What Winemakers Want: Moscato, China


These days, the world’s winemakers are after two things: Moscato and China.

The former is an in-demand grape varietal and the latter is a fast-growing market. And both have wine producers drunk on dreams of future riches.

“Moscato has captured everybody’s imagination,” said David Dearie, chief executive of Treasury Wine Estates Ltd., the Australian conglomerate that owns wine labels such as Penfolds and Wolf Blass. “It’s got great aromas, it’s slightly sweeter, it can be universal – made into white, red or sparkling. It’s lighter in alcohol. We want more of it.”

And so does everybody else, apparently. Earlier this year, Wall Street Journal wine writer Lettie Teague reported that winemakers were scrambling to get whatever Moscato they could. She even went so far as to call it “the hottest wine of 2012.”

“It’s just taken off,” confirmed Mr. Dearie in a recent interview in Hong Kong. Treasury currently makes wine with the Moscato grape under several of its labels including Wolf Blass and Beringer.

Mr. Dearie pointed out that Moscato is part of a larger trend among wine consumers, especially those in the U.S., who now prefer lighter wines that are less tannic and contain less alcohol. “People want to drink something at lunch and not be done for the day.”

But turn the talk to China, where Mr. Dearie visited just before his Hong Kong stop, and he grows even more animated. The chief executive, who joined the company in 2009 when it was still owned by Australian beer-brewer Foster’s Group, said Treasury’s wine exports to China make up only about 1% of its sales overall. But he expects that number to grow significantly, predicting that by 2015 the overall Chinese market will drink twice as much wine as it did last year and guzzle 250 million 9-liter cases.

“We want a sizable part of that,” he said.

The key to growing market share is building its portfolio of so-called masstige products – premium items sold at an attainable price point. A masstige wine is priced between cheaper mass-market wines and higher-priced luxury labels, selling at between 14 and 20 Australian dollars (US$15-21) in its home country. In China, the retail price for those wines is double due to import duties and luxury taxes, but Mr. Dearie said that the “luxury in the middle” wines have the greatest potential because of their strong branding.

Mr. Dearie added that Treasury was looking to expand its offerings in China to more labels and tailor its marketing there by drawing on its history. Australian wineries like Wynn’s and Seppelt, for example, were built partly by migrant Chinese laborers who arrived in the late 19th and early 20th century and planted vines and dug the cellars of the wineries. Mr. Dearie thinks that connection can be part of its branding campaign in China.

“We’re mining the history of our brands, finding out our heritage,” he said. “We think [the Chinese] will appreciate our long history and China’s contribution.”

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