Warren Porter sits down with Jay Ginsberg of Ginsberg+Chan to discuss the retail wine market in Asia and Hong Kong over a 1971 DRC La Tache. They discuss the changing palates of Asian wine drinkers from Bordeaux to Burgundy and their new fondness for Rhone, Loire Valley, Italy, and even California wines such as Sine Que Non, Opus One, Harlan, and Dominus. Jay also discusses Ginsberg+Chan‘s growth plans into other Asian countries beyond Hong Kong and China.
Asia and Hong Hong Wine Retail Market | Video Transcript
Warren Porter: Good afternoon everybody and welcome to Behind Fine Wine, where we interview people from within the world of wine and today I’m very excited to be welcoming a good friend. My guest, Jay Ginsberg of Ginsberg and Chan from Hong Kong. Welcome, good to see you buddy.
Jay Ginsberg: You too.
Warren: Yes, and what we’re going to do today while we chat because Jay is a very special guest, we’re going to have a bottle of 1971 Domaine de la Romanee Conti La Tache. So hopefully this is good. It’s got a bit of a low fill. I’d Coravined it quite a long time ago to make sure it was fine but you know, let’s hopefully make sure that it’s still fine- so I’m going to chat with you a little bit while I use the Durand to open this up because I don’t want to push a cork into a La Tache.
Warren: Jay owns and operates a company called Ginsberg+Chan which is one of the premier retailers of fine wine in Hong Kong. In fact, he won an award before that. What was the award you won?
Jay: Two awards actually, well, two years in a row. Drinks business which is a UK publication, you’re probably familiar with it.
Warren: Yes, very much.
Jay: Every year they have their awards at the London wine fair and in 2017 we won the fine wine merchant of the year.
Warren: Oh, that’s great.
Jay: It was an amazing experience and the next year we won it for fine wine merchant of Asia, in 2017 and again in 2018.
Warren: When you and I met, the fine wine business was not your first. Like when you were in Canada you moved from Toronto to Hong Kong?
Warren: And got into the business there. What was the catalyst for that? How did you wind up at…? I’m struggling a little bit with my Durand.
Jay: Do you want me to get that?
Warren: Don’t ever emasculate me like that. So what was the catalyst for that?
Jay: So we decided to move to Hong Kong in what was the GFC; financial crisis in ’08. Our kids were young and we decided to go on a new adventure. I was in real estate, the other half of the company and my wife, Mandy Chan. We decided in ‘08, let’s go do something different and her parents had moved back to Hong Kong. So, we decided let’s go take the kids to Hong Kong and we had an opportunity to explore the wine market. Basically, we had the idea with the friend of ours to go into the wine business and we thought it would be a two-year thing and we’d come back to Canada. You know, this was what was going to tide us over at Hong Kong.
Warren: Oh, look at! You know what? That might have been one of the only corks I haven’t gotten opened in one shot with the Durand.
Jay: Look at that!
Warren: I know, I’m very saddened by that. It’s really going to reflect poorly on my podcast.
Jay: Wow! Look at the color on this thing.
Warren: I know; very, very dark. So, you wound up in the business in Hong Kong and it, I’m going to want to push that cork in. You wound up in the business in Hong Kong. Liked it. Obviously, you’re doing very well at it and decided that that’s going to be your…
Jay: So, we started off actually with a really large portfolio. We got there right at the beginning of 2010, when the fine wine market was just taking off in Hong Kong, so we quickly pivoted into focusing on the fine wine market. I don’t know if you remember but Bordeaux was really taking off at the time.
Warren: Bordeaux was the wine.
Jay: Bordeaux was the wine. It was the wine that everybody wanted to drink in Hong Kong and so that basically was what got us started.
Warren: Cheers. Heavy brick isn’t that?
Jay: Yes, but it’s okay.
Warren: Yes, it’s okay. I think this is going to change pretty rapidly though, too. There’s a little bit of funk that might toss off.
Warren: Yes,that’ll be great. I think that’s going to get better.
Jay: Yes, you can definitely tell there’s La Tache in there.
Warren: Yes, you stayed and you’ve got how many employees now?
Jay: We have 14 on our team.
Warren: Yes, and you specialize in the highest end of the market right? Is that your niche? I think people think of Hong Kong, North Americans I should say right, That it’s just people drinking Lafite and Latour all day long.
Jay: No, they drink DRC’s well.
Warren: Oh! Do they have them? Well, they never mind. But the thing I really enjoy about coming to Hong Kong, is that the people really do drink the wines.
Warren: And they enjoy the wines. So, it’s not like ‘we’re going to put them in our cellar and never go there again’ right?
Jay: I the only market that I’ve known. It’s the only wine market that I’ve grown up in. So. when we have other suppliers or merchants or whoever you know, even collectors coming to Hong Kong from around the world, no one can believe what kind of wines that people are drinking on a daily basis. It’s just every day, Monday to Sunday, people are drinking incredible wines.
