Local wine dealers find their legs

One Wednesday evening, representatives of 16 French vineyards gathered at a café in South Jakarta to introduce their wares to a hundred or so guests at a wine-tasting and dinner party.

A common remark among the vintners was evident strong enthusiasm for wine in Indonesia, the largest economy in Southeast Asia — and home to the world’s largest Muslim-majority population, who typically abstain from consuming alcohol.

“We’ve started providing for the Indonesian market one-and-a-half years ago and we’ve only grown bigger,” Jean Philippe Guillot, the Asia regional manager of Château Pape Clément, said.

The vintner, who represents a vineyard in the Graves region in Bordeaux, France, added that he had not expected that Indonesia would be such a promising market in Southeast Asia.

“The really important element is the local people, especially the new generation of this large-population country,” he told The Jakarta Post.

“Every year, we are growing 20 to 30 percent on average although we are expecting lesser growth this year due to more competition,” Vin+ co-owner Reimer Simorangkir said.

The retailer, which offers more than 8,000 bottles, does most of its business through its flagship store in Kemang, a tony neighborhood of expatriates and local well-to-dos in South Jakarta.

Reimer added that recent growth in the wine business could also be attributed to the government’s more liberal wine-import policy, which granted wine and spirit import licenses to private companies, breaking the monopoly once held by state-owned enterprise, PT Sarinah.

Under the new policy, importers initially were allowed to import 49,125 cartons, or 442,000 liters, of wine and spirits a year.

According to Euromonitor International, the Indonesian wine market was worth US$32 million in 2011, with retail sales of 3.1 million liters.

Reimer said that Indonesian consumers, buoyed by two years of 6 percent economic growth, have indeed been imbibing more wine.

“If the 6 percent growth creates 50 million new middle-class, although the categories of those in that class differ, just tapping into one percent of that class translates into thousands of people. That’s our true market,” Reimer said.

The market also includes what Yohan Handoyo, the general manager of Decanter, called the “wine-lover wannabes”.

According to Yohan, who said his business was up 7 percent last year, about 70 percent of local wine drinkers fell into the “wine-lover wannabe” category, consisting mostly of young people adopting wine-drinking as part of a more cosmopolitan and social lifestyle.

“However, as their taste palates develop as they experience more wine, this category will shift into the wine-lover category,” he said.

Meanwhile, many in the local wine business point out that there are less than 10 people in Indonesia that could be called serious wine collectors, given that building proper storage facilities for wine was neither simple nor inexpensive.

“Enjoying wine and drinking wine are two separate things. Enjoying wine requires the right utensils and, rather than going through the hassle, people prefer drinking wine at the restaurant,” Yohan added.

He further noted that those new to wine drinking preferred entry-level, medium-price wines from New World nations’ such as Chilean merlots, while connoisseurs, with more sophisticated palettes, had a penchant for premium, old world wines from France and Italy.

Meanwhile, in Jakarta, around 70 percent of wines offered for sale consist of reds, while in Bali, the nation’s second biggest wine-drinking region, the division between red and white sales is more equal, given that the palates of expats and tourists favor white wines.

Reimer said that other areas, such as Kalimantan, which boast large populations of expatriates in the oil and mining sectors, might grow into a promising markets, as well.

With continued high demand, many local wine sellers expecting to maintain the same level of growth they saw last year.

However, some remain cautious. Yohan said that the continuing global financial crisis was still “lingering in the backyard”.

“We’re still sitting on the fence but we’re projecting growth of 6.5 to 6.3 percent,” he said.