The Australian Research Institute

Insights on how Chinese consumers choose wine and the influence of tasting on consumer preferences

Patricia Williamson

Leigh Francis Larry Lockshin Simone Mueller Loose

Factors influencing choice The Research Institute Diversity of consumer preferences in different wine The Australian Wine markets Research Institute

Research objectives The Australian Wine Research Institute

 to determine the influence of different messages about and shelf information on choice of by Chinese consumers

 to understand the impact of taste experience on re-purchase decision

The Australian Wine Research Institute Choice experiment: shelf simulation Choice experiment: Attributes and levels The Australian Wine Research Institute

Attribute Levels 1 Closure , natural cork Prestigious, Stately, Modern classic, Modern 2 Label style contemporary, Modern vibrant, Elegant contemporary, Eclectic, Light-hearted 3 Medals Gold, none 4 Grape variety , Shiraz, , Dry Red Wine 5 Country France, China, Australia, Italy

6 Price ¥70, ¥130, ¥190, ¥250, ¥310, ¥370, ¥430, ¥490

7 Store rating 99 points, 92 points, none

8 Expert rating 96 points, 89 points, none Example of a designed shelf The Australian Wine Research Institute

The Australian Wine Research Institute So how do Chinese choose wine? The Australian Wine Research Institute

? Status quo: Attribute importance The Australian Wine Research Institute (control group)

Attribute % Country Preference Store rating 31 0.5

Expert rating 28 0.4

Country 18 0.3 Price 13 0.2 Grape variety 5 0.1 Label 3 0 Medal 2 China Italy Australia France Closure 0 Communication: Australia Messages The Australian Wine Research Institute

 communication messages about Australia presented in advertorial-type articles that can have a positive impact on the choice of Australian over French or Chinese wine

 used to influence consumers at the point of purchase to choose Australian wines

1 - A great place to visit The Australian Wine Research Institute

2 - Clean and unpolluted The Australian Wine Research Institute

3 - Safe food and wine The Australian Wine Research Institute

4 - Wines with tradition and prestige The Australian Wine Research Institute 5 - The best tasting wines in the world The Australian Wine Research Institute

6- South American coffee goes green (Control article) The Australian Wine Research Institute

Australia communication messages (M) The Australian Wine Research Institute Control M M1 M2 M3 M4 M5

Choice 1 Stage 1 Aus Aus Aus Most Effective M Fr wine wine (online) wine N=1670 Extrinsic attributes

Choice 2

Aus Aus Aus Message memory Stage 2 Fr wine wine N=828 French wine wine retrieving (online) No M The Australian Wine Research Institute

RESULTS The Australian Wine Attribute importance – Stage 1 Research Institute

Country Preference Attribute %

Country 48 Control group 0.80 Store rating 19 Total sample

Expert rating 16 0.60 Price 11 0.40 Grape 3

Label 2 0.20 Medal 1 0.00 Closure 0 China Italy Australia France The Australian Wine Preferred price Research Institute

Price-demand curve

0.40

Utility 0.20

0.00 70 130 190 250 310 370 430 490 Price in RMB Most effective article

Australia: The best Tasting Wines in the The Australian Wine Research Institute World Recent research has shown that Chinese wine consumers  Highest effect on choice of Australianprefer the taste wine of Australian wines to French and other  Highest increase in Australiancountries’ market wines share. Hundreds compared of Chinese to control wine consumers tasted wines from the major wine producing countries without knowing where they were from. Australian wines were rated the bestCountry tasting of all the wines by the Aus market Article effect Version Chinese consumersabsolute. shareAustralian (%) winemakers look for the wine stylessize that people prefer, and in theimport. sunny, warm (%) climate ideal for grape growing, are able to produce them using modern Best tasting wines winemaking47 techniques59. Australian 282wines are approachable and understandable to Chinese consumers. Clean and unpolluted Australia46 is leading the60 world in producing258 top wines enjoyed by wine consumers in China and all around the Safe food and wine globe40 . 50 143 Tradition and prestige 38 52 108 A great place to visit 36 41 82 Second most effective article The Australian Wine Australia: Clean and unpolluted Research Institute

Recent research has shown Australia to be one of the cleanest and least polluted countries in the world. Scientists found the lowest levels of known pollutants in Australian food and wine products of any country in the world. Australia has abundant renewable, clean energy resources, and even the largest cities have smog-free crystal-clear air, pure water supplies, and unpolluted soils.

