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USA market: ‘Stay positive and keep trying’

RD&E News | July 2019
Photo: Adobe Stock
12 Jul 2019
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Over the past few years, there has been much discussion around Australia’s efforts to regain prominence in the United States of America (USA) wine market.

It can be done and additional good news, according to new research, is that we don't need to develop a message specifically tailored to the USA, but we must be consistent with the existing premium image message which is part of Wine Australia’s overall sector strategy.

These are two of the messages to emerge from the ‘Driving the Strategic Growth of Australian Wines in the USA Export Market’ project, which has produced a snapshot of the current perceptions and wants of wine consumers and trade operators in the USA market of Australian wine and its key competitors.

The study was led by Assoc Prof Armando Maria Corsi and his colleagues – Prof Larry Lockshin, Prof Jordan Louviere, Dr Justin Cohen and Prof Johan Bruwer – from the Ehrenberg-Bass Institute and University of South Australia Business School; and supported by Wine Australia.

According to the project – the top three barriers for the growth of Australian wines in the USA market currently are:

  • lack of knowledge in the USA about Australia’s different wines regions
  • the perception of consumers that Australian wines are ‘low-priced’, and
  • wines from other countries are perceived to be easier to sell.

At the same time, USA trade operators believe that the critical factors for Australian wines to be successful in the USA market are:

  • the wines need to be easy to sell
  • the wines need to have a good reputation among the wine media
  • the wines need to have adequate retail shelf space
  • wine producers need to seen as committed to the market, and
  • wine producers need to know how to source the right importers.

Assoc Prof Corsi said the project found that, differently to consumers, trade operators don’t place regionality as high as other factors such as price.

‘This doesn’t mean they won’t care about it in the future, but we need to build, or re-build, a country image for quality wines around the US$19.99 price point first’, he said.

‘However, contrary to what the trade operators said, regionality was one the elements consumers do seem to care about, so we decided to test the importance of this factor to consumers.’

The report also found that Australia doesn’t exclusively own any of the above-mentioned factors, with other countries of origin contending for the same.

‘The issue doesn’t seem to be that importers, distributors and retailers believe Australia is performing poorly, but more a problem of distinctiveness: what can we do to make Australia stand out?’ said Assoc Prof Corsi.

Interestingly, the project didn’t find any differences in the responses from consumers and trade operators to different communication messages.

‘This is a positive result, because it means that we can communicate the message we prefer in the USA market, without running the risk that one message may jeopardise consumers’ and trade operators’ choices towards Australian wines.’

– Armando Maria Corsi

Assoc Prof Corsi said the message to the Australia wine sector was to stay positive and keep trying.

‘The USA is a tough market, but we can’t and shouldn’t lose hope. It’s critical that we differentiate our efforts in several export markets to increase the resilience of the Australian wine sector in case one of the export markets faces a crisis.’

However, he said Australia needed to find a way to stand out again in the USA market.

‘We can do it by pursuing several avenues under the premium umbrella-strategy: having a good reputation among media, having producers committed to the USA market and, once Australia’s image and positioning has improved, start talking more about our exceptional wine regions.’

The tide is turning for Australia’s reputation among the media in the USA. Features promoting renewed interest in the diversity of Australia’s regions, varieties and winemaking styles are appearing with increasing regularity in wine specialist publications including Wine Enthusiast and Wine Spectator through to general daily media publications such as The New York Timesjust to name a few.       

During the project, the research team developed a decision support system – The USA Wine Marketing Tool – designed to help producers focus their marketing efforts in the USA wine market more effectively.

The tool works in two different ways: it allows producers exporting to the USA to look at which consumers and trade operators they are currently targeting with their marketing efforts and find what brand features will be more effective; or alternatively, to look at their product feature offering and then find which type of consumer and trade segments are most likely to respond positively to their offer.

The USA Wine Marketing Tool will be revealed at the upcoming Australian Wine Industry Technical Conference later in July 2019.

Wine Australia has also developed other resources to assist wine companies wanting to better understand the USA market and how to navigate a successful entry – or re-entry. These include the Market Explorer, Market Entry Program, Growing Wine Exports program and additional consumer research through Wine Opinions and Wine Intelligence.

This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.