Photo: Elements Margaret River

Analysing the opportunities in the USA on- and off-trade

Market Bulletin | Issue 116
Photo: Elements Margaret River
18 Jul 2018
tagged with trends , USA , iri , sales , Australia Decanted
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This Sunday (22 July), key USA trade and influencers will experience Australia’s vibrant and exciting wine culture on their own home soil at Australia Decanted, a four-day, invitation-only symposium exploring the varieties, regions and styles of wine that make Australia’s one of the world’s most diverse and thrilling wine scenes.

To coincide with the inaugural symposium, this week we look at recent sales statistics that are pointing to some positive signs for the Australian wine category in the USA that provide opportunities for the Australian wine sector to build on.

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Photo: Wine Australia

USA customers paying more for a bottle of Australian wine in the off-trade

USA off-trade sales data from IRI for the 12 months ended 1 April 2018 shows that, while volume declined 1 per cent, the value of Australian wine sales increased by 2 per cent. USA consumers paid on average 2.3 per cent more for a bottle of Australian wine than in the previous 12 months.

The decline in volume was principally due to a 6 per cent decline in sales of Australian wine at US$4–7.99 per bottle, a segment that comprises 41 per cent of the USA off-trade market and accounts for 88 per cent of Australian wine sales. On the other hand, sales of Australian wines priced US$8–10.99 per bottle doubled, and sales of those priced US$20–24.99 per bottle grew by 31 per cent.

Cabernet Sauvignon was the stand-out performer for Australia with sales, up 9 per cent and with growth in all price points between US$8 and US$25 per bottle.

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Photo: Wine Australia

Australia’s volume and value on the rise in the on-trade

There are also some optimistic results for Australian wine in the USA on-trade market. According to Nielsen/CGA, both the volume and value of Australian sales increased in the 12 months ended 24 March 2018.

Volume increased by 4.4 per cent and value by 3.6 per cent. The volume growth came at the expense of price, which fell by 0.8 per cent. Australia’s rate of volume growth was only exceeded by French wines.

The strongest growing on-trade channel for Australia was the Chains channel (an outlet with more than one branch), with sales up 18.4 per cent in volume and 19.9 per cent in value. Consumers in the Chain channel also paid on average 1.3 per cent more per bottle of Australian wine this year compared to 2017.

Changing perceptions

The USA has the largest number of Australian wine drinkers in the world at 18.05 million people – and there is still room for growth, with this number accounting for 19 per cent of regular imported wine consumers in the market.

Wine Intelligence’s recent report on the consumer perceptions of Australian wine showed that quality perceptions of Australian wine in the USA have seen a significant increase over the past 8 years, from 7.82 in 2010 to 8.14 in 2018.

One of the aims of Wine Australia’s activities in the USA is to continue to challenge the perceptions of Australian wine to support renewed enthusiasm and export growth, and to help Australian wine capture more of the growing premium wine segment.

With the support of the Australian Government’s $50 million Export and Regional Wine Support Package, Australia Decanted will deliver key messages about Australian wine and encourage stronger engagement with the USA wine community. The four-day symposium at Lake Tahoe, California will provide 100 key trade, influencers and media in the USA a fresh understanding of the people, the culture and the places shaping Australian wine today.