Grape Potential

Through persistence and good relations, Miguel Torres has built his company into a key player in China's rapidly growing wine industry

Commitment to the long term has enabled Miguel Torres to build a thriving wine distribution business in China which now has annual revenue in excess of 20 million euros.

In more than 10 years of operating in China the boss of the Spanish wine giant has seen explosive growth. Torres now has branches throughout the country and his wines can be found on the menus of all major restaurants; a consumer-oriented subsidiary business, Everwines, was set up to cater for increased retail and Internet demand.

Early this year, Torres made his final China tour as general manager of the company before handing over the reins to the next generation.

He will count the thriving China business as one of his most important legacies; the Spanish producer-distributor first entered the market almost 15 years ago, when many big wine companies were wary of making serious commitments in a country where the wine-drinking culture was in its infancy.

Torres, whose family business has been in operation for four generations, has deep pockets, and a willingness to listen and learn, but had little practical experience of how business was done in China. Initially a joint venture was established, with mixed results. A decision to go it alone saw the company grow rapidly to reach its current status as the second largest foreign importer, with annual turnover of 22 million euros.

"We saw China as the future," recalls Torres, a slightly built man with an endearingly gracious old-school manner. "But when we first started to import our wines the market was very small and concentrated in Shanghai and Beijing. At first we had a joint venture where we sent wine and bottled it. That was not a fantastic success but it helped us grow. In 1997 we decided if we wanted to cover all China we needed to have our own company, so Torres China was established.

"The way of doing business in China was very different and we had to adapt. I remember experimenting by saying we will treat our partners as friends, and do everything like that, and it turned out to be a successful way of doing it; people became much more receptive.

"Looking back, I would not change anything. It was a very interesting and intensive period in which we actually lost a cumulative total of $1 million until the year 2004. But we stayed, and are now one of the key industry players in China. My advice is very simple: your own people are your most valuable asset and choose the right partners. For both to work well you need trust and mutual respect."

Torres made his valedictory visit to the nation early this year, looking up old friends and practicing the Chinese phrases he has learnt, having gone to the trouble of hiring a teacher to give weekly lessons at his Catalonian home.

The company now even has a China-made wine in its range thanks to a partnership formed with the local Grace Vineyard. The two parties are well known to each other; Grace wines are distributed by Torres but had never collaborated on producing a wine. In this case Torres provided the expertise, in the person of their wine-maker from Chile, taking advantage of the southern hemisphere off-season, and senior executive Mireia Torres Maczassek, who helped supervise the grape-growing and production.

"It is a good wine," Torres says. "There was nothing similar in China. There are many chardonnays and many sauvignon blancs but nothing like this, made from the muscat grape.

"I think Grace make the best wine in China. It sells out all the time so we figured we should work with them more. I asked my daughter to go and look at the winery and after that we decided we would make a white wine with them, Symphony. I hope there will be more co-operation.

"Like us Grace Vineyard is a family-owned company, and they think the same way we do. And you can see that in their commitment to making quality wines with 100 percent Chinese grapes and not blending them with imported bulk like many others."

Family protocol demanded that Torres retire this year at the age of 70 as general manager, although he will retain the title of president. His son Miguel Torres Maczassek has taken over as group general manager, and his daughter Mireia Torres Maczassek heads the Jean Leon and Torres Priorat companies as general manager.

There is no doubt that China will continue to feature prominently. While other markets are flat, or growing slowly, China wine distributors are still recording phenomenal growth of 20 percent or more a year.Recent figures from the French-based wine body Vinexpo put annual consumption at 1.1 billion bottles, still a minuscule figure per capita in a nation of 1.3 billion people.

But increased affluence and awareness means the number of wine-drinkers keeps on growing. The bigger cities such as Beijing and Shanghai have an ever-increasing collection of discerning oenophiles who are being targeted by Torres, and others.

Wine dinners, where visiting wine-makers push their products, are becoming increasingly common. Torres represents about 40 family-owned wineries, among them Baron Philippe de Rothschild, which has been a shareholder in Torres China since 2007. "We have a team of more than 280 excellent employees and managers who make things happen," Torres says. "And that is essential in a market with still a lot of potential, but of course also a lot of competition. There are more than 3,000 wine importers, of all sizes of course, and I am very proud to say that we are in the top 10 in the market, and the second among the so-called traditional importers.

"More and more Chinese are becoming wealthy and can afford good wines, and jewelry or whatever. There are also more and more Chinese traveling; they come to visit Barcelona and to the winery. People are more educated about wines. They want to learn more and to some extent globalization means that Chinese want to know more about the world and the European way of living, which includes wine, of course.

"We believe in China. We are sponsors for wine forums and have a lot of sommeliers attending our courses. We hold over 150 events in China every year. Our new consumer division has wine courses, wine tastings, wine dinners and home delivery."

As a long-time visitor to China, Torres has his own store of anecdotes about rather quirky local tastes. The habit of mixing fine wine with soft drinks, less common these days, was very much in evidence when the wine boss first started to visit, a custom that amazed and horrified him in equal measure.

He says: "I recall I was in a restaurant in Beijing with the Spanish ambassador, who pointed out that the people at the next table were drinking our flagship Mas la Plana. I had a look when I left and noticed that they were drinking it mixed with 7-Up."

For China Daily

(China Daily 03/01/2013 page29)