Warren: I think culturally, correct me if I’m wrong, you must have had a big culture shock going there; you know, being coming from Ontario.
Jay: Yes. Yes, definitely.
Warren: But culturally I’ve found that a lot of times, people here will tell you wines that they have. But there it’s I’ll share the wine with you. I’m not going to show you that I have a 71 La Tache. We’re going to open the 71 La Tache and therein lies a pretty big difference culturally between the two.
Jay: Yes, it’s very generous. This is their culture. When you go to eat with somebody, you’re eating usually at a table with eight or ten people and everybody brings wines. Nobody wants to be seen bringing, you know, a wine that’s not going to match at least everybody else’s wine. And so, for that reason, I think that’s part of the reason why people are drinking such incredible wines.
Warren: You don’t want to be the one.
Jay: You don’t want to be the guy who’s brought the worst bottle.
Warren: Thanks for the white Zinfandel Norm.
Jay: Exactly. So there is a bit of a competitiveness there, but it’s also just generosity. They’re incredibly generous. You know, right from the start when we got there we were drinking wines with our clients that completely blew us away. I remember the first time we had a Lafitte. I think it was like the third month in that we were in Hong Kong and we went for dinner with a client. I brought an 86 Cos d’Estournel and I was really excited about it. My customer was like ‘Oh this is great. Yes, it should go really nice with this 96 Lafite’. I can’t remember if it was a 96 or 98 Lafite. I was like ‘I think I need to up my game’.
Warren: So, to that end. When we look at it, where China goes is where the market goes. Right? As far as fine wine is concerned. So, it’s either the world financial situation or austerity or something that always impacts the fine wine market. So, what’s happening right now in Hong Kong and how is that impacting the rest of the fine wine market around the world?
Jay: Yes, well I think the broader trend, which has been happening for a few years now, is that Asia is looking beyond Bordeaux wine. That’s been the biggest shift in the wine market, I think from a macro perspective.
Warren: Now, is that a maturation of the palate, ss some would say?
Jay: I think it’s Bordeaux. The Bordelais, with the help of the UK trade, did a fantastic job of selling Bordeaux to Asia. It was a premium product. There was lots of it. And the model in terms of en primeur, selling by the case, and a lot of volume really worked for many, many years. Now you’re at a point where people just don’t need five pallets of every first growth every year. They’re never going to drink it. People have not gotten bored of drinking Bordeaux, I mean that’s too crass, but the palate has changed.
Warren: So, the Bordeaux market is softened. The Burgundy wine market obviously is where the money is shifted to?
Warren: Oh Rhone, ok.
Jay: Northern Rhone has taken off finally. More Northern than Southern.
Jay: Loire Valley. Even the US we are seeing a lot more interest from. It’s still the top wines.
Warren: Yes sure.
Jay: Sine Que Non, Harlan.
Warren: Opus One.
Jay: Opus, Dominus; know things like that. But the palate is broadening, which is good.
Warren: Yes, that is good because otherwise, we got that narrow, narrow niche. Now Jay and I had met originally because we were moving a lot of wine through our US facility in to other US retailers for Canadians who were looking to liquidate some of their collections. Pardon the pun. Jay was one of our favorite guys that we would go to, to move collections. So we’re always kind of looking and seeing what’s happening in Hong Kong to consult with our clients and know what we may want to acquire. So that’s been a really good partnership, I think over the last, it’s been a long time.
Warren: Been like 10 years or something by now.
Jay: Yes, close.
Warren: So, the shift now becomes more over to Burgundy. But Burgundy, unlike Bordeaux of course to your point about five pallets, you’ve got tiny, tiny allocations of not very much. So how would you manage that?
Jay: Well, finding the wines is a challenge and finding them in quantity that can satisfy the market. We get requests from people ‘Oh, I’d love to get you know 20, 30 cases of La Tache’.
Warren: By the way, speaking of La Tache.
Jay: It’s opening up.
Warren: It really is opening up and I just had a big thing of a tea, like a green tea. That was really nice.
Jay: Yes, the intensity on that actually is stunning. So, finding the wines has been a challenge but we we’ve been lucky, we pivoted to Burgundy. I think we got in before this last wave and so we established some really good relations with suppliers globally. So, we’re able to still source, but it’s getting more and more competitive.
Warren: Now is it all levels of Burgundy that are good in your market or is it like only something that has a value of $500 or above or is it?
Jay: I would say it’s both. For sure at the very top end. We can’t satisfy enough demand for you know DRC, Loire, Rousseau, the top names you know and because you’re talking about a handful of cases and bottles here and there. But at the mid-range as well, there’s a lot of demand.
Warren: And where are you finding them outside of negociants.
Jay: Oh, throughout Europe. There’s dealers in Europe and the UK but we really try to find collections; I mean that’s our big thing. Good collections with people who’ve been buying, have a history of 20, 30 years, and for collections that haven’t moved.
