Brian Hollowaty plans to bring his grape-growing finesse to China. But for now, his wine export business is booming thanks to the Chinese market and he's looking for investors to help him build it even more.
Hollowaty is president and co-founder of Pasadena-based Beverly Hills Purveyors, which ships most of the wine from his Paso Robles vineyard to China. The company has five employees and Hollowaty expects $1.5 million in revenue this year. He launched it 18 months ago after learning about China's emerging middle class while he was there working on mergers and acquisitions for Pasadena-based China Global Ventures during the first part of the decade. Ninety percent of the company's bottles are now hitting Shanghai shelves.
"Imported wine is seen as very classy and sophisticated in China," Hollowaty said.
But it might be more challenging than he believes, one expert said.
Joseph Rollo, director of the international department at Wine Institute, a San Francisco organization that tracks wine imports and exports, said imported wine sales in China are limited to urban markets with wealthy residents.
"There aren't that many importers that are looking for new brands and that have experience," Rollo said.
Wine exports from the U.S. to China grew by 63 percent in 2007, and 74 percent in 2008, according to the Wine Institute.
Challenges include exorbitant freight costs and complications at customs.
"I hear horror stories about U.S. wineries and companies that sell to Chinese companies and have problems getting their payments, counterfeiting problems, rebottling," Hollowaty said.
Exporters will also have to be patient while the Chinese navigate the wine learning curve.
Hollowaty was hoping to impress a famous opera singer with a selection of the company's premiere wines at a Shanghai dinner, but everything seemed to go wrong. "The wait staff ended up breaking the corks off of two bottles of wine," he said.
In another awkward moment, a client scoffed at a bottle because he didn't think it was expensive enough to be good. Hollowaty said the notion that you can get quality at a bargain rate hasn't taken hold there.
But there are advantages to being a wine seller in China. Raising your glass is a big thing there, Hollowaty said.
"At a lot of my business meetings over the past five years, you might go through four or five bottles per dinner," he said. "They do a lot of toasting."
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