Claudia Masueger of wine shop chain CHEERS is the only person I know who returned to China with a raclette set for quarantine. You just can’t keep Swiss and their (melted) cheese apart.

In this wide-ranging Q&8, she covers the world wine situation, including how the pandemic, the war in Ukraine and climate change are impacting everything from shipping to bottle supplies.

Plus, how the CHEERS portfolio is adapting to changing consumers in China, including the addition of local natural wines, what those consumers should know about wines from her native Switzerland, the Chinese food she missed most and more. Check it out below.

You can also check out more Q&8s here. And previous talks with Masueger here and here.

1 This was your second time returning to China and being quarantined since the pandemic started. What did you bring this time versus last time?

Last time, my quarantine was in Shanghai for 14 days. This time, I was in Qingdao for 22 days.

I did bring three small bottles of wine in my luggage. I had one tiny bottle for each week. Growing up in a wine family, a glass of red wine with lunch and dinner is a habit and makes food more delicious, although in this case I only had enough for a few sips.

But after some days in quarantine, I realized I could order beer and wine from the hotel — it seemed like this was the only quarantine hotel where it was allowed. Although I could not get delivery of my beloved CHEERS wines, I was very grateful for this service.

I also printed many pictures of my family and friends and decorated my room, so I felt less lonely and more at home. I brought my VR glasses so I could have fun while exercising daily and meeting friends from around the world in the metaverse.

For food, I brought nuts and, being Swiss, a stock of cheese. I even brought a little raclette oven to heat up my favorite cheese.

2 The pandemic created many challenges for the wine trade. Some have been high-profile, such as shipping congestion, canceled trade fairs and lost sales due to bar / restaurant restrictions. Others are lesser known to consumers but still serious, like the bottle supply crisis. Could you talk about this situation?

The wine world has been affected by three major subjects recently: COVID, climate change and the war in Ukraine. In Europe, COVID is not the biggest challenge any more. A shift to online sales helped the wine industry in general during the pandemic, with those focused on sales to bars and restaurants hit hardest.

Unfortunately, things have changed for the worse with war in Ukraine, a situation that touches us deeply. Beyond the harrowing images of what is happening there, the war disrupted world markets and Europe’s economy is highly volatile due to energy markets and rising prices.

Within the wine industry, the situation is critical. We see exorbitant price increases in packaging materials, such as wine bottles, aluminum closures, capsules, cardboard boxes and labels, and on the raw materials used to make them. Lots of energy is used to produce such packaging and some production companies are even on strike or closed.

We continually receive messages from our European suppliers with announcements of rate increases and shortages. The glass bottle shortage is especially troublesome. One of the European glass factories is in Ukraine and other European market leaders significantly increased prices for both still and sparkling wine bottles starting in March.

Overseas shipping costs have also gone up dramatically. The industry was already in trouble due to the pandemic and the war made it even more challenging. In some cases, deliveries are delayed several months, if passage is available at all. On top of the delays, there are high increases for truck fuel and the available capacity is reduced.

Likewise, due to the war in Ukraine, the U.S. dollar is in high demand as a secure currency, and the Euro is under massive pressure. This not only makes international wines more expensive, but also increases the cost of sea freight as well as components delivered by upstream suppliers, which are billed in U.S. dollars.

3 You went to Wine Paris in February. What was the atmosphere like? What was the trade’s general attitude toward the current market?

I was excited to finally visit a wine exhibition again. Originally, I returned to Europe from China because I planned to visit the yearly ProWein exhibition that normally takes place in March in Germany. This is the most important place to meet partners, negotiate new contracts and taste new wines, but it wasn’t held since 2020 due to the pandemic. Supplier meetings have instead shifted to Zoom.

Unfortunately, ProWein 2022 was postponed to May due to Omicron, which spread wildly in Europe at the year’s start. I instead went to Paris for a smaller French-focused wine exhibition at the start of February, just before the war in Ukraine began. The big topics were climate change and the production situation of 2021.

Wine production in Europe was extremely low after harsh weather hit vineyards in the continent’s major wine-producing regions. Production dropped in Italy, Spain and France, with French wine suffering its worst hit in decades due to frost and disease. The French government declared an ‘agricultural disaster.’

French wine-growing regions such as Bordeaux, Champagne, Burgundy and Languedoc-Roussillon were affected. In Burgundy, the Chardonnay vines were particularly hard hit. An estimated 50 percent of expected production was wiped out, which made my search for Chardonnay and Pinot Noir as hard as ever.

I was looking for a crispy Chablis for our CHEERS Stores but suppliers told me there was about 70 percent less production. There were happy to give out tastings but immediately said they can’t sell any bottles as there are not enough available.

