China Wine Barometer – Wave 3 INTERIM REPORT to AUSTRALIAN GRAPE AND WINE AUTHORITY Project Number: USA-1202 Investigators: Dr. Armando Maria Corsi, Dr. Justin Cohen, Prof. Larry Lockshin Research Organisation: Ehrenberg-Bass Institute for Marketing Science – UniSA Date: 04/11/2014 1 Table of contents Executive summary 3-4 Research overview 5-9 Methods 10-13 Results: 14-57 Awareness 14-23 Wine country perception 24-43 Mental availability 24-26 Commercial versus premium 27-30 Strengths and weaknesses 31-41 Summary of relative country positioning 42-43 On-premise choice drivers 44-45 On-premise consumption behaviour 46-51 On-premise repeat purchase patterns 52-57 Recommendations 58-60 2 Executive summary (1/2) 1. In terms of awareness, red wine continues to be dominant with marked growth by sparkling wine, slight improvement in white wine and rosé, a slight decline in Champagne. 2. The awareness for the largest category in China, red wine, is lead by France, followed by China and 3rd position is traded between Italy and Australia with Australia tending to outperform in Tier 2 cities. 3. Chengdu has markedly lower awareness for Australian category across the 9 cities surveyed. 4. The quintessential bottle of imported wine in the mind of Chinese consumers is a French, Bordeaux, Cabernet Sauvignon sold at less than $ 40 AUD. 5. France is dominant in mental availability having the broadest and highest magnitude of associations in Country Wine Perception (CWP) measurement. 3 Executive summary (2/2) 6. Wine style is the largest driver of perception followed by distinctiveness, except premiumness is 2nd for ‘old world’. 7. France, Italy and Spain have premium perception with China viewed commercial, however perception is balanced for ‘new world’. 8. Australia is recognised as fashionable, easy to drink and good tasting red wines coming in likable varieties; however, France is recognised for elegant red wines suitable for fine dining and gift giving coming in likable varieties. 9. Restaurant is leading format for wine consumption followed by pub/bar trade, bistro/café and at friend’s house, suggesting there is more opportunity for home entertaining. 10. French and Chinese wines are most purchased wine countries with Australia securing higher than expected repurchase, suggesting satisfied drinkers. 4 Research overview 5 This research This report presents the findings of the third wave of the AGWA funded project “The China Wine Barometer (CWB): A look into the future”. Previous CWBs compared analyses with Wine Intelligence’s Vinitrac® for China with methods used by the Ehrenberg-Bass Institute for Marketing Science to track wine preferences and attitudes. This phase of the project is complete. This wave of the CWB reports only the CWB measures focusing on Chinese wine consumers’ awareness, attitudes and perceptions about wine and their specific attitudes and behaviours in the on-premise sector. The data was collected in March-April 2014. 6 Who we surveyed (n=1012) The sample obtained is socio-demographically representative in terms of age, gender and income of the upper-middle class urban population aged 18-49 living in Beijing, Shanghai, Guangzhou, Chengdu, Shenyang, Wuhan, Shenzhen, Hangzhou, and Chongqing who drink imported wine at least twice a year. The respondents are characterised as follows: • Cities: 37% Shanghai, 12% Chengdu, 11% Beijing, 11% Guangzhou • Gender: Male 67% – Female 33% • Age: 45% are 30-39 • Income: 52% > RMB 10,000 (~ AUD 1800) a month; 80% > RMB 7,000 (~ AUD 1300) a month • Academic degree & English speaking: ~ 80% The data collection has been expanded to cover 3 more cities in order to capture with greater reach the evolution of wine consumption in China. 7 Snapshot of sample 8 Reporting approach The first section of the results presents the wine awareness of Chinese consumers. This is followed by four sections that build in greater detail on the Wine Country Perceptions (WCP) of Chinese consumers. The structural composition of each wine country’s mental availability as well as categorisation by commercial versus premium perceptions are provided. Finally the Strengths and Weaknesses of each country are presented. The final sections of the results present the Choice Drivers and Consumption Behaviour specific to the on-premise sector. Reporting is based on conventional market research techniques. However, three methods, Pick-Any, Best-Worst Scaling and Retrospective Recall, that have the potential to add further insight and are part of the Ehrenberg-Bass Institute tool kit, are applied and described in further detail in the following slides. 9 Methods 10