Much like judging a book by its cover, the style of a wine can determine many of the expectations a buyer has well before tasting it. A consumer may look at a bottle of red and make inferences about not just colour and taste, but also the wine making technique, time spent ageing, and even the region where the grapes were grown. These anticipations could be very different for a bottle of white or sparkling wine. While each wine is unique, grouping them according to style can be helpful to look at what is trending around the world.
This Market Bulletin will start with still red wine, which makes up 61 per cent of exports by volume (see Figure 1).
Figure 1: Volume share of exports by wine style
In 2018, Australian exporters shipped over $2 billion worth of red wine to overseas markets, growing 12 per cent in value from the year before. As illustrated in Figure 2, it is overwhelmingly the most popular wine style that producers choose to export. Interestingly, it makes up a much larger share of the smallest exporters’ volume than it does for bigger exporters.
Figure 2: Wine style share of exported volume by exporter size
Not surprisingly, the number one destination for red wine exports is mainland China, accounting for nearly $1 billion of red wine. Exports to mainland China also grew by the largest amount in the past 12 months ($191 million). Other top destinations for Australian red wine are the United Kingdom (UK), the United States of America (USA), Canada and Hong Kong. However, there are smaller destinations that are experiencing much higher growth in red wine imports:
- Singapore, up by 24 per cent to $75 million
- Japan, up by 24 per cent to $30 million
- United Arab Emirates, up by 63 per cent to $24 million
- Thailand, up by 31 per cent to $19 million, and
- Taiwan, up by 55 per cent to $18 million.
The value of red wine exported at an average value per litre FOB of $10 and above grew by 23 per cent to $837 million in 2018. As growth in premium red wine outpaced the commercial end, the average value of red wine increased by 6 per cent to $4.15 per litre.
In the domestic market, red wine also dominates the market by value and is experiencing healthy grow rates, particularly in the price range of $15 to $50 per bottle[i].
White wine has a 38 per cent volume share of exports and grew by 10 per cent in value to $606 million in 2018. As illustrated in Figure 2, the largest exporters (above 100,000 9L cases shipped per year) over-index when it comes to white wine’s share of their exports.
Using the Market Explorer tool is a simple way to illustrate which markets import the most Australian white wine. By using the ‘Where is Australian wine exported to?’ report and filtering on Dry White, the top markets are easily identifiable (see Figure 3).
Figure 3: Australian white wine destinations by value
The USA is the number one destination for white wine and grew by 6 per cent in value to $186 million in 2018. The other top destinations for white wine are the UK, Canada, mainland China and the Netherlands. Canada has grown by the largest amount in the last 12 months (see Figure 4), although almost all markets in the top 10 experienced growth. The average value of white wine has grown by 3 per cent to $1.89 per litre, with growth coming from across the price point spectrum.
White wine in the Australian market has a flat growth rate, with growth in the higher price points above $15 per bottle outweighing the decline in the market below $15.
Figure 4: Year-on-year change in white wine value, top 10 white wine markets
The imagery associated with opening a bottle of sparkling wine tends to be much more celebratory than that for still wine, although this is starting to change as sparkling is evolving to become more of an everyday drink. Even so, bottles of sparkling have a distinct look, adding to the uniqueness of the product and giving the consumer certain expectations about what is inside.
Sparkling wine has a 1 per cent share of Australia’s wine exports and these declined in value by 2 per cent in the past 12 months to $48 million. However, exporters who ship between 50,000 and 100,000 9L cases per year export more sparkling as a proportion of their exports than other exporter groups (see Figure 2).
Mainland China is the top importer of Australian sparkling wine by value and grew by 3 per cent to $7.7 million in 2018. It is followed by Singapore, Japan, New Zealand and the UK. However, Hong Kong has experienced the largest growth in value, which almost doubled to $2.5 million. Markets such as Thailand, Sweden and South Korea have also experienced high growth rates in the last 12 months.
Sparkling wine sales in the domestic market are growing steadily, with the $15 to $20 per bottle segment being the outstanding performer.