4 Speaking of Chablis, I noticed CHEERS added a lot of white wines this past year, including Riesling, Pinot Blanc, Gruner Veltliner, Sauvignon Blanc, Godello and more. What’s driving these additions?

We have seen a shift, especially since 2020, from sweet to rather dry white wines and we started to list more to satisfy the trend.

As for German wines, Riesling is especially very popular in the market, thanks also to the great effort of the German Wine Institute in promoting this grape with annual activities and education campaigns.

5 There seems lots of talk about China’s wine industry, but the numbers show imports are stagnant and even falling, and that local production was dropping, even before the pandemic. What’s happening in the market?

The only real numbers we can track is wine imports. There are no reliable sales statistics available. Imports have decreased but we should remember that cellars in China are full of wine. Excess imports from past years led to big stocks for importers and distributors.

We can see many older wines in the channels of our competitors, some of them sold at cheap prices to create liquidity. One can only hope those wines have been stored properly. Poor storage has been one of the major reasons in China why there were and still are bad wines in the market.

Also, even before Australian wines faced higher taxation in early 2020, it was known there was a lot of stock here at all price ranges. Imports have almost stopped but there are still so many Australian cheap wines sold in the market even now.

Since the pandemic, the entire world is shifting consumption to local products where possible, and that includes China. We have seen from statistics that baijiu sales in 2021 and the beginning of 2022 were increasing fast. Nevertheless, wine can’t be easily replaced, and demand for international wine is still ongoing. We can see within our stores that consumers are spending more per bottle for higher quality wines.

6 CHEERS portfolio has changed a lot this past decade. Early on, something like 90 percent was under 100 rmb per bottle, with a focus on the best-known grapes and regions. Now we see more mid-range wine, and top-end wine, plus more diversity in terms of grapes and sources.

When we started CHEERS 11 years ago, there were hardly any wine drinkers in the younger generation and not much value-for-money wine in the market. We started with easy-to-drink affordable wines that introduced the subject of wine to our newly drinking customers step by step–or sip by sip. We focused on education and free tastings to guide young consumers through the fascinating world of wines.

Over the years, the knowledge and palate of Chinese wine consumers has developed significantly. They are very open to discovery and, year by year, we added more regions and grapes. Recently, we included wines from less well-known wine regions such as Bulgaria and Hungary.

The availability of wines has increased rapidly through channels such as social media, e-commerce and wine stores as well as wine bars, which are now a trend. Among the new generation of drinkers, natural wines are popular.

There are also now many innovative talented young Chinese winemakers making wine locally. CHEERS has started to include Chinese natural wines in cooperation with winemaker Ian Dai and will continue adding more local wines. I love to see the passion of these young wine experts in producing beautiful new wines.

7 I don’t think people realize how much wine Switzerland produces. What three things should Chinese wine consumers know about Swiss wine?

Our little country in the heart of Europe has a variety of languages, landscapes and customs that give it a special charm. Our winegrowing heritage is equally complex and unique.

Switzerland’s wine industry is divided into six regions and each has its own distinctive character. We grow around 200 grapes varieties in Switzerland but some stand out depending on the area.

The French parts produce most of the wines in Valais and Vaud, with the popular grape being Chasselas, which makes delicate and elegant white wines with great minerality. The German-speaking area mainly produces Pinot Noir while the Italian area Ticino has the smallest production, with a sunny Mediterranean climate that is well suited for Merlot.

Switzerland produces around 148 million bottles per year and only 1% to 2% of those wines are exported. We like to drink the wines we make. On average, Swiss people drink around 38 bottles of wines per capita with 14 of those bottles produced in Switzerland.

The vineyards are beautiful, especially in the French part, which is 1,150 meters above sea level. A visit is highly recommended. Swiss people love to drink our Chasselas wine with fondue, one of our traditional foods. It’s a kind of hot pot with melted cheese — just thinking about it makes my heart feel warm and happy. In CHEERS we have one Chasselas on our shelves that is enjoyed by curious and sophisticated Chinese wine drinkers.

8 Speaking of food, when you were in Switzerland for six months, what three foods did you miss most from China?

Hot pot for sure — I love Chinese hot pot! Dumplings with spicy sauce. And all kinds of tofu dishes.

Check out more Q&8s here. And previous talks with Claudia Masueger here and here.

Sign up for the Grape Wall newsletter here. Follow Grape Wall on LinkedIn, Instagram, Facebook and Twitter. And see my sibling sites World Marselan Day, World Baijiu Day and Beijing Boyce. Grape Wall has no advertisers, so if you find the content useful, please help cover the costs via PayPal, WeChat or Alipay. Contact Grape Wall via grapewallofchina (at) gmail.com.