Saturday, July 2, 2011

Lodi wines gain ground in Chinese market - Lodi News-Sentinel:

Lodi wines gain ground in Chinese market - Lodi News-Sentinel:


Lodi wines gain ground in Chinese market
By Jordan Guinn

News-Sentinel Staff Writer | Posted: Friday, June 10, 2011 12:00 am

Thanks to a blossoming middle class with expendable income and a preference for California wines, Lodi appellation vintners are starting to cash in on China. The interest is so strong that the owner of one Linden winery is even considering selling his vineyard to Chinese investors.

"I'm looking to retire, and I'd say that the offers I'm getting — 5-to-1 — are from Chinese investors," said Dave Pechan, owner of Miramont Estate Vineyards. "The Chinese government is providing financing to help investors buy these places. They want Chinese investments in food processing and food-providing companies around the world."

Part of the reason the investors are interested in the property, Pechan said, is because of the business Miramont is doing overseas. Pechan met with Consulate General of the People's Republic of China Gao Zhansheng in 2008, but didn't start seeing sales materialize until 2010. Last year was a stellar year for sales, Pechan said, with roughly one-third of his exports going to China.

"The last two years have been unbelievable," Pechan said. "The people I'm shipping to in China say things are changing so fast over there that they can't even keep up."
Even though tariffs for shipping into China's mainland can be nearly 50 percent, exporting there can still offer more profit potential than sending wine across the United States, Pechan said. Many states still have taxes and regulations for the shipment of alcohol dating back to the days of Prohibition, and it makes the process cost-prohibitive, he said.
"I can ship to 50 separate countries easier than I can ship to 50 states," he said.

Although the tariffs in China are high, the costs can be absorbed by the importer, and the Chinese vendors he's worked with prefer to receive full containers to keep shipping costs down, Pechan said.
"We may be selling the wine at a lower price point, but we're making the same amount of money," he said.

Paperwork is a part of any business, and the exporting of alcohol is no different, said Craig Watts, owner of Watts Winery in Lockeford.

"The main thing is going through the hoops to get the proper permits to the Chinese government," he said. "Then you have to get contracts agreed on."
Watts has been shipping wine to China for about three years, and will attend Saturday's event to explore options for the future, he said.
One of the most significant challenges, Watts said, besides trying to coordinate the efforts of his five different buyers, is getting the pulse of a market you can't personally visit on a daily basis.
"There are different demands for the different markets in China," Watts said. "Some people want Cabernet; others want less expensive wines. I'm fortunate to have the capacity to do both."
Watts has sent tens of thousands of bottles to China in recent years and shipped a 1,000-case container to China in November. Another 1,000-case container packed with bottles of Zinfandel, Cabernet and Chardonnay should be ready for export in two months, he said. A standard wine case contains 12 bottles.

Gayaldo prefers that Lodi wineries look to ship a finished product overseas instead of raw materials like grape juice, he said, because it helps ensure a better payout for the grower.
"When coffee beans are shipped, the grower receives very little of the profit," he said. "The company that turns the beans into a branded product earn the lion's share of the profit."
Small wineries would be better suited trying to export a finished product overseas to maximize earning potential, Watts said, but larger wineries should consider all the options.
"If you are doing more volume and you are trying to get out as much as you can with a consistent cash flow, sometimes you can do better exporting juice," he said.
Contact reporter Jordan Guinn at jordang@lodinews.com.

Lodi wines gain ground in Chinese market - Lodi News-Sentinel:

Lodi wines gain ground in Chinese market - Lodi News-Sentinel:


Lodi wines gain ground in Chinese market
By Jordan Guinn

News-Sentinel Staff Writer | Posted: Friday, June 10, 2011 12:00 am

Thanks to a blossoming middle class with expendable income and a preference for California wines, Lodi appellation vintners are starting to cash in on China. The interest is so strong that the owner of one Linden winery is even considering selling his vineyard to Chinese investors.

"I'm looking to retire, and I'd say that the offers I'm getting — 5-to-1 — are from Chinese investors," said Dave Pechan, owner of Miramont Estate Vineyards. "The Chinese government is providing financing to help investors buy these places. They want Chinese investments in food processing and food-providing companies around the world."

Part of the reason the investors are interested in the property, Pechan said, is because of the business Miramont is doing overseas. Pechan met with Consulate General of the People's Republic of China Gao Zhansheng in 2008, but didn't start seeing sales materialize until 2010. Last year was a stellar year for sales, Pechan said, with roughly one-third of his exports going to China.

"The last two years have been unbelievable," Pechan said. "The people I'm shipping to in China say things are changing so fast over there that they can't even keep up."
Even though tariffs for shipping into China's mainland can be nearly 50 percent, exporting there can still offer more profit potential than sending wine across the United States, Pechan said. Many states still have taxes and regulations for the shipment of alcohol dating back to the days of Prohibition, and it makes the process cost-prohibitive, he said.

"I can ship to 50 separate countries easier than I can ship to 50 states," he said.

Although the tariffs in China are high, the costs can be absorbed by the importer, and the Chinese vendors he's worked with prefer to receive full containers to keep shipping costs down, Pechan said.
"We may be selling the wine at a lower price point, but we're making the same amount of money," he said.

Paperwork is a part of any business, and the exporting of alcohol is no different, said Craig Watts, owner of Watts Winery in Lockeford.
"The main thing is going through the hoops to get the proper permits to the Chinese government," he said. "Then you have to get contracts agreed on."
Watts has been shipping wine to China for about three years, and will attend Saturday's event to explore options for the future, he said.

