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Hong Kong-based Vats Liquor and Constellation Brands Inc., Victor, N.Y., announced a long-term strategic agreement to jointly develop the wine brand Robert Mondavi in China. Vats Liquor and Constellation will work together to exclusively market and promote the brand. The format and the scale of this agreement are unique in the global wine industry, the companies say. It also begins a new chapter of commercial cooperation between the United States and China for the wine industry, they add.
The strategic agreement between Vats Liquor and Constellation is anticipated to last for a few decades, according to the companies. Both groups will work to grow the marketplace share of the Robert Mondavi brand through Constellation’s brand management expertise and Vats’ vast distribution network and knowledge of the Chinese consumer.
“The mission of Vats Liquor is to offer reliable channels for consumers to buy authentic fine wine and spirits,” said Wu Xiangdong, chairman of Vats Group and Vats Liquor, in a statement. “Constellation is the world’s largest premium wine company, and it has more than 100 brands of wine, spirits and beer. I cordially welcome Robert Mondavi wines, the crown jewel of Constellation’s wine portfolio, to join the Vats portfolio. It will satisfy the growing wine consumption of the middle class and escalate the wine business development of Vats Liquor.
“China is the fifth largest wine consumption market globally and is projected to be a key driver of total global wine growth during the next five years,” he continued. “The vision of both Vats Liquor and Constellation is to build Robert Mondavi to the No. 1 imported premium wine brand in China.”
The deep understanding of Chinese consumer insights and the professional brand-building capabilities of Vats Liquor are key reasons for this agreement, Constellation expressed.
“This strategic alignment with Vats Liquor is an exciting step forward in the execution of our international strategy, which is focused on establishing strong distribution of our powerful global wine and spirits brands in core markets around the world,” said Rob Sands, president and chief executive officer of Constellation Brands, in a statement. “Vats Liquor, a proven and successful brand builder in the alcohol beverage industry, is the right strategic partner for us to work with to build our Robert Mondavi brand portfolio in China due to its vast industry experience, established market relationships, and deep knowledge of the Chinese consumer. This long-term agreement with Vats Liquor demonstrates our commitment to this region and to investing in our brands.”
For more than 40 years, Robert Mondavi Winery has produced wines from vineyards in the Napa Valley in California. The winery also created Woodbridge by Robert Mondavi for everyday consumption and Robert Mondavi Private Selection to highlight the diversity of California’s wine-growing regions.
“Most American wines have very little brand recognition in China; however, the Robert Mondavi name is recognized as a synonym for quality, craftsmanship and taste,” said Jay Wright, president of the wine and spirits division for Constellation Brands, in a statement. “Through Vats Liquor’s distribution network, Constellation will leverage that recognition and capitalize on this unique opportunity to increase exports of California wine and build brands through the Robert Mondavi name. With the deep roots we are cultivating, we intend to shape this important market and make these wines available to more Chinese consumers.”