DFJ Vinhos: Wines in China, A promising but difficult market

The company’s core business is winemaking and is autonomous from vineyards. Hence, DFJ
Vinhos earns flexibility and is able to better tailor its wines to different markets. José Neiva
Correia is the company’s wine maker and the sole owner since 2005.
Company´s main markets:
i. Scandinavia – Small in volume, but a growing market. High purchasing power. – DFJ
Vinhos exports 15% of the total Portuguese exports to Norway and 6% to Finland;
ii. Central Europe – Consumption is decreasing, still, countries as Italy, Germany, and
France, followed by the UK, are still the biggest world wine consumers. Representing
together with the US ¾ of the market. – the UK is the biggest market for Dfj Vinhos
having 7,5% of the total Portuguese exports;
iii. Poland – Relevant and growing market for the company - DFJ Vinhos exports 5% of the
total Portuguese wine exports
iv. North America – Big and still expanding consumer market
v. Emergent Countries and Eastern Europe – New opportunities with the rise of the
middle class - China (7 th country in terms of wine consumption in volume)
Competitors:
Considering the Chinese market, the company’s competitors will depend on the positioning
José Neiva Correia is going to embrace. Generally, competitors can be split into two,
considering both scenarios. On the one hand, for the most basic categories the competitors
are mostly from new world wine countries. Spain and Italy also have a strong presence, mainly
in the horeca Channel, less commonly, but also sell cheaper wine through big retailers, such as
Tesco and Walmart. To compete in the low end segments, DFJ Vinhos would have to care
about quantity, price, and quality, not abandoning the image of old world wines.
On the other hand the main competitors are wines with a better image and better awards,
from any country or French wines. For the medium/high segments, DFJ Vinhos would have to
care more about adaptation to the consumer, quality, and communication.
i. French Wines are the favorite country in China [exhibit 6];
ii.
Wines from Chile are the most price/competitive due to a free trade agreement with
China. Most of the Chileans wines can meet the under - 70¥ price band, compared to
the 91¥ achieved by DFJ Vinhos for retailers (considering the present price table and
without any price adjustment and discount)
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