Premium South African producer signs distribution agreement with China’s largest importer
DGB looks to China as the interest in ‘New World’ wines in this market grows
With the increasing demand in China for quality imported wines, DGB Pty Ltd, South Africa’s largest independent wine, spirits and craft beer producer, today announced it has secured an exclusive distribution agreement with COFCO (China Cereals, Oils and Foodstuffs Co-operation). The COFCO Group is China’s largest importer and exporter in these fields. The agreement will see COFCO now operate as the South African producer’s sales, marketing and distribution partner with very ambitious marketing and growth plans.
According to the agreement, COFCO will in the initial phase exclusively import and market DGB brands Boschendal and Tall Horse, with the expectation to later expand the portfolio with other brands from the DGB wine stable.
DGB intends to focus a lot on this dynamic market and the agreement with COFCO is a huge boost for their plans in China. Apart from its standing in the foodstuffs division, COFCO’s wine division, COFCO Wine & Spirits is also one of the largest wine importers in China, and the owner of one of the major domestic producers, Great Wall.
China has become an increasingly important market for South African wineries:
China’s wine import market totaled 638 million litres in 2016 – a year-an-year increase of 15%, according to the Asian giant’s customs department – while import values grew by 16,3% year-on-year, amounting to $2,364-billion. Wine sales in China are predicted to grow by 39,8% over the next three years, leading the country to become the world’s second largest wine market after the United States – surpassing France and the UK. South Africa has seen its market share improving, as interest in wine in China starts to extend beyond “traditional” Old World wine producing countries. Mainland China is currently the biggest Asian market for South African wine by volume and the sixth largest export destination for the country.
Says Castle Li, General Manager of COFCO Wine & Wine: “We are proud to be associated with the well-respected South African industry-leader, DGB. Chinese consumers are showing increased interest in ‘New World’ wines, and we believe DGB, with its diverse portfolio, is well-positioned to provide in this need. The Boschendal and Tall Horse brands offer two of the great market drivers: value and reputable quality. We look forward to increase awareness and associated demand for these DGB brands in the market, and foresee a longstanding relationship.”
According to DGB’s CEO, Tim Hutchinson, COFCO's distribution and marketing strength in China will ensure the availability of DGB's brands across a diverse range of cities and channels, and bolster the image and growth of South African wines in China. Tourism numbers from China to South Africa are showing dramatic growth and this will give the country and our wines some excellent exposure.
“We are extremely excited with our new relationship with a strong, experienced and dynamic business such as COFCO. We have noted an increasing interest in the South African wine category as consumers are becoming more adventurous and willing to make new wine discoveries. We are confident that the quality, heritage and authenticity of our brands will resonate with Chinese consumers.”