Cabernet Sauvignon is the world’s most widely planted grape variety. Australia is home to what are believed to be among the oldest productive Cabernet Sauvignon vines in the world, located in the northern Barossa Valley (planted in 1886).
Today, Cabernet Sauvignon (24,862 hectares in 2015) is the second most-planted red variety in Australia after Shiraz (38,893 hectares). Australia is one of the world’s major producers of Cabernet Sauvignon, ranked fourth in plantings behind France (54,434 hectares), Chile (40,728 hectares) and the United States of America (USA) (34,788 hectares).
Cabernet Sauvignon can be found in most Australian wine regions. While Coonawarra and Margaret River may be better known regions for producing premium Cabernet Sauvignon, in recent times, others have emerged as contenders including Yarra Valley, McLaren Vale, Langhorne Creek and Barossa.
Cabernet’s success as a standalone and blended variety
Cabernet Sauvignon is successful in Australia as a standalone variety wine and as a dominant feature in classic blends. The structure of Cabernet Sauvignon is such that it can benefit from blending with other wine varieties, Cabernet–Shiraz, for example, is a uniquely Australian blend that is highly successful. In addition to Shiraz, grapes that are typically blended with Cabernet Sauvignon include Merlot, Cabernet Franc, Malbec and Petit Verdot.
The market profile of single variety versus blends varies for Cabernet Sauvignon. For both exports and the domestic market, single variety Cabernet Sauvignon is by far the most popular.
In the 12 months ended March 2019, exports of single variety Cabernet Sauvignon totalled $338 million at an average value of $6.56 per litre FOB (free-on-board) while Cabernet Sauvignon blends totalled $155 million at $10.71 per litre. China is the number one destination for Cabernet both as a single variety and blends, while the United States of America (USA) is second in single and third in blends. Singapore is the second biggest destination for blends.
Cabernet is the biggest selling red wine in the USA
The USA is one of the most significant markets for Cabernet Sauvignon. According to Shanken’s Impact Databank Review and Forecast, Cabernet Sauvignon was the biggest selling red wine in the USA in 2017, with 49 million cases sold – more than double second-placed Merlot with 21 million cases. By comparison, Australia’s number one red variety Shiraz is a relatively small category in the USA with 3 million cases sold in total.
By 2020, the market for Cabernet Sauvignon is forecast by Shanken to grow 51.5 million cases.
According to IRI Worldwide, the growth in Cabernet Sauvignon sales in the USA off-trade is coming at US$11 or more per bottle. In the 12 months ended March 2019, sales at US$11.00–14.99 grew by 8 per cent, at US$15.00–19.99 by 12 per cent, at US$20.00–24.99 by 5 per cent and at US$25.00 or more by 1 per cent. The growth for Australian Cabernet Sauvignon is coming at US$8.00–10.99 (up 35 per cent) and US$11.00–14.99 (up 47 per cent).
Number one variety consumed by Chinese urban upper-middle class imported wine drinkers
According to the Wine Intelligence China Landscapes Report 2019, Cabernet Sauvignon is the number one variety consumed by Chinese urban upper-middle class imported wine drinkers.
The report shows that 45 per cent consumed Cabernet Sauvignon in 2019 compared to 25 per cent for Riesling, 22 per cent for Sauvignon Blanc and 21 per cent for Pinot Noir. The share of those drinking Cabernet Sauvignon is down from 51 per cent in 2018.
This could be partially due to Chinese wine consumers broadening their palates. For example, the share of those drinking Shiraz increased from 10 per cent to 13 per cent over the same time period, which is predominantly from Australia.
Australia’s second biggest selling red wine
According to IRI MarketEdge, Cabernet Sauvignon is the second biggest selling red wine behind Shiraz in the Australian off-trade market (for the 12 months ended 28 April 2019). Bottled single variety Cabernet Sauvignon ($320 million) leads Cabernet blends ($189 million). There are also differences in the price point profiles for each (see Figure 1).
While $15.00–19.99 per bottle is the leading price point for Cabernet Sauvignon, below $6 is the biggest segment for Cabernet blends. Interestingly, Cabernet blends have a greater share than at $50.00–99.99 compared to single varieties. For single Cabernet Sauvignon, there was double-digit growth between $15.00–29.99 while for blends there was double-digit growth at $50.00–99.99.
Figure 1: Australian off-trade market by price segment value share for bottled Cabernet Sauvignon – singles v blends (12 months ended 28 April 2019)