South Korea-Bound Bottles
By OWP Staff
Two 40-foot containers of Oregon wine– about 27,000 bottles — departed the Port of Portland in mid-February, headed for South Korea and its largest retailer, Shinsegae.
The shipment of Oregon Pinot signals a potentially bright future for export to a growing Korean market.
“We’ve enjoyed the export of many Oregon products to Korea for decades, but this particular sale of wine is extraordinary,” says Gary Roth, Oregon Department of Agriculture’s marketing director. “What is unusual is the size of the retailer making the purchase and how quickly it happened. Korean buyers who visited our wineries last month committed to purchasing 2,200 cases almost on the spot. We don’t see those kinds of large purchase decisions made so quickly. They obviously like our wines.”
In late January, buyers representing Shinsegae, which captures about 38 percent of the retail market share in South Korea, toured 20 Oregon wineries. Four were selected to be part of the sale: Domaine Drouhin Oregon and Lange Estate in Dundee, WillaKenzie Estate in Yamhill and Union Wine Company of Sherwood.
Shinsegae is marking the one-year anniversary of the Korean Free Trade Agreement by conducting a promotion of several U.S. products, Oregon wine among them. The shipment of Pinot will make its way into Shinsegae’s high-end department stores, hypermarkets similar to Fred Meyer, Costco-type stores, hotels and a chain of seafood restaurants.
“The Oregon name in Korea is gaining a lot of momentum,” says ODA trade manager Amanda Welker, who was instrumental in facilitating the wine transaction. “We have done well there with our berry products, cherries and seafood. The name Oregon represents quality, clean and green; and it does well in the Korean market. Oregon wine can be the latest to make a splash.”
All 27,000 bottles of wine are Oregon Pinot Noir and Pinot Gris. The majority are the former, which is preferred by Korean customers because they associate red wine with good health. But whites are increasing in popularity largely because they pair well with Korea’s often-spicy food.
“This is an excellent growth opportunity,” Welker says. “Wine consumption in South Korea is trending up. Young people are drinking wines and learning how to pair wines with their food. Wine is now the preferred alcoholic drink of women in Korea, again because of the perceived health benefits.”
January’s journey to Oregon by Korean buyers was the result of teamwork. A Korean wine expert chosen to help with the Shinsegae promotion contacted ODA through the USDA in Seoul. ODA then worked with the Oregon Wine Board to arrange meetings and tours for the buyers. A whirlwind one-week visit paid off with a quick purchase of more Oregon wine than expected.
“We’re thrilled with the support ODA provided both the Shinsegae team and our wineries. Oregon’s international reputation is growing on a foundation of high quality at all price points and this was echoed in the response from the Shinsegae representatives,” says Dewey Weddington, OWB director of marketing and education. “Their initial intent was to purchase a value-priced Oregon Pinot Noir, but we are very happy to exceed their expectations, and they are now purchasing a broader selection to introduce to Korea.”
At the heart of the activity is the elimination of tariffs on U.S. wine. The 15 percent charge prior to the free trade agreement added to the difficulty of wine from Oregon and other states to compete with wines from Chile, Australia, New Zealand and other countries that already had free trade with South Korea. Now it’s a new ball game and an even playing field for Oregon wines.
“There have been Oregon wines in South Korea for a few years now, but the free trade agreement makes this even more exciting,” says David Millman, managing director of Domaine Drouhin Oregon, one of the participating wineries in the initial shipment. “We’ve been interested in Korea for years, so when this opportunity came up, we were thrilled to be a part of it.
“Shinsegae is a very strong company with a great reputation,” Millman continued. “Part of their mandate has been to include Oregon wine in their assortment of products. Several years ago, the idea that people from Korea would be determined to buy Oregon wine was mind-blowing.”
About 75 percent of the Oregon wine shipment comes from Union Wine Company, a rapidly growing winery founded in 2006 looking for a great sales opportunity to expand into the export market.
“This could be a real good thing; and we’re already talking about a second shipment,” says Justin Hoffman, Union Wine’s national sales manager.
He is optimistic that Koreans will be asking for more. “It’s way too early to tell, but if I’m a betting man, I would say more Oregon wine — not just ours — will end up going to Korea as a result of this shipment and promotion. Shinsegae is the largest retailer in Korea and will give Oregon wines a lot of exposure. That should increase the demand in South Korea for Oregon wine.”
From Asia to the European Union, Oregon wines are making a name for themselves in the export market. A global image is being established as Oregon wines have created a brand awareness. The upcoming shipment to South Korea reinforces the notion that the industry’s efforts are paying off.
“There is more work to be done and there is no victory lap yet,” says Millman. “But it means that all the work done to promote high quality Oregon wines has resonated. The message is finding its way out to the world, and the world is listening.”
In the latest case, Oregon wineries didn’t even have to leave the vineyard. The buyers from South Korea were more than willing to come calling.