The lack of pollution means that Australia’s major food and wine exports are some of the cleanest and healthiest in the world. Australia is renowned as a producer of fresh, healthy and natural food and wine from its clean water, clean air and clean soil. Least effective article The Australian Wine Australia: A great place to visit Research Institute

Recent research has shown Australia to have the best and most accessible beaches for tourists. In a major poll of travel agents in 2012, Australia was listed as one of the most beautiful, relaxed and friendly places to visit.

The Australian lifestyle is focused on the outdoors due to the great climate and ocean surrounding major cities. The sunny, warm weather for most of the year has led to a modern and easy-going population eager to entertain visitors. Outdoor cafes and restaurants are everywhere, so people can relax while viewing the natural attractions and plan their visit to many interesting places the country has to offer. Choice experiment: 8 label styles The Australian Wine Research Institute

Modern Prestigious Stately Modern Classic Contemporary Choice experiment: 8 label styles The Australian Wine Research Institute

Modern Elegant Vibrant Contemporary Eclectic Light Hearted The Australian preference Research Institute

Elegant 0.19 Prestigious 0.12 Light hearted 0.12 Stately 0.11 Eclectic 0.04 Modern classic 0.03 Modern contemporary 0.03 Modern vibrant 0.00 The Australian Wine Label association exercise Research Institute

Stately Authentic Traditional Safe Classic Mainstream Reliable

Light Hearted Healthy

Inexpensive I like this label Uninteresting Informal Prestigious F2 (26.90 %) (26.90 F2 High quality Modern Vibrant Modern Classic Prestigious Elegant Contemporary Elegant Upper class Cheerful Imaginative

Modern Eclectic Modern Contemporary

F1 (39.34 %) The Australian Wine Stage 2 Research Institute

RESULTS After ~10 days Attribute importance – Stage 2 vs. Stage 1 The Australian Wine Research Institute

50 Country Preference Attribute importance (%) 0.70 40 0.60 Stage 2 30 0.50 Stage 1 0.40 20 0.30

10 0.20

0.10 0 Price Store Country 0.00Expert Label Grape Medal Closure rating rating China Italyvariety France Australia The Australian Wine Who were the consumers? Research Institute

 Local residents, Chinese ethnic group  Living in Beijing, Guangzhou and Shanghai, minimum n=500 per city  Buyers of imported wine (at least once every 6 months)  Drink grape red wine at least once per month  40% female, 60% male The Australian Wine Consumer profile (n=1670) Research Institute

Age 57%

37%

6%

18-30 31-45 46-65 68% Household income

20% 3% 8%

RMB 4,000 - RMB 6,000 - RMB 8,000 - > RMB 10,000 5,999 7,999 9,999 Consumer profile (n=1670) The Australian Wine Research Institute

How long drinking red wine?

45%

31%

19%

5% 1%

Less Than 2 2-5 years 6-10 years 11-20 years >20 years years Grape red wine purchases in the last three The Australian Wine months Research Institute

Argentina 3% SAfrica From... Spain 2% 3% How much? (%) Chile 5% 20 19 US 18 5% China 24% 15 15

Italy 13 12%

France 24% Australia 22% Where did they buy wine in the past 6 months? The Australian Wine Research Institute

