9 Nov 2011
Caleb Ng (centre) set up Angeleno Wine Merchant with his brother, Joshua (right), and friend, Jason Ho
The abolition of Hong Kong’s wine tax three years ago has brought countless new business opportunities for local entrepreneurs with a passion for wine. Among them is Hong Kong-born, United States-educated Caleb Ng, who decided to meet an untapped demand for fine California wine.
“I found there weren’t very many choices of quality American wine in Hong Kong, so I came up with the idea of importing special wine products from California,” said Mr Ng, who initially planned to go into investment banking soon after graduating from the University of California in Los Angeles.
Instead, he set up Angeleno Wine Merchant in 2009 with his brother Joshua, and friend, Jason Ho, starting with HK$20,000 in seed money. Exhibiting at the HKTDC International Wine & Spirits Fair later that year, the entrepreneur said he met many new clients at the event. “That’s when I realised that being a banker might not be suitable for me. I had a great interest in the wine business, which looked very promising,” Mr Ng said.
Angeleno sources high-quality California wine, mainly from Napa Valley. Only an eighth the size of Bordeaux, the county is home to more than 350 wineries, producing about 10 million cases a year. Boutique wineries, however, produce only a few thousand cases a year.
Mr Ng focused on building partnerships with smaller wineries, such as Peterson Winery, which was started by a retired navy soldier who Mr Ng said insists on selling only high-quality vintage. “The wine produced in 2006 to 2008 did not live up to his expectation, so he didn’t export any wine from those years. I thought, ‘this is exactly the kind of partner I want to find,’” Mr Ng said.
Angeleno Wine Merchant retails wine from California’s famous
“I prefer to work with smaller wineries because they go through every process themselves, from selecting the soil, to planting, viticulture, harvest and marketing. To a certain extent, this is something that major wineries cannot compete with,” Mr Ng said, adding that smaller wine producers always put quality first.
Like many in the wine business, Angeleno has its eye on the fast-growing Chinese mainland market, where an expanding middle class no longer sees wine necessarily as a luxury. Mr Ng said the average price people are willing to pay there now has doubled, to about Rmb150 per bottle. But with American wine fairly new to mainland consumers, pricing is important when promoting new wine.
“It is difficult to sell a bottle of American wine for a few hundred Hong Kong dollars to someone who has never tasted this kind of wine,” he said. “But if the price range is between HK$100 and HK$200, they are willing to try.”
Consumers usually get double the value for the price of a fine American wine, according to Mr Ng. “In most cases, if you bought a $200 bottle, you are actually getting a $400 quality. For instance, one wine I sell, Eloge, is a really elegant, balanced and yummy wine. While I can't say it's cheap [at HK$660], you are definitely getting more than what you are paying for,” Mr Ng said.
Elvis and The Beatles
Caleb Ng, Director of Angeleno Wine Merchant, said wine start-ups should sample a variety of wine from as many countries as possible
Mr Ng added that American wine pairs well with Asian cuisine. “Zinfandel, a signature grape grown in California, goes well with Cantonese cuisine,” he said.
While there will always be customers who prefer wine from other parts of the world, Mr Ng is philosophical when he says, “If they like Elvis Presley or The Beatles, we can’t force them to listen to pop music,” he said.
Staying in Business
The local market is set to get more competitive for distributors like Angeleno, as more US wineries come to Hong Kong to promote their products. But the company offers such extras as free delivery for any purchase above HK$1,000 and will make an effort to deliver for even less if it’s along the delivery route. The company also helps customers to source wines from small operators in countries such as Spain.
Two years on, Mr Ng has some advice for those who want to go into the potentially lucrative business: “Don’t ride on new brands without doing your homework. For me, research involves trying as many kinds of wine as possible, no matter if it’s from Thailand, Switzerland or Israel. That’s how I keep up with new trends, tastes and markets around the world.”
Angeleno Wine Merchant