With all the hype in Bordeaux about China over the past couple of years it’s easy to forget that Japan is an important market for Bordeaux. Japan experienced a red wine boom in the 1990s which bottomed out by 2005. From 2007 to 2011, imports of French wines to Japan fell by 8.71%. However the CIVB (Bordeaux Wine Council) reported this March that exports of Bordeaux wines to Japan increased in 2012 (an increase of 29% by volume and 28% in value). This year it seems there is also increased interest from Japan in the 2012 En Primeur wines.
The Japanese have long held a penchant for fine wines and today Japan has a broad base of wine connoisseurs who favour Bordeaux. These connoisseurs are those who began learning the virtues of wine in the 1980’s and 1990’s when red wine really took off in a big way. They are now a large part of the older population with disposable expenditure to purchase wines. The high prices of the 2009, 2010 and 2011 vintages put a lot of people off but now that some chateaux have listened to the markets and released their 2012 wines at sensible prices, a number of Japanese connoisseurs are being tempted to buy once more.
Japan’s economy is the third largest in the world and emerged from recession at the end of 2012. Analysts have credited Prime Minister Shinzo Abe’s stimulus measures with getting Japan’s economy back on track. He has focused on an aggressive monetary policy that has flooded the economy with cheap money, major fiscal spending and changes to make the economy more competitive. Yesterday government data showed that gross domestic product (GDP) grew at a robust annualized pace of 3.5% in the first quarter. Personal consumption, which makes up the largest part of Japan’s GDP grew 0.9%, as consumer sentiment brightened amid signs of an economic recovery. This could be why we are seeing renewed interest from Japan in Bordeaux fine wines.
Not all Bordeaux 2012s have caught the Japanese connoisseur’s eye – the ones attracting the most attention tend to be reasonably priced and are, I suspect, intended for drinking when bottled rather than to be added to investment portfolios. Whether younger Japanese wine enthusiasts will buy at En Primeur in the future is not certain – in recent years Japanese wine drinkers have used price as their dominant choice cue. Wine Intelligence data shows that 64% of regular wine drinkers don’t mind what they drink so long as the price is right (reflecting the long term economic uncertainty of previous years). Younger drinkers are becoming more involved with the market and are enthusiastic about discovering new wines. Red wine dominates and French wines lead the imported wines league table but Italian, Chilean, US and Spanish wines have the more impressive growth rates.
Bearing this in mind it seems that future growth of Bordeaux wine sales in Japan should be driven by entry level wines. It seems that Bordeaux has recognised this and the Union of Côtes de Bordeaux AOCs are reported to be travelling to Japan this month. The aim is to enhance the Côtes de Bordeaux’s reputation and improve their market presence in Japan. Bordeaux needs to recapture its traditional markets and although entry level wines may not have the prestige of the Grand Crus (or budgets) there are some excellent wines here that can be good ambassadors for Bordeaux.