This is how we roll...or choose not to move...for most of the day...in Mui Ne
I wrote this article a while ago, had it lying around gathering computer mites and whatnot, so I thought I might as well stick it up here. Even though it’s quite old, most, if not all of it, is still relevant to the country today. I’m especially a fan of Jim Cawood’s philosophy on wine and the trends in the market. He has a regular column in AsiaLife, and his wine boutique Vino (74 Hai Bai Trung) stocks a small but exclusive range.
In a country synonymous with downing cheap, freshly brewed beer and shots of homemade rice alcohol those involved in the wine import industry in Vietnam are collectively waiting for the local market to make the shift from a beer, whisky and brandy-orientated society to one appreciative of quality wines at reasonable prices. The recent economic downturn which has led to uncertainty in the market, however, may lengthen the wait even further.
Surprising to many, Vietnam has a vastly competitive wine import industry, but a schism exists which may take patience and energy to change. On the one hand, the country has a thriving expatriate and tourist wine market, with mid-range to top-end wines from all over the world being sold at five-star hotels, restaurants and boutique stores such as Vino, Red Apron and the Warehouse, usually with US dollar price tags. Yet, the dichotomy of the market presents itself when one looks at the massive, untapped local Vietnamese clientele that traditionally are male beer and spirits drinkers.
Change is the constant in both markets. Within the expat and tourist market, there seems to be a move away from French and Italian wines towards Australian, Chilean and other “New World” wines. Although finding the terms “Old World” and “New World” wines derogatory, Jim Cawood of Vino – preferring the terms traditional and modern wine-making methods – explains this shift.
“The market has changed”, he says. “The philosophy of modern wine-making and the whole process is done in a more scientific way. The styles of the wines are more approachable and young and that’s what Vietnamese people like to drink and they’re just starting to realise that now. French wine is taking a beating because they spent so long dumping bad wines in the market.”
Jim, with sixteen years experience in the wine business, says that Australian wine is shaking off its label as “cheap plonk” in the export market. “It’s so far from the truth of what Australian wine, and Spanish wine, is as well. Spain is probably the most dynamic wine country around.”
Guillaume Blanchard of Celliers D’Asie, one of the main importers in Vietnam, has similar sentiments regarding which wines are becoming vogue.
“’New World’ wines are increasing, especially from Chile and Argentina, they are more competitive and affordable, as the quality is evident and they’re crowd-pleasing wines,” he says.
Nikolas Prehn, General Manager of the Asia-Pacific branch of Rudolf Prehn GMBH, Spanish wine specialists and distributors based in Hong Kong, likens the foreign market in Vietnam to a well-established Western market, with buyers deciding on price and quality.
“Many of the top hotels have well-trained foreign wine buyers, such as Juan Costa Ribas from the Caravelle, who will strive for a diverse high-quality wine-list covering all the major wine producing countries,” he says.
It seems as though the foreign wine market is highly competitive and also saturated. With a number of wineries, suppliers and distributors trying to get a foothold in the market, especially in the mid- to top-end range, for smaller brands trying to establish themselves it is proving to be difficult.
Maria Noble, Vietnam’s representative of the Grupo Garvey, a Spanish distributor to local import clients, explains the problem. “The problem with targeting the foreign or expat market is that, for example if you go to a place like the Park Hyatt or the Caravelle, they have, say 70 wines, and the chance that they are going to choose your wine is so small, unless you do a lot of marketing,” she says.
Maria says that: “With wine, unlike spirits, the margins are not that big and there are many, many offers so actually, unless it’s a really huge international brand, promoting one brand is not really worth it.”
Jim of Vino agrees that this market is probably oversupplied as you can get wine from anywhere in the world. “The market is getting bigger, but in my opinion a lot of that is being driven by the importers. I don’t think the food and beverage side of the trade is really pulling along the market so much. Getting those wines out there and into the marketplace and getting people to try them requires someone to sell them,” he says.
“There’s a million people knocking on my door trying to get me to buy wine from overseas, but then it sort of hits a bottleneck when it gets to the restaurant because there’s no-one really selling wine and that’s a really important part of the whole market,” he says, referring to the limited number of places with extensive wine-lists. He says: “No-one wants to have too much money tied up in wine sitting on the shelf, but I’m also a firm believer, as far as restaurants go, the more wine you have, the more you sell.”
All seem to agree, however, that the market is expanding, yet there are also a number of setbacks, not least of which deal with the logistics of importation and the imminent recession which can play a large role in both markets and it is still uncertain what the long-term effects thereof will be. Similar to restaurants and retailers, suppliers are not going to overstock so the distribution and supply side is always on the limit, says Guillaume of Cilliers. He lists a number of problems, from traffic jams in Europe that cause a cargo of wine to miss the ship to Vietnam, to customs officials running out of tax stamps on a Friday afternoon at the docks and waiting until the next week to unload the wine.
“That’s why people work with suppliers and don’t import themselves. People want to work with distributors who are reliable, that can bring in the product on a regular and consistent basis, and can find winemakers and that have reputable brands,” he says.