Wine shop 86%

Hypermarket 85%

Shopping mall 58%

Internet 53%

Duty free 51%

Overseas 26%

Supermarket 25%

Distributor 22%

Discount supermkt 17%

Corner shop 6% Grape red wine is good for my health 97%

The Australian Wine Drinking wine makes me feel sophisticated Research Institute 95%

Wine makes a great gift 95%

I always pay great attention to the flavor of the wine I am drinking 94%

I like to try new and different wines 89%

I prefer to drink wines recommended by friends 85%

I like to drink wine to get a buzz. It makes me feel good 85%

I don’t mind purchasing wine that has a screw cap closure 84%

You can buy good wines without spending a lot of money 69%

I think of wine mostly for drinking with dinner 67%

Sometimes I am overwhelmed by the variety of brands there are … 62%

The best wines are always the most expensive 57%

I generally buy brands of wine that I know 56%

I consider wine an everyday beverage 55%

I don’t like to open a bottle when I am by myself 43%

I typically only drink wine while entertaining guests 33%

Wine is too expensive to enjoy very often 18% 0 50 100 The Australian Wine Research Institute

Influence of taste The Australian Wine Price Research Institute Code RMB NV Great Wall Cab-Mer 99 05 Changyu CabGern 207 05 Changyu Castel 368 French, 08 Triennes Provence 231 Chinese, 100-400 RMB 09 Guigal Rhone 231 Australian 10 Rothschild Legende 350 10 Chateau Peyre-Lebade 363 Different styles and 12 SEA Shz-Cab 132 14 red wines trained awareness 10 Coonawarra Cab 188 Sensory levels evaluation & 10 South Aus Cab 208 Consumer 10 Barossa GSM 248 test 11 MargRiv Cab-Mer 290 10 Yarra Shz-Vio 331 11 Barossa Shz 396 Chinese trained panel: 11 assessors The Australian Wine Wine sensory map PC1x2 Research Institute

08 Triennes Provence

Peardrop Tongue Tingling

Yellow Salty (F) Throat warming (Mf) Transparent 09 Guigal Rhone 10 Coonawarra Cab Alcohol (F) Drying (Mf) 11 MargRiv Cab-Mer 10 Yarra Shz-Vio NV Great Wall Cab-Mer Hawthorn Astringent (Mf)

Woody/Cork Bitter (F)

05 Changyu Castle Pickled cucumber 05 Changyu CabGern Sour (F) 10 Peyre-Lebade Overall flavour intensity

F2 (13.68 %) (13.68 F2 Dried longan Smokey/bonfire 11 Barossa Shz Smooth (Mf) Woody/Cork Boiled sweet corn (A) Body (Mf) 10 Rothschild DBR Confectionary Legende Woody/Old furniture Dried red date Red Purple Candy fruits Vinegar Black currant 10 Barossa GSM Overall fruity (F) Sweet 10 South Aus Cab 12 SEA Shz-Cab

F1 (36.43 %) Wine sensory map PC1x3 The Australian Wine Research Institute Overall fruity Pickled cucumber (F)

Waxberry

Woody/Old furniture (F) 05 Changyu Castle Dried longan 10 South Aus Cab 05 Changyu CabGern Stale 09 Guigal Rhone 10 Peyre-Lebade Yellow 10 CoonawarraConfectionary Cab Astringent (Mf) NV Great Wall Cab-Mer Sour (F) 08 Triennes Provence Drying (Mf) aftertaste intensity Transparent 11 MargRiv CabMer Bitter (F) Alcohol (A) 12 SEA Shz-Cab Ov aroma intensity Smooth (Mf) Sweet Purple (Ap) Ov flavour intensity 10 Rothschild DBR Alcohol (F) Woody/Cork (A) Boiled sweet corn Glossy (Ap) Body (Mf)

F3 (11.41 %) (11.41 F3 Dried red date Smokey/bonfireThroat warming (Mf) 10 Barossa GSM 11 Barossa Shz

Fermented bean curd

Spices/white pepper

10 Yarra Shz-Vio

F1 (36.43 %) Sensory experiment: Consumer test The Australian Wine Research Institute