Warren: Well and we’re the same because I want to walk into the guy’s cellar, I want to have a conversation with them, and understand how they’ve been collecting. Look at it and check the temperature systems. I mean, you’re never going to know every single bottle, we’re going to back it up no matter what, but you’ll never know every single bottle. But we do the same. I want to see and touch. Chances are, I mean, we’ve been in the business 15 years, if I don’t know them yet then we certainly have people in common.
Jay: I you work with somebody who’s been buying for 20, 30 years, you tend to know that the wine hasn’t moved. It hasn’t had a lot of owners which is what you’re looking for.
Warren: Well and that was always the reason why we liked sourcing from Canada. We don’t have a market, we don’t have a secondary market, a material secondary market and so it doesn’t move. It’s not in a trunk in Boca Raton somewhere for an afternoon. It’s come in from the winery and it’s here and that’s it, right. And so, what’s your growth? Where are you guys and how are you going to grow your company?
Jay: Well our growth.
Warren: You were mentioning other countries in Asia
Jay: Actually, we’re seeing a lot of demand regionally from places like Vietnam, Philippines, Korea is very strong. The number of collectors coming out of these countries is growing.
Warren: I know the bane of our existence is always how to move this product which is not only perishable but very delicate and taxed, depending on where you go.
Jay: Well, we’re not shipping to these other countries, they’re coming to us in Hong Kong.
Warren: Oh, is that right?
Jay: Because Hong Kong is the only jurisdiction in the world that is tax free on wine
Jay: And so there’s the infrastructure to support collecting, it already exists there. Since ‘08 when they got rid of the taxes, the number of wine storage facilities grows every year. Some of the best facilities in the world are in Hong Kong. So, a lot of these collectors, say from the Philippines, will have accounts at the warehouses in Hong Kong. They’ll buy from us, they’ll keep them there, they’ll pull them out when they come to Hong Kong to wine and dine. Or, you know, maybe hand carry a bottle or two back to their countries. But, it’s a big number, it’s a big number.
Warren: Oh, that’s interesting.
Jay: And Hong Kong is definitely the hub for that.
Warren: Yes, I wouldn’t mind actually. I was mentioning to you before that I’m going to be in Hong Kong in September and I’d like to see a warehouse operation. I’d be curious to see some of these storage facilities. I’ve got some other clients there who are doing exactly that so that’ll be interesting things to see. So, your business is growing mostly geographically, right? I mean your focus is always going to be at the high end of the scale to, you know, obviously a very particular clientele. What is it that makes you guys successful?
Jay: I think what has made us successful since the beginning has been our focus on service. You know, there’s no shortage of competition, especially in Hong Kong. So, what sets us apart is the quality of our wine, our service, our ability to deal with any issues that come up, and the breadth of our collections. I mean we’ve got a, you’ve seen the list, it’s pretty huge. So, there’s something in there for any taste or occasion. Our aspiration is not to grow huge but we want to grow organically and just keep, you know, it’s hard to scale up the luxury business.
Warren: It is and I always keep saying it’s slow roll, right? So as long as you just keep moving it forward and being a little bit better all the time and you’re servicing the right clients. There’s no overnight ‘something is going to change and triple what you do’. That doesn’t exist in our business so far as I know, not that I’ve seen.
Jay: No, we’re happy with where things are. We want to reach more people in other countries in the region and just be the best wine merchants in Asia; that’s our aspiration.
Warren: That’s a good aspiration. We have, I mean, we get a lot of collections, mostly from Canada, where I like to source them as I know where they’re from. So, we sell that which we can, to the base of people that we know, so it’s always good to be able to have a supplier who I can send a lot of our wines. I mean, we have a wholesale and a retail channel. It’s really what it is right? And so, we’ll find some wines that are more desired by our clients locally and then that which we don’t move locally, it’s always good to have another channel. And you guys have been a great partner as is evidenced by the fact that I got to serve you a La Tache for God’s sake.
Jay: Yes, that’s true.
Warren: I mean I had another supplier in earlier and only had a Skinny Girl rose. Nothing against Skinny Girl rose, it’s just that. Ah, anyway you know where I’m going. Cheers!
Warren: Thanks for coming. What’s your website? So that people who want to check it out when coming through Hong Kong, you’re in central?
Jay: Ginsbergchan.com. We’re in central Hong Kong on Queens Road which ,is if you drop the Google pin on Hong Kong, it basically lands on top of our office. So very convenient location, we have a lot of great wines in shop, and if you’re visiting Hong Kong definitely look us up.
Warren: Yes, if you’re a collector and you happen to be in Hong Kong, which everybody should experience, stop by and see our friends Jay and Mandy at Ginsberg and Chan. Jay, thanks for coming.
Warren: This is a lot of fun-
Jay: Can I have some more of that?
Warren: No. That’s it. You get one splash, that’s all you get. Anyway, thank you very much, we’ll see you in our next edition of Behind Fine Wine.