One of the most significant challenges, Watts said, besides trying to coordinate the efforts of his five different buyers, is getting the pulse of a market you can't personally visit on a daily basis.
"There are different demands for the different markets in China," Watts said. "Some people want Cabernet; others want less expensive wines. I'm fortunate to have the capacity to do both."

Watts has sent tens of thousands of bottles to China in recent years and shipped a 1,000-case container to China in November. Another 1,000-case container packed with bottles of Zinfandel, Cabernet and Chardonnay should be ready for export in two months, he said. A standard wine case contains 12 bottles.

Gayaldo prefers that Lodi wineries look to ship a finished product overseas instead of raw materials like grape juice, he said, because it helps ensure a better payout for the grower.
"When coffee beans are shipped, the grower receives very little of the profit," he said. "The company that turns the beans into a branded product earn the lion's share of the profit."
Small wineries would be better suited trying to export a finished product overseas to maximize earning potential, Watts said, but larger wineries should consider all the options.
"If you are doing more volume and you are trying to get out as much as you can with a consistent cash flow, sometimes you can do better exporting juice," he said.
Contact reporter Jordan Guinn at jordang@lodinews.com.

Lodi Costco opens - Lodi News-Sentinel:

Lodi Costco opens - Lodi News-Sentinel:

Lodi Costco opens
‘We're real excited’: Area residents get a closer look at the wholesale retailer at Harney Lane, Highway 99
Story

Dan Evans/News-Sentinel
Customers browse the food department of Costco on Thursday, June 9, 2011.
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Posted: Friday, June 10, 2011 12:00 am | Updated: 5:41 am, Sat Jun 11, 2011.
By Maggie Creamer
News-Sentinel Staff Writer | 9 comments

The doors are wide open. Costco customers grab carts and start streaming into the new Lodi store.

On the left are gleaming 55-inch 3D-capable TVs, and employees waiting to develop film in one hour. On the right are neatly folded jeans and workers handing out fliers with coupons.
One customer stares at 30 rotisserie chickens spinning in the Inferno 3500 and while another stops to pick up a loaf of bread. A nearby employee describes a free sample as "good as a breakfast item or by itself."
Customers found a clean, shiny, large store on Thursday that they say will be an improvement over driving to Stockton.

Costco sells most items in bulk quantities, and is located at Harney Lane and Highway 99 in the Reynolds Ranch Shopping Center.
The wholesale retailer has displays with everything from the lavishly expensive to the bulk bargain. At a jewelry counter, there is a $165 necklace featured and an ad for a $57,999 necklace available online. There is the ultimate barbecue grill with a price tag of $1,600 next to a typical backyard charcoal grill that costs $85.

As of 2 p.m. Thursday, warehouse manager Denise Zizzo said 6,700 people had walked through the store on the first day or during the preview opening Wednesday.
"The biggest thing we've heard is, everyone is happy we are here. They love the store. They think it's nothing but beautiful," Zizzo said.

The store hired 180 employees, and about 70 to 80 percent are from the surrounding area, she said. A majority of the in-store transfers were Lodi residents who wanted to work closer to home.
During the ribbon-cutting on Thursday, Mayor Bob Johnson said he is excited that Lodi residents will have a new store. He said it has already increased the city's property tax.
"As soon as you people go in and fill up your carts, then our sales tax revenue will go up," he said to the waiting crowd.

Lodi resident Tammy Delemos stood outside listening to the speeches. She recently retired from Staples and was excited to attend her first grand opening. She mainly wanted to get meat and alcohol for upcoming parties.
"We're real excited. We want to support the community. ... This is like Black Friday in June," Delemos said.

While weaving through the aisles, customers can almost get a full meal while choosing from more than a dozen samples, including pork loin, sausage, chicken salad, spinach dip, barbecue sauce, cheddar cheese, lemon bars and creme brulee.
Customers looking for a quick lunch can stop at the store's cafeteria that offers hot dogs, pizza, chicken Caesar salad, a berry sundae and 59-cent sodas.
The retailer is selling wine from local wineries, including Michael-David, Periano Estate and Jessie's Grove.

Michael-David is in Costco stores throughout the entire United States, and Melissa Phillips-Stroud was handing out table grape vines on Thursday as an opening-day gift.
"The amount of volume Costco does is extraordinary. People don't buy a bottle of wine; they buy a case," Phillips-Stroud said. "Getting your items in the store helps build your brand."
After walking outside of the dairy room, Jean Battaglia said the store is beautiful.

"We just need little tour guides because it is so different than Stockton," she said. "When you live in Lodi, there's not much else to do."
Lodi resident Deena Kirby lives about half a mile down Harney Lane, and wanted to be at the store for the grand opening.
"I wanted to see what happened when the doors open," Kirby said.

She owns All Seasons Carriage at the corner of Harney and Wells lanes, and she wanted to see how traffic will be now that the store is open.
"As a local business owner, I want to see how it will impact my business. I think it's great for Lodi, and it is tax revenue we need," Kirby said.
Hours for the store will be from 10 a.m. to 8:30 p.m. Monday through Friday, 9:30 a.m. to 6 p.m. Saturday, and 10 a.m. to 6 p.m. Sunday.

Contact reporter Maggie Creamer at maggiec@lodinews.com. Read her blog at www.lodinews.com/blogs/citybuzz.