Logistics are not the only hurdle to surmount, however. Fluctuating currencies, method of payment, as well as taxes also cause importers to have sleepless nights. Taxes range upwards from about 60%, depending on import agreements and the level of alcohol. Maria Noble says that at the moment the euro is very strong so a bottle that could sell for about one euro in France or Spain could reach a retail price of six or even eight euros in Vietnam if the importer wants to realise a decent profit.
Regarding the industry, the potential definitely lies in the unexploited local market, which is slowly but indubitably moving towards a Western-style wine culture. Most experts in the industry will tell you that this is where the long-term growth of the Vietnamese industry lies.
Yet, at the moment the Vietnamese wine-drinking mentality seems to be more status-orientated than genuinely wine-appreciative. Maria says currently Vietnamese are buying wine “by the look of the bottle”. “They pay attention to the label and the shape of the bottle. The main things, are presentation, price and product in that order,” she says.
“The market is so fashion-orientated here,” says Guillaume, “and some people just like to walk around holding a glass of champagne, it’s a status symbol.”
Jim Cawood agrees: “Expats look for something that’s good value, from a Western point of view, trying to find a bargain. That’s our mentality, whereas a Vietnamese person’s mentality is ‘does it look like it costs a million bucks?’ because that’s important. It’s got to look expensive, it’s got to be expensive. Still, for Vietnamese people at the moment wine drinking is a lifestyle upgrade.”
“That’s why whisky is so popular,” Jim says. “It has known value and it looks expensive. Champagne can do similar things, because it has known value.”
It takes times to turn things around, however. Nikolas Prehn says that, in his experience, it takes three to five years for a market to turn. “In other words, as incomes increase, the Vietnamese palate is exposed to more and more wine and will eventually learn to choose on quality rather than on the basis of shiny golden labels. We have seen the same happening in recent years in Singapore and Hong Kong and in the 1980s in Germany and the UK. I am confident that Vietnam, in five years, will have a growing, diverse market for wine.”
Everyone is trying to get their slice of the pie, yet it’s not easy. According to Guillaume, whose company’s current market share consists nearly solely of the foreign market, the answer lies in awareness and education. He says it’s different to spirits where you can spend a lot of money on promotion.
“Wine takes a bit more time, you have to get the trust of people, you have to teach them how to appreciate wine and that’s the goal right now. Working, doing trainings on a monthly basis at different establishments, holding, perhaps, tastings but not with the expats, with the local Vietnamese and getting in touch with them. Finding that connection and bridge is the challenge,” he says.
Jim espouses a more natural approach to things. “Essentially, at the moment everyone is waiting for the switch away from whisky towards wine. Everyone’s really pushing the market to try and grow as fast as it can. Which is good, but it can only grow in an organic sort of way. You can’t create a market in the same way you can for beer or whisky because wine is about choices and having lots of choices and not about promoting brands necessarily.”
Maria also thinks the future lies with the local consumers. She says that seven years ago when she arrived in Vietnam, there weren’t a lot of wines. “Now there is a lot. For the foreign market it’s difficult because it’s very competitive. But I think there is enough of a Vietnamese market for everybody,” she says. It seems that with a bit of patience as the country’s economy struggles through the economic downturn, wealth distribution grows, and a slight push in wine education, Vietnam’s wine-drinking future could well head in the right direction, with the search for wine-knowledge and appreciation being the driving forces for the industry’s growth.
*Photos courtesy of Nicholas Prehn
Vacancy: World leader. No qualifications required.
Capitalist seeks happiness. Will sell wife.
Angry axe needed. Heads will roll.
Seeking choir boy. Good voice unnecessary.
Party in jungle. Shrunk my head.
Indian binge. Curry will return…Viciously.
Door would not open. Tried windoooooooow…
He tortured her thoroughly. Good wage.
Shapeshifter seeks mate. Come as yourself.
Does it turn you a darker shade of green? It should and if it doesn't you're a heartless, jaded and cynical person whose time on earth is best spent ruminating in your basement, burning effigies of your boss and throwing darts at a blown-up, vandalised photo of his face.
Waking up to a cup of kopi in a wooden stilt house built out over the Celebes Sea on Pulau Mabul, wondering which tropical island’s world famous coral reef or sand bottom to snorkel or scuba.
Watching colourful and weird fish you’ve only ever seen in aquariums, white-eyed moray eels and giant green turtles, all from the comfort of your balcony or kicking your feet up, with a smuggled 26-peso Filipino Red Horse beer and a game of cards.
Or just throwing your towel on palm tree-clad Pulau Sibuan with a good book and only being disturbed by one of the island’s 20 inhabitants asking if he could fetch you a coconut from 50 feet above your head.
Or being 50 feet under the water off Pulau Sipadan floating in an outer-space-like world with reef sharks and prehistoric turtles the size of little cars, with nothing above but bubbles and below 600 metres of murky, inky wetness.
So, we didn’t get to touch an orangutan. They keep those funny primates a good distance from tourists. We didn’t climb Mount Kinabalu. We didn’t get to white-water raft the renowned rapids of the Padas River. We did, however, get what we came for: a good tan and the kind of holiday which I can recommend to anyone looking to get as far from stinky Saigon as possible.
