Industry News
Far East investors try wine for better returns
Times Online
Ian King, Deputy Business Editor
February 16, 2009
Chinese and other investors from the Far East are piling into fine wines, traditionally a preserve of European and American buyers, as they seek to diversify away from traditional investments such as equities, experts say.
Premier Cru Fine Wine, Europe’s leading fine wine investment house, has reported a rising level of interest from Chinese, Japanese and Filipino buyers. The sudden rise in the popularity of wine as an investment in the Far East is partly because of the burst in strength of China’s renminbi and Japan’s yen against sterling, according to portfolio specialists at the London-based company.
Such investors have also been attracted by the relative strength of the wine market against the stock market in recent months and the historical outperformance of wine as an asset class in previous economic downturns, they say.
There has been a huge increase in wine consumption in China in the past five years, according to Gavin Saffer, of Premier Cru Fine Wine Investments. “Chinese palates are slowly but surely adapting, learning the complexities attached to wine and, accordingly, wine has become a greater understood commodity,” he said. “In light of the economic downturn, wine has rapidly moved from a status symbol to a serious asset opportunity. The Philippines, the third-largest wine-drinking nation in Asia, has opened the world’s second-largest wine storage warehouse, and the wine investment market has taken off, with investors looking to those with specific knowledge and contacts for investment advice.
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“Investment in wine over the last seven years has produced an average annual return of 16 per cent, easily outstripping the performance of Western stock markets over the same period.”
Mr Saffer said there were also signs that Far Eastern investors regarded wine as less vulnerable to fraudsters than traditional stock market and banking-related investments.
He added: “Japanese investors are now placing significant orders with leading wine investment companies, in order to take advantage of the ‘ripe’ market conditions. Due to its geographic positioning, London is the capital of the wine market.”
The most popular wine among Chinese investors appears to be Château Lafite, a vineyard that, traditionally, only the very wealthy could afford, Stacey Lea Golding, managing director of Premier Cru Fine Wine Investments, said. Their second choice is Carruades De Lafite, the second wine of Château Lafite, with Château Talbot and Château Palmer also attracting buyers.
The price of a case of Château Lafite 1982 has risen from £9,500 in June 2006 to £21,000 at present, while a case of the 2005 vintage – “one of the great vintages” – has risen from £3,750 to £6,850 in the same period.
Sino relations on red alert
CHINA is an exciting, emerging market for the Australian wine industry. But there are 1.3 billion people in China, and with a per capita wine consumption of half a litre each, many wine-making nations want a piece of the action.
Our ambitions for success now rest on the shoulders of a young woman about to become Wine Australia’s Market Development Officer based in Shanghai.
Summer Yan was born in 1979 in Jiaxing, almost sacred as the birthplace of the Chinese Communist Party in 1921. She has plenty of advice for Australian winemakers spending time and money to enter the market, too.
Her most recent trip to Australia, her third, was to soak up Aussie wines and lend some insight into her homeland.
China was introduced to the wines of France nearly two decades ago, and in particular the wines of Bordeaux. Little wonder, then, that there is a preference for red wine and in particular, cabernet sauvignon blends.
“Eighty per cent of wine is sold in supermarkets and 80% is red,” says Yan. “Cabernet blended with merlot is better than a single-variety cabernet. That’s not attractive.”
That’s a handy piece of information to keep in mind, especially given that Australia produces a fair amount of cabernet and is desperately looking for enthusiastic export markets. Encouragingly, Yan says merlot and shiraz sales in Chinaare on the up and up.
Forget about sending heaps of our bulk wine to China. There’s no market there, or at least no market that we will make money out of.
Forget about trying to introduce lots of cheap, sunshiney, fruity wines (aka, dregs from an oversupply of fruit from recent vintages). Those kind of wines can’t compete with China’s own domestic wine industry that churns out really cheap (but rarely cheerful) wines.
And those cute-as-a-button koalas and kangaroos on labels don’t impress. They’re so 20th century.
“If you put a koala on the label, although this is very Australia, this is not high-end,” says Yan. “Chinese like simple, classic, elegant labels.” The “high-end” French wines, it seems, have already had a big influence on the market.
A market insight report prepared on China by the Australian Wine and Brandy Corporation notes that wine drinking in China is now “aspirational” with many consumers buying wines for reasons of prestige rather than taste. “Reflecting this, the majority of wine sold in China is given as gifts,” it says.
This is where expensive bordeaux, champagne and cognac come into their own.
France is the number one exporter of wines to China.
Australia is number two, but Spain and Italy are breathing heavy on our collar.
Yan represents the younger generation of Chinese for whom wine won’t be so much aspirational, as natural. Her story is similar to that of many her age who have been exposed to Western cultures in recent years.
From 2001 to 2006, she worked for an Australian architect based in Shanghai who introduced her to Aussie wines, mainly Penfolds and Wyndham Estate. Clearly, the guy was an enthusiast.
Something clicked.
By mid-2006, she had joined Austrade as a business development manager on the food and beverage team. “Lucky me,” she says. On August 18 this year she joined Wine Australia, “the big family”.
