In an effort to increase its foothold in the Southeast Asian market, Australian winery Penfolds has launched a set of pop-ups across Singapore, Thailand, Malaysia, Vietnam and Cambodia across June and July. The ‘Terminal 1844’ pop-ups feature wine tastings, dance performances, and interactive activities, all centred around a space capsule theme. Meanwhile, bottles of ‘Baby Grange’ Penfolds Bin 389 are encased in limited-edition rocket-shaped gift boxes. “Southeast Asia has been a focus
focus market for Penfolds, and increasingly so with the reopening of markets post-pandemic,” Yodissen Mootoosamy, general manager of Penfolds International told Inside Retail.
“Penfolds takes an insights-based approach on where and how we launch our new retail concepts, [and] our brand health study in 2021 [showed] that in-store visibility is the number one source of brand awareness across markets in Southeast Asia.”
The pop-ups are part of a broader ‘Venture Beyond’ campaign, which is focused on a space exploration theme and the expansion of new horizons.
“We’re venturing into the exciting and visually powerful world of space exploration, and daring to go where other wine brands have never gone before,” Mootoosamy said.
Penfolds, Made in China
Penfolds’ focus on Southeast Asia comes after the business’ biggest export market, China, placed large tariffs on the Australian wine industry in 2020.
Until 2020, China was the Australian wine industry’s largest market, making up over one third of the industry’s exports.
However, after a falling out between the Chinese and Australian Governments over a number of factors, such as the government’s 2018 ban on Huawei Technology’s ability to contribute to Australia’s 5G network, and a broader international push to understand the origins of the Covid-19 pandemic, China set tariffs of up to 212 per cent on Australian wines.
The impact of the tariffs eventually led Treasury Wine Estates to rethink its approach to international markets and restructure its business.
Beyond meeting Southeast Asian customers on their home turf, Penfolds is also launching a new wine directly within China: a vintage made from the ground up using Chinese ingredients and sold within the Chinese market, as it already does in the US, France and Chile. This new wine is expected to launch in the second half of 2022, and will likely be available outside of China following the local launch.
Penfolds International managing director Tom King told Inside Retail that the move was always on the cards, but that the Chinese Government’s decision to place tariffs on Australian wine quickened the new vintage’s speed to market.
“The introduction of tariffs was a significant event for the Australian wine industry as a whole, and for Treasury Wine Estates, but we’re seeing it as a catalyst,” King said.
“We remain committed to the Chinese market for the long term, and in recent weeks it’s been encouraging to see discussions between the Australian and Chinese Governments for the first time in several years.”
According to King, the global premium and luxury wine market is forecast to be worth $120 billion by 2025: and Treasury Wine Estates, owner and operator of the Penfolds brand, aims to be a leader within the space.
“Today about 83 per cent of our revenue comes from the luxury and premium segments, and we expect to see the premiumisation trend that played out during the pandemic to continue into the future,” King said.