xiangyue)

South Australia produces more than 60 percent of wine in Australia. While Australia is home to around 5,000 wine producers, South Australia would account for 1,500 to 2,000.

In comparison, Nova Vita, which means "new life" in Latin, is a young enterprise, set up in 1999.

"It was set up by my wife and I," Kozned said. "I studied in the wine industry after coming back for 15 years in the finance industry when I worked in Melbourne, Sydney, New York and London."

In fact, the Kozned family has a long tradition of growing grapes and making wines. Before migrating to Australia after World War II, the family grew grapes in the Caucasus grape growing region in south Russia, which is famed for producing quality wines. Their wines were sold throughout Russia as well as used by the Orthodox church.

So the man decided to pick up the lost tradition. Their business started with one vineyard, which has now grown to three vineyards covering 85 hectares. They now produce about 2 million bottles of wine per annum.

His first visit to China was in 2012, as a result of going on a trade mission with the South Australian government. They visited Qingdao in east China's Shandong province, a sister city of Adelaide, and then the economic hub of Shanghai.

Biggest achievement of that visit was his first customer from Qingdao who ordered 300 cases of Shiraz.

Kozned's door was then open to the Chinese market. "I think the Chinese market is fantastic," he said, noting that in 2012, about 100 million Australian dollars (about 71 million U.S. dollars) of Australian wines were sold to China including the Hong Kong Special Administrative Region. This year Australia expects to export wines worth of 1.2 billion Australian dollars to China.

"If you look at our overall business, we have wine sales of 2.2 million Australian dollars a year, of that China would account for around 40 percent of our turnover," he said. "This year we expect to export more than 10 containers of wine to China, with a sales volume of more than 800,000 Australian dollars. So it is a very significant market to us, mostly of premium wine."

Over the years, he observed that, with the rise of people's living standard in China, demand of Chinese customers is changing.

"During my first visit, most of the inquiries are about entry-level wine, what I call everyday drinking wine about three (Australian) dollars a bottle," he recalled. "Now most of the inquiries are about wine that is mid-level, something you can have at home with dinner or with good friends, or for premium wine which people tend to use for gift-giving especially around Mid-Autumn festival or the Chinese New Year."

Now over 90 percent of the Nova Vita wines sold to China are mid-level or premium wines. "If you go to Shanghai or Beijing, you see wine bars and good restaurants have a mix of foreign wines. More and more foreign wines. That shows what is happening in the market," Kozned said.

However, Chinese customers have different palate for wines from the West. "They like what I call fuller-bodied wines, which are riper, more aromatic with more alcohol and richer of fruit," he said.

"When I first started selling into China, the only product I have is the Firebird range of wines," he added. "We developed the GK range for the export market, largely for the Chinese market. The GK range is much riper style."

Since 2012, Kozned has travelled to China for at least 25 times. "I have been to 10 different expos throughout China," he said. "This expo is very important because it is endorsed by the national government ... Big important Chinese businesses are going there."

He said he would like to establish more relationships with customers in the market they had never been exposed to before.

"Chinese customers need to be you have to be friends and then you listen," he said. "I meet them in Australia, I host them in Australia, I go to there, learn about their business, and then we do business. So that is creating that kind of relationship. This expo creates the ability to meet new customers and form relationships."

This year Nova Vita is going to introduce what they call a "super-premium Shiraz" for the expo. "It is a really high-end wine," he said. "It is a blend of traditional Adelaide hills Shiraz incorporated with some Barossa valley Shiraz."

He hoped that he could see an improvement of the Sino-Australia relationship as well.

One thing Kozned would like to say to his Chinese customers is that in 20 or 30 years of time, he hoped that their children would still be drinking wines made by his children. "I hope our relationship could be long-lasting," he said.