Her tastes in wine are the tastes of other young people in China. She loves white wines, sparklings and rose{aac}. She expects sales of these wines to increase because young Chinese are entertaining more, going out more for drinks and want “lively” and “relaxing” styles of wines.
The wine of the moment in China (apart from those reds, of course) is moscato.
Brown Brothers’ biggest seller in Asia is its sweet and fruity zibibbo (the word zibibbo is an accepted synonym for the muscat or moscato grape). Another Victorian winemaker, Terra Felix, has just sent off the entire 15,000-litre production of its moscato gold to China.
Apparently, gold is the colour of good luck and figures prominently on the Terra Felix bottles - not a koala or wombat in sight.
Asia hosts an industry largest Spa & Wellness Summit 2009
Kuala Lumpur - Featuring 20 speakers and an average of 300 delegates of industry professionals, hoteliers, investors and operators, the upcoming Asia Spa & Wellness Summit 2009 is without doubt the largest gathering of spa and wellness professionals in Asia. It is indeed the only event of its kind in Asia.The two-day summit to will be one of the main highlights for Asia Spa & Wellness Festival 2009 scheduled to be held on 20 & 21 March 2009 at Royal Paragon Hall, Bangkok, Thailand in addition to Asia Spa & Wellness Festival 2009 - the international exhibition, trade mart and gala dinner / awards night for spas and wellness industry.
The organiser of the festival, AIC Exhibitions Sdn Bhd recently announced their list of credential speakers for the show covering different perspectives and direction setting and they are Professor Dr Gerard Bodeker (Australia), Larry Oskin (United States), Dr. Manish Patwardhan (India), Marisa Dimitriadis (South Africa), Heather Lee (United States), Jon Tay (Singapore), Dr. Franz Linser (Austria), Norman Jones (Thailand), Sheila T. Cluff (United States), Melinda Yon (Hong Kong / Malaysia), Ingo R. Schweder (Thailand), Julia Svath (Ireland), Scott White (United States), Dr. Orawan Kitchawengkul (Thailand), Terry Liew (Singapore), Kerry Jenni (United States), Grace Gawler (Australia), Pip Cornell (Australia), Stella Sigfusdottir (United States), and Andrew Jacka (Thailand). The summit will be moderated by its chairman, William Ng.
There will be plenary session, luncheon talk and concurrent session for wellness and marketing track. The Asia Spa & Wellness Summit 2009 continues from where the first summit ended. With the tagline, Learn, Share, Network, Grow, the summit is co-organised by Thai Spa Association and supported by Thailand Convention & Exhibition Bureau (TCEB) and Tourism Authority Thailand (TAT).
The summit programme is more of an “action plan” - combining a strong strategic overview of the industry and speakers that provides practical, do-it-now tips and strategies to succeed in the lucrative spa and wellness industry. Ideal for both beginners and seasoned spa and wellness professionals, Asia Spa & Wellness Summit 2009 goes beyond the hype and “spiritual-mumbo-jumbo” to real topics for real people.
Log on to www.asiaspafestival.com and discover how you can be part of this exciting event! For more information, please contact Mandy Lee Abdullah at +603 7803 6637 or mandy@asiaspafestival.com or Elena Reyes at elena@asiaspafestival.com.
Outrageous hotel luxuries
THE hotel industry started more than a century ago when stagecoach outposts gave overland travellers a refuge from the elements, and little else. Have your say!
Comments are open on this article - add yours Nowadays, however, five-star properties offer well-heeled guests spa treatments, personal butlers and even room service for pets.
High-end properties, says American Hotel & Lodging Association president Joe McInerney, aspire to give guests a “home away from home.” Of the luxury hotels recently surveyed by the AH&LA, 81 per cent had flat screen TVs and about 60 per cent had docking stations and DVD players.
Since such features are standard at most properties, hotels distinguish themselves by focusing on outstanding service. At Keswick Hall, a colonial-style mansion at the foot of the Blue Ridge Mountains in Virginia, new mothers can call on the baby butler. This attendant warms bottles, places a rocking chair and personalized crib in the room and rocks the baby to sleep while mom soaks in the tub.
Tasty treats for furry friends
Other hotels target a specific type of guest, like the pet-owner or environmentalist. The Lowell New York offers room service for pets, with choices like filet mignon tartar and organic buffalo marrow bone.
At the Four Seasons Resort Nevis in the West Indies, guests can contribute to local conservation efforts by paying to adopt an endangered sea turtle, which has been tagged with a satellite transmitter for research purposes. Adoptive guests then monitor their turtles’ migratory patterns via an Internet-based program.
Many luxury hotels have also shifted from a staid atmosphere to one that indulges their guests’ interests, whether that’s gourmet food or adventurous excursions.
The Enchantment Resort, a spa in Sedona, Ariz., has outfitted room terraces with built-in grills and offers an assortment of meats which are delivered by room service. At the Banyan Tree Phuket in Thailand, guests can fly by private plane to a secluded island, where they’ll watch the sun rise over breakfast. This may sound unoriginal, but the most sophisticated hotels integrate a guest’s every whim to make the experience truly memorable.
Such extravagances will only become more common among luxury hotels since fierce competition begets stand-out services and amenities.