It’s difficult to understate the importance of Shiraz to Australian wine. Shiraz is Australia’s most planted winegrape variety and is grown in most Australian wine regions. When the last national planting statistics were collected in 2015, there were around 40,000 hectares (ha) of Shiraz, ranking Australia second behind France (60,000 ha) and well ahead of third-placed Spain (20,000 ha).
Australia is home to the world’s oldest continuously productive Shiraz vines, with some of the oldest plantings believed to date back to 1843 (Langmeil, Barossa, South Australia), 1847 (Turkey Flat, Barossa) and 1860 (Tahbilk, Nagambie Lakes, Victoria). These ungrafted, pre-phylloxera vines produce small crops of grapes with intensely concentrated flavours.
Sales within Australia on the rise
In the Australian domestic off-trade market, Shiraz sales are on the rise. According to IRI Worldwide, in the 12 months ended 14 October 2018, Shiraz sales increased by 8 per cent in value and 5 per cent in volume. In comparison, total wine sales in the domestic off-trade market grew by 5 per cent in value and by 0.1 per cent in volume. The strongest growth for Shiraz is at $15–49.99 per bottle (in value):
- $15–19.99, up 14 per cent
- $20–29.99, up 9 per cent, and
- $30–49.99, up 23 per cent.
Shiraz is the second biggest selling category in the Australian off-trade market behind Sauvignon Blanc but it is growing at a faster rate (value growth for Sauvignon Blanc was 1 per cent and volume was flat in the last 12 months). Furthermore, Shiraz achieves a higher average price than Sauvignon Blanc ($18.11 per litre versus $13.88 per litre).
Exports growing strong
Packaged exports of single variety Shiraz are also on the rise. Over the past 5 years, Shiraz exports have grown from $389 million to $635 million (see Figure 1). This equates to a compound annual growth rate (CAGR) of 10 per cent per annum. In comparison, total Australian exports increased by 8 per cent per annum over the same period.
Figure 1: Packaged exports of single variety Shiraz (A$ million FOB)
Source: Wine Australia
In the 12 months ended September 2018, the strongest growth in Shiraz exports came in the following price points (see Figure 2):
- $2.50–4.99 per litre, up 8 per cent
- $5–7.49 per litre, up 14 per cent, and
- $10 per litre and above, up 13 per cent.
The largest category for Australian Shiraz is $10 per litre and above, which accounts for 46 per cent of the value of total Shiraz exports.
Figure 2: Packaged exports of single variety Shiraz by price point
Source: Wine Australia
Mainland China is fuelling the growth in Shiraz exports, growing in value by an average of 25 per cent per annum over the past 5 years (see Figure 3). Mainland China now accounts for just over half of Shiraz exports. Shiraz exports to the other destinations in Australia’s top five export markets by value – the United States of America, Canada, United Kingdom, and Hong Kong – are either flat or in decline, however they are growing to other markets including New Zealand (5-year CAGR of 10 per cent), Singapore (27 per cent), United Arab Emirates (113 per cent), Japan (8 per cent) and South Korea (47 per cent).
Figure 3: Packaged exports of single variety Shiraz by top five destinations
Source: Wine Australia
Discovering what makes our Shiraz uniquely Australian
Wine Australia is investing significant funds into research and development projects that are supporting growers and winemakers to produce Shiraz wines of exceptional quality and finesse, and also in discovering what makes our Shiraz uniquely Australian.
Over 6 years, Wine Australia is investing $5.3 million in 2 projects that are investigating how Australia’s climate, topography, soil chemistry and soil physical properties translate into physiological changes in grapevines that result in changes in berry composition and in turn result in the expression of terroir in wines.
The first project, led by the University of Adelaide, will determine marker compounds and chemical profiles for unique Australian Shiraz wines and determine how vines respond to express terroir.
The second, led by the National Wine and Grape Industry Centre, is a sensory-focused benchmarking project looking for correlations between the sensory properties of a relatively large and diverse set of Australian Shiraz wines, their chemical profiles and the climatic regions from which the grapes were sourced.
These two projects will help winegrowers better understand how they can refine the expression of terroir in their vineyards, so that they can produce wines that express their unique terroir with greater confidence and increase the premium paid for their wines.