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Southeast Asia’s Growing Wine Industry: Trends and Highlights

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For the last decade or so, East Asia has dominated the Asian wine market in terms of wine production and consumption. China leads the pack as the only Asian nation to make it to last year’s list of top 15 wine-producing countries. While China’s unprecedented expansion of vine area has helped cement its status as an Asian wine colossus, industry insiders are also seeing tremendous promise in a plethora of Southeast Asian wine countries.

With its flourishing wine markets, particularly in the upmarket sector, it’s easy to see why experts are calling Southeast Asia the ‘most exciting’ destination for wine. Practically all the countries in the subregion are citing growth in their local markets as more and more residents develop a taste for the tipple.

China’s austerity drive also plays a factor in the overall market growth. As the campaign brings a decline on sales growth for the luxury sector, foreign investors are flocking to Singapore in a bid to revive flagging sales. Along with a myriad of other factors, this influx of international businesses has helped bolster the Southeast Asian wine trade. Singapore Wine Vault investigates the 2015 trends, highlights, and progress of the subregion’s fast-growing wine sector.

Wine consumption in Southeast Asia continues to rise

The Southeast Asian market has always been one of the trickiest markets for wine and spirits. With approximately 40 percent (%) of the subregion’s population being practicing Muslims, industry growth is generally limited to tourists, expatriates, and the other 60% of the Southeast Asian populace.

Despite this primary limitation, industry specialists are seeing a rise in alcohol consumption across the entire subregion. Topping the list is Vietnam, which has an annual beer and wine consumption of 6.6 liters per capita. The country spends about US $744.2 million a year just for wine. In Thailand, the local wine trade is also flourishing as more and more consumers develop a liking for the liquor. The country’s expanding vineyards are upping the accessibility of wine for local drinkers, making the tipple an everyday option.

As for Singapore, the city-state is quickly becoming the main wine hub in Southeast Asia. Its large number of foreign investors and growing infrastructural support for the local wine industry encourages enthusiasts to explore the country’s wine selection. While predominantly Muslim countries like Indonesia and Malaysia are also experiencing growth in their relatively small, but competitive wine markets.

Driving the demand for wine in Indonesia are the affluent constituents and yuppies who have incorporated wine into their lifestyles. The growing number of wine tasting events, trendy wine bars, and domestic breweries has definitely benefitted sales in the country. Malaysia continues to be a strong importer of fine wine from various ‘new’ wine producers. Last year, Australian wine dominated sales in Malaysia’s local wine sector. As for the Philippines, the largely beer-consuming country’s wine trade is predicted to have a total volume CAGR of 8%  from 2013-2018.

Though red wine remains an easy favorite for most Southeast Asian countries, this trend is expected to change with the population’s growing exposure to other fine wines.

Southeast Asia’s vineyards continue to expand with growing interest in locally-made wine

There was a time when the subregion’s tropical climate posed a problem for local vine growers and wineries. But with the Southeast Asian wine industry’s growing knowledge in modern viticultural practices and wine storage techniques, we’re seeing the establishment of a growing number of vineyards throughout the region.

In Indonesia, for example, you have the country’s main winemaker, Hatten Wines, producing tipple from its base in Bali. Vietnam’s vineyards, on the other hand, can be found in its various provinces, including Dalat and Ninh Thuan. Myanmar is growing the bulk of its wines in the loftier regions around the lakes of Inya and Inle. Two of its more prominent wine estates, Red Mountain Estate and the Aythaya Vineyard, are found in the Shan state. Thailand is currently producing world class vintages from its major wineries in Loei, Khao Yai, Samut Sakorn, and the surrounding areas of Chiang Rai.

In the recent years, we’ve seen considerable growth in the demand for locally made wine. To address this demand, wine groups are looking to expand operations in Laos, particularly on the Plain of Jars and the southern region of Pakse.

Southeast Asians are learning and loving the language of fine wine

One of the key Southeast Asian wine trends for 2015 is a growth in fine wine consumption.  So far, this prediction has been spot on. As many of the subregion’s countries experience stability or growth in their economies, an increasing number of wine drinkers are trying out luxury wines. Vintage wines, particularly of the Bordeaux kind, have become increasingly popular over the last couple of years.

Apart from drinking fine wine for special occasions, the affluent members of the subregion’s population are using these wines as giveaways and holiday gifts. But we believe the real market for the bulk of these fine wines lie in the growing interest in wine collection. While the extremely rich in the countries of Indonesia, Malaysia, and Singapore remain extremely small in number, their thirst for vintage wines has proven to be immense. Wine cellar favorites include aged tipples from the 1980s to the 1990s. There’s also a pretty good market for 2001, 2002, and 2004 wines, while 2000 and 2005 vintages have a smaller following.

Singapore slated to become the new Asian wine hub

Though Hong Kong has long been regarded as Asia’s hottest wine market, the growing number of international companies setting camp in Singapore has the state-city poised to become the next Asian wine hub. Wine merchants like Berry Bros. & Rudd and Corney & Barrow have established headquarters in the country hoping to tap into the booming wine trade. With more and more of the country’s millionaires investing in ‘liquid assets,’ and their wealthy neighbors from Indonesia following suit, this business move by both London-based companies is appearing to be an immensely lucrative one.

Singapore Wine Vault provides shelter for SE Asia’s liquid assets

Another reason why Singapore is emerging as the wine hub for Southeast Asia is the country’s stellar wine storage services. When Singapore Wine Vault opened last year, the subregion’s top wine enthusiasts were set abuzz at news that the 750,000 square-foot vault could hold up to 10 million bottles. The fact that the company also offers bespoke wine cellar facilities is an encouragement for connoisseurs to continue expanding their collections of liquid assets. With these services available to virtually all wine collectors in the subregion, we’re bound to see the continued surge of sales for the wine industry’s upmarket segment.

With the way things are going, we expect the Southeast Asian wine market to continue this upswing through 2015. The emergence of new vineyards in the subregion will also play a major role in the population’s continued interest in wine culture for the next few years.

This article was published by https://www.singaporewinevault.com/.

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