Shanxi takes on wine world
A wine-loving businessman's pet project - to attempt production of international-class wine on the mainland - has exceeded his wildest expectations.
In less than five years, Grace Vineyard, located in out-of-the-way Shanxi province has not only turned into a profitable venture, it also is producing vintages that are being accepted on to the wine lists at the Peninsula and Shangri-la hotels.
It is a remarkable success story, especially given the challenges of setting up a vineyard from scratch in such a hardscrabble region.
The idea first came to C.K. Chan, chairman of the family-owned infrastructure and property builder Origin, after he developed a taste for fine wine on his regular business trips to France in the 1980s and '90s.
'My father traded a lot with the French, and became very good friends with one of his regular contacts. When my dad went to visit they always had a glass of wine, and he decided it would be great to have a winery' says Mr Chan's daughter, Judy Leissner, a former investment banker who has taken charge of the vineyard project.
If Bordeaux could produce the world's most sought-after wines, he reasoned, surely Shanxi province, roughly on the same latitude, also could make a decent drop?
Inspired by the notion, around a decade ago, when semi-retired, Mr Chan began devoting his energies to the project. He built a grand, French-style chateau in the Yellow River region, imported vines, equipment and barrels from Europe, and hired a French winemaker.
The father-daughter team has had the satisfaction of subsequently seeing the wine earn favourable critical reviews, and more importantly, get stocked at high-end restaurants, hotels and bars, as well as stores in Beijing and Shanghai.
The company also has a collection of small stores around the country in affluent cities such as Shanghai, Foshan, Guangzhou, Shenzhen and Xiamen that target occasional wine-buyers, mostly people who would purchase a bottle as a gift, or for a special occasion.
Grace, which took US$5 million to start up, now makes an operating profit, although the company is reluctant to divulge the precise figure. There also are plans to build a second vineyard.
'We are small and very different to existing Chinese wineries,' says Mrs Leissner, 29, who is company president. 'We produce 500,000 bottles a year compared to the 100 million bottles of the major producers such as Great Wall, Changyu and so on. We are serious about wine.'
For Mrs Leissner, the project was originally a fun and challenging diversion from her role as president of the parent company, Origin, with its US$100 million annual turnover. But Grace has metamorphosed into a job that occupies 70 per cent of her time.
The local provincial government is equally enthusiastic about having an international player in its backyard, insisting that Grace vintages are served at all local official banquets and that the company's wines accompany trade missions at home and abroad.
The cadres also drop none-too-subtle hints that Grace should crank up the production volume, so more tax revenue can find its way into the government coffers.
That is not about too happen. 'We don't go for volume,' Mrs Leissner says. 'We are serious about wine. What distinguishes us from other [mainland] wineries is quality.'
The Grace range includes cabernet sauvignon, cabernet franc, cabernet merlot, chardonnay and chenin blanc, with plans for sauvignon blanc. The French winemaker who began the project has been replaced by Australian Ken Murchison, meaning future vintages will have greater New World influence.
Few people in Shanxi itself would be able to afford even the cheapest, HK$68 wine in the range; peasants living nearby would need to splurge several months' wages to buy the top-of-the-shelf Chairman's Reserve, that retails for HK$488.
'Wine is here to stay in China,' says Mrs Leissner. 'You don't need to teach people how to enjoy life: when they have money, then they will learn how to do it very quickly.'
The extended Leissner family often combine work and pleasure, with regular visits to the spacious Grace property several hours' drive from the nearest city, Taiyuan.
'I like to take the kids to the vineyard, it means they now know that apples come from trees, not the fridge,' adds Mrs Leissner, who has two children Anastasya, four, and Angelina, two.
'It is a lot of fun, very different to the main business, which is power plants and waste water and property. I go to restaurants as part of the job, and people recognise me from interviews I have done on television. It has added a lot of colour to our lives.'