Selling wine in China: Interview – John Gai of Palette Wines

By Jim Boyce

Palette Vino in Shunyi (Photos: Palette)

A former China country manager for Zonin wines, John Gai started the Beijing-based distributor Palette Wines in 2002 and the retail-oriented Palette Vino in 2005. I talked to him about how he got involved in wine, what inspired him to start his companies, and where he sees the Beijing and China wine scenes heading.

How did you get into the wine industry?
I come from a food background. I graduated from culinary college in Beijing in 1991 and went to Estonia in 1992. I opened my first Chinese restaurant there in Tallinn, the capital city, and sold it a year later. Then I traveled in Spain for about three months and returned to Tallinn. In early 1994, I started to work at a local restaurant called Gloria. Gloria sent me to Cafe Opera in Stockholm to do western food training and I returned to be a chef at Gloria for about three years.

I came back to Beijing in 1996 and joined Handel Lee’s The Courtyard. I was the first floor manager there. In November 1997, I went to the Beijing International Wine Exhibition and met the export director and the president of Zonin. Zonin is the largest privately owned winery in Italy. They invited me to become their China country manager and that’s how I got into the wine industry.

Before joining Zonin, my wine experience came from restaurants. Gloria hosted a local wine club and each meeting would include guest speakers and different kinds of wine. I often joined the tastings and learned a little bit about wine.

Why did you start Palette?
I started working for Zonin in February 1998 and left the company at the end of 2002. Zonin offered a lot of training during those five years. I visited wineries and vineyards in Italy, Australia, California, and Spain. Part of my job was to find distributors throughout China and to work with them, so I gained knowledge about local markets. I thought the market had become much stronger for higher-quality and premium-level wine by 2002, and I decided to start my own company, Palette Wines, focused on wholesale trade.

I started a second company called Palette Vino to focus on retail in 2005. We opened our first place in Shunyi in May 2005. We had a very good salesperson around that time who was selling our wines in the Jenny Lou’s [gourmet shop] there. Our sales were strong and he found a location nearby. It was abandoned and in poor condition, so I went to see the landlord and negotiated a very good lease.

Why did you go into retail?
I opened Palette Vino for three main reasons. From my trips to Italy and Spain, I liked the idea of combining a wine shop and a small eatery. With this concept, food complements wine rather than the other way around. Most wine retailers and wholesalers are intimidating for consumers, so I saw Palette Vino as a friendly place for people to go and try wines.

Second, my interest in bringing in wine was quite different from other suppliers. Some brands we represent are pretty much unknown here because of the region or varietal. This makes them more difficult to promote. By opening our own place, I thought we could sell a large percentage of our wines through it.

Third, there are quite a few interesting wines brought in by other importers and distributors that are poorly presented in restaurants and other channels. I saw a chance to also sell these wines in Palette Vino. About 20 to 30 percent of the wines we sell there are from other distributors.

More recently, we were invited by Pekotan, a Japanese butchery and bakery, to set up a wine section in their Central Park shop.

What were your experiences in putting together the portfolio?
Our portfolio is focused on wine produced by small- to medium-sized wineries, mainly in Italy and Australia. I went on a great wine tour in Australia in 2002 and visited wineries in South Australia. I had read a book by James Halliday and went to some of the good wineries he talked about. I usually met the wine maker and the owner, and from there I started my Australian portfolio.

The Italian portfolio is based on my frequent visits to Italy while I was with Zonin – to Tuscany, Veneto, Piedmont, and to southern and central regions. I also attended international wine fairs such as VinItaly in Verona and VinExpo in Hong Kong.

My strategy is to pick a region and then plan to see at least ten to fifteen wineries. I generally avoid trying to represent a winery’s entire portfolio. If they offer me six wines, I might go for two or three. I’m looking at balancing the portfolio – you can’t always have Shiraz from Australia. You need other varietals.

I like your portfolio, but I get frustrated at the sometimes short notice of events, the lack of information on invites, and the difficulty with service. What’s going on there?
We are going to improve in this area this year. In the beginning of 2007, I started to put more focus on dealing with the media and working on the marketing program. Not all our events are organized well, but we are getting better. We also re-released our Web site just over a year ago.

Where do you see the wine scene heading in Beijing and in China as a whole?
It’s becoming more consumer-friendly, which means you will see more retail locations, including wine bars and wine shops. The general trend with some trade customers is to provide easier to understand menus and to move away from dividing wines by country of origin. I recently consulted on an important restaurant’s wine list and I organized the wine by varietals.

Part of the Palette portfolio

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