Penfolds deepens local collaboration, innovation

Australian wine company Treasury Wine Estates is doubling down on local collaboration and innovation to strengthen its foothold in China, as it expands talent exchange programs and tailors marketing strategies to evolving consumer trends.

At this year's China International Import Expo in Shanghai, Penfolds, a top label of TWE's brand portfolio, introduced new products, including the Year of the Horse limited edition, reinforcing its brand confidence and localization efforts.

Jack Wu, general manager of Penfolds in China, said the company divides its Chinese consumer base into two main segments — young consumers and traditional wine drinkers — with distinct marketing approaches for each.

One by Penfolds, which partners with popular artists such as Chinese singer Hua Chenyu, has been designed to attract younger consumers seeking novelty and creativity.

For more traditional consumers, Penfolds launched the Art of Blending wine tasting experience, which covers immersive, small-scale events featuring themed settings, audiovisual experiences and curated tastings.

"These formats allow consumers to appreciate our products in a more engaging and educational way," Wu said.

Localization, he added, is at the core of Penfolds' China strategy. Several initiatives, including those targeting young and premium consumers, were first launched in China and have since attracted attention from other markets such as Southeast Asia.

"China is not only a key market, but also a source of marketing inspiration," he said. "Ideas like the Year of the Horse limited edition, which incorporates Chinese paper-cutting art, are now being promoted globally."

Wu said that Penfolds is closely watching the rapid rise of instant retail in China, though the brand has yet to enter the space. "Instant retail aligns with the needs of young consumers, but as a premium wine brand, we must evaluate whether the model fits our positioning," he said. "Once we determine the right direction, we'll move forward decisively."

He added that the company remains confident in China's resilience and potential despite changing consumption patterns, and said: "The Chinese market is vast and dynamic. We will continue to innovate, adapt and deepen collaboration with local partners to serve evolving consumer needs."

A key to adapting to market dynamics is industry collaboration. The China-Australia Winemaker Immersion Program, launched by the China Alcoholic Drinks Association and Australian Grape & Wine, and supported by TWE, reflects the company's long-term confidence in the Chinese market.

After the second phase of this initiative, a graduation ceremony was held at Penfolds booth on Thursday for four Chinese winemakers sent to Australia and four Australian wine professionals sent to China, each for a four-week exchange. The trips have drawn strong interest from both sides of the industry.

China remains one of the most significant markets for Australian wine, according to AGW.

"What we are seeing is a shift in consumer behavior, particularly among younger Chinese consumers, who are less focused on technical knowledge and more motivated by authenticity, emotional value and lifestyle," said AGW.

"Over time, as this consumer segment grows in influence, China will continue to be a key market for Australia — but one that requires a more nuanced, long-term approach."

COFCO Wines & Spirits, a partner of TWE, said local consumers' perception of imported and domestic wines has changed significantly. For imported wines, consumers are no longer satisfied with just the "imported" label. They now delve into origin characteristics and varietal differences when choosing, reflecting a shift in taste and enthusiasm for exploring diverse styles.

Penfolds' push for deeper integration follows TWE's acquisition of the Stone & Moon Winery in the Ningxia Hui autonomous region last year, part of a broader strategy to collaborate with local winemakers to enhance grape cultivation and wine quality.

Wu said Ningxia's advanced irrigation systems and distinctive grape varieties, such as Marselan, offer significant potential for international recognition.

"These programs and acquisitions represent our commitment to the Chinese market and the long-term development of the wine industry," Wu said. "We are not only selling products, but also contributing to the industry's growth."