Premium Australian wine is in a fantastic place at the moment. In the twelve months to June 2016, the value of Australian wine exports grew by 11% to $2.11 billion while volumes increased by 0.5% to 728 million litres according to a recent Wine Australia export report. The average value of exports also grew by 11% to $2.89 per litre - the highest level since February 2010 - which was driven by bottled exports, most notably at higher price points. These encouraging figures are in part due to the fall in the Australian dollar which has seen a relatively sharp decline against the Australian dollar, the yuan and sterling since the end of 2014, but is there more to this success continuing success story...?
The rise of premium Australian wine: more than a dollar’s worth
While currency fluctuations have undoubtedly helped Australian wineries export more, they do not account for the rise in the average bottle price. Indeed you would expect the opposite to occur; especially given the troubles that have hit the major western economies since the 2008 financial crash and the recent slowdown in China’s economy. So how is it that average bottle prices are on the rise and Australian wine saw exceptional growth to mainland China with total export value increasing by 50% to $419 million? Laura Jewell, Head of Market for the UK and Europe, believes it is a combination of the ever-increasing quality of Australian wine and an increased awareness of its premium quality:
'Customer and trade perception is increasing due to greater knowledge of regions and styles. The quality of the wines has never been better and speak for themselves. The landscape of Australian wine has never looked more diverse and exciting. Journalists and sommeliers across the globe are rediscovering the quality, finesse and innovation that is going on in Australia.'
Laura Jewell, Head of Market UK and Europe
The quality factor is certainly borne out by the latest data. Exports in the premium sector - i.e. those above $10 per litre - increased by 26% to a record $499 million. This continues the 2015 trend which saw the ultra-premium segment- A$20 to A$50 - grow by 13% and the fine wine sector, the sort of wines that populate the Langton's Classifications, grow by a massive 54% to A$133 million.
The secret of premium Australian wine’s success
So why is it that Australia is seeing such a growth bonanza in its premium sector – even in large and mature markets such as the UK? The answer to that seems to rest with a number of contributing factors. The rise of new styles of Australian wine, ones that can be broadly characterised as being lighter and more food-friendly has doubtless helped. These wines often use innovative varieties such as Arneis and Pinot Gris or are new style reinventions of Australian wine stalwarts like Grenache, a varietal that is enjoying a new lease of life at the hands of new generation of winemakers. Trade and consumer education has undoubtedly played a key role too. Regional trade bodies have worked hard to bring their wines to the attention of buyers and journalists and have organised events and masterclasses to do just that. The Mornington Peninsula Vignerons’ Association, for example, hosted an extremely successful UK event in May which showcased a range of premium wines that were met with great enthusiasm. Matthew Jukes commented, ‘Mornington Peninsula is in the highest global echelon of Pinot Noir regions…’ Annual trade events such as Wine Australia’s Australia Day Tastings (ADT) have also provided great opportunities for advancing Australia’s premium cause, and at the 2016 event there was no shortage of enthusiasm for both the premium sector and Australian wine’s regional identities. Jo Ahearne MW, who attended the London ADT, told The Drinks Business, ‘The exciting thing is that there is no such thing as ‘one Australia’… There are all the regions and people can start exploring that now – I think people are ready.” The realisation that Australian wine doesn’t have a single face but 65 regional ones that are waiting to be explored, has to be considered a breakthrough for Australian wine as a whole. From Riverland to Margaret River the Barossa Valley to the new cool climate regions of Australian wine, wherever you turn at the moment there is something new and exciting to discover. This and the willingness, the desire, of consumers to trade-up and experiment has created a momentum that is palpable and which points directly to the rise in export prices.
Simon Thorpe MW, Managing Director of Negociants UK
, summed up the mood at the ADT when he said, ‘Australian wine has been on an upward curve for some time now, but trend is all about momentum, and if the momentum turns with us then we will be hard to stop. We still have work to do translating positivity into commercial success at higher price points, but there’s no doubting we are heading in the right direction.’
Premium Australian wine: together we can build something special
The momentum has built behind premium Australian wine and it is in the interests of all those connected with the Australian wine trade – be it as an exporter, educator, merchant, importer or journalist – to help sustain and build that momentum. This latest crop of impressive trade figures could be just the start of something if we all work together to capitalise on this deserved excitement. As Wine Australia's regional director for the UK and Europe, Laura Jewell MW, put it at the culmination of the Australia Day Tastings 2016, 'We attracted more winemakers in market than we have previously to help tell our stories of people, place and provenance and we now need to ensure that we build on what has been a very positive start to the year.' A sentiment we can all wholeheartedly agree with. Read additional articles related to the June 2016 Export Report:
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