 304 imported red wine consumers from Shanghai and Beijing  14 wines assessed over two sessions  Presentation of wines:  blind (3-digit code)  Informed (picture of and price)  Consumers rated overall liking and purchase intent for each wine

Overall Liking and Purchase Intent

The Australian Wine Informed (total population) Research Institute

8 85%

Liking informed

7 80% Pintent informed

6 75%

5 70%

4 65%

3 60% Overall Liking Informed The Australian Wine (total population) Research Institute

 Positive drivers ₊ Price (highest) ₊ red colour ₊ astringent, drying, throat warming ₊ woody/cork, glossy appearance  Negative drivers ₊ salty ₊ yellow colour ₊ dried longan, vinegar aroma ₊ sweet flavour, sweet confectionary aroma

 Country effect: Aus and France sig more liked than China

Informed liking The Australian Wine Research Institute

₊ price (most important) ₊ woody/old furniture, Liking Liking Cluster 1 woody/cork, dried

longan, hawthorn (29%) ₋ dried red date ₊ Chinese wines

₋ vinegar aroma Fr+Chi>Aus ₋ sour and sweet (unbalanced wines)

₊ astringent, drying ₊ glossy appearance ₊ Price Liking Cluster 2 Liking Cluster 3 ₊ sweet aftertaste ₊ glossy appearance (41%) ₋ salty /salty (29%) ₋ dried longan ₊ Blackcurrant, ₊ dried red date aftertaste ₋ confectionary woody/old ₋ yellow colour ₊ woody/cork aroma furniture (smaller Fr+Aus>Chi ₋ salty taste ₋ Hawthorn (small influence) influence) ₋ Chinese wines Aus>Chi What are the factors influencing choice The Australian Wine for Chinese consumers? Research Institute

 Ratings and shelf communication – really important o Store rating (99 points): most important  Price 4th most important attribute when choosing a wine: RMB 130 to 190  Low importance of label style with modern designs disliked  Although 80% of consumers buy at least half of their wines under cork, Closure was the least important attribute  Reading an article about Australia increased considerably Australian market share, even after 10 days  Showing Chinese consumers that they prefer the taste of Australian wine is an effective way to increase Australian market share

Conclusions: Chinese usage and The Australian Wine attitudes Research Institute

 Australia in the top three most consumed wines • 24% China, 24% France and 21% Australia  One third of the wine consumers have been drinking wine for less than 5 years  Wine shop (86%) and Hypermarket (85%) are the most common sources of wine  Only half of consumers consider wine an everyday beverage (no changes since 2008)  Health and sophistication most important reasons to drink wine

Taste Liking Conclusions The Australian Wine Research Institute

Informed • Price very important • Cluster 3 (30%) not driven by price (lowest knowledge) • One stable cluster: similar drivers informed and blind (plus price) • No significant correlation between blind and informed liking or Pintent (p=0.43) • Total sample of consumers: 11 Barossa Shiraz most liked, Great Wall 3 Stars least liked The Australian Wine Thanks to: Research Institute

Armando Corsi, Ava Huang and Svetlana Bogomolova – UniSA Danna Li, Fang Tang, AWRI James Gosper, Willa Yang - Wine Australia Richard Angove – Angove Kate Lattey, Sladjan Maksimovic – Premium Wine Brands Tom Lynar – Tyrrell’s wines Clare Flintoff – Nick Yap, Jakub Rys – Australian James Wilson – Accolade/Casella Wines Brooke Halkett – Lion Nathan Anna Lawrence – McWilliam’s Wines Tragon Corporation and Toluna Caster Loose - Carsten Loose Sonicart This project is supported by Australia’s grapegrowers and winemakers through their investment body, the Australian Grape and Wine Authority, with matching funds from the Australian Government. The AWRI is a member of the Wine Innovation Cluster in Adelaide, .