Beaujolais in China

Résumé du document

The confederation of wine producers from Rhone and Loire Valleys has asked our consultancy to study the possibility to expand Beaujolais Nouveau sales in China.

According to our study, we have determined Shanghai as the best place in China to launch this kind of French wine. This city symbolizes the Chinese gate for the western world.

This study will start with a brief explanation about China. Secondly, we will discuss about the Market that we are planning to enter: the beverages market and especially the wines one. Then, we will explain the Beaujolais Nouveau. Finally, we will explain the business plan with the income statement and our recommendations.

Extraits

[...] But those brands tend to develop as they have active participation in the market. Apart from the domestic brands, competition is also rough with the imported wines even if they represent only 10% of the Chinese wine market. The main wine exporters in China are Chile, France, Spain, Italy, Australia and USA. Chile is the leading exporter of bulk wine in China. Bulk wine imports are superior to still wine imports as most of the domestic brands mix it with the local wines. [...]

[...] Per capita consumption of fruit juice is only less than one litre in China. However, because Chinese consumers are becoming more health- conscious and juice drinks as vitamin supplements naturally appeal to the majority and the market has enormous growth potential in the next few years. Coca cola and Pepsi Now, through 2005, the country's soft drink output will develop at an annual growth rate of 10 percent. In 2005, its annual production total is expected to reach 2.26 million tons. [...]

[...] Consequently, it will be easier for the Beaujolais nouveau to integrate the Chinese market wine, thanks to the reduction of import tariffs. However, there are already 26 wine makers from Rhone and 10 wine producers from Loire Valleys which are already exporting in the Chinese market, so Beaujolais Nouveau will have to differentiate from its direct competitors. Bargaining Power of Buyers End consumers Chinese wine consumers drink only 0.3 litre of wine but the average red wine consumption per capita is 0.5 litre , so at the first view, the end consumers has low bargaining power . [...]

[...] * Scarcity of product * Budget innovation of 1,8 million d'euros Strong competition (whisky) Weak % of wine drinkers: Many Taxes (VAT, Importation) * Huge dynamic country * Chinese government policy * Big cities * Wine market in constant growth * Entrance in WTO * French reputation Beaujolais Nouveau is always released on the third Thursday of November, regardless of harvest date. All the grapes in the Beaujolais region must be picked by hand. In France it's synonym of happiness and celebration. And it is also good for your health . [...]

[...] China is the world's ninth largest consumer of Cognac with 2.28 million bottles sold in 2003. Indeed, the French alcohol has soared 10% in the country in 2003. Whisky Whisky has become very trendy in bars and karaoke‘s .Whisky sales in china increased by at least 20 percent in 2003 and sales volume of “Chivas Regal” boosted by 12 percent in the same year. The wine market Local wines The production Twenty years ago when China opened to the West, many Sino French joint- ventures invested in the wine sector. [...]