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Exploring the research that will underpin the largest Australian wine promotion ever held in the USA

Market Bulletin | Issue 172
03 Sep 2019
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Wine Opinions’ five-year trade and consumer research program (funded by Wine Australia) is now complete, and the final year report has revealed the key areas that should be a focus for Australian wine promotion in the United States of America (USA).

As reported in the market bulletin ‘Embracing the evolution in the USA market’, Wine Opinions’ findings to date have helped inform the largest Australian wine promotion ever held in the USA – the Far From Ordinary campaign, which will kick off this month with hundreds of participating wineries working together in the market.

The research-directed campaign will help to continue to shift the needle towards increasing consumer demand for Australian wine, improving access, building awareness and changing quality perceptions.

In this Bulletin, we present some of the findings of the final year research (conducted in 2019), which compared trade and consumer perceptions of Australian wine to the research conducted at the beginning of the project and evaluated responses to Wine Australia’s evolved campaign strategy in the market. So how did we go?

Essentially, the results highlight four key opportunities for Australian wine that are being integrated in Far From Ordinary and are explored below.

Change the perceptions among key influencers, particularly distributors

Key influencers are essential for ensuring that Australian wine is available on the shelf, making it easier for consumers to find Australian wine. In such a highly competitive environment this is critical.

Results from the study highlight the frustration that consumers continue to have with one of the biggest dislikes for those who buy Australian wine over $15, and give high ratings to their quality, being that they are ‘hard to find’.

During the five-year research period, Wine Australia has worked closely with trade, distributors and key influencers to change perceptions and the results from the recent trade survey show improvements. These include:

  • Even among respondents who do not sell Australian wine, there is significant interest in learning about new or different wines, with 40 per cent of non-sellers stating such interest, up from 36 per cent in 2016. More respondents were also interested in, or optimistic about, some Australian wines and there were fewer responses around a weak or negative sales outlook (Figure 1).
  • Respondents were mostly of the opinion that the Australian wine share of the USA market will experience some growth in the coming five years. Up from 51 per cent in 2015 to 60 per cent in 2019.

Figure 1: Non-seller agreement statements – trade report

Encourage more Australian exporters to enter or re-enter the USA market

Barriers in the traditional route to market for the USA have increased for small producers as a result of the challenging and complex three-tiered distribution system. This has in part led to a significant number of premium Australian wine brands exiting the USA market over the past decade.

The USA Market Entry Program aims to assist Australian wine brands in navigating the USA system and involves the facilitation of meetings between winery and importers, which can go a long way in building networks and promoting brands. Results from the trade survey confirm this showing that visits to trade accounts by winemakers from the region were given the highest ‘very important’ rating from 69 per cent of respondents. This is up from 54 per cent in 2015 (Figure 2). Informational email newsletters were considered less important at 21 per cent ‘very important’ and hasn’t changed since 2015.

Another finding from the survey was that when it comes to the leading decisions factors in adding $20 wines to the portfolio, half of respondents felt that the type, region, or price range needed to fill a gap was very important. Half also felt that choosing a wine if they personally liked it was also very important.

Figure 2: trade report  the importance of specified promotional initiatives  ‘very important’

Educate both trade and consumers on Australian varieties and regions

Education is a key component of Far From Ordinary to help improve knowledge and awareness. Both surveys showed an appetite from respondents to learn more about Australian wine with key findings highlighting that:

  • Even among trade survey respondents who do not sell Australian wines, there is significant interest in learning about new or different wines from the region, with 43 per cent of non-sellers stating such interest.
  • More than half of the consumer survey respondents (58 per cent) agreed that most people don’t know about the smaller, artisanal wineries of Australia. Slightly more than half indicated they were intrigued by the different regions and appellations of Australia – a sentiment strongest among younger respondents.
  • By a wide margin, consumer survey respondents had a greater interest in gaining their information on wine at in-store tastings. Advice for a variety of sources formed a second tier, led by advice from a sommelier in a restaurant or a knowledgeable staff person in a retail store, which was of most interest to younger respondents (Figure 3).

Figure 3: consumer report – interest in sources of wine information

Change consumer perceptions of Australian wine and take advantage of opportunities in the premium end of the market

Consistent with other data sources, the Wine Opinions research indicates that overall consumption and awareness of Australian wine has declined during the research period.

Further to this, in the 2019 study, 1 in 4 consumers surveyed said they have not often seen Australian wines where they shop, and/or that Australian wines have not been recommended to them. Another one-third of respondents stated that they don’t know enough about Australian wines to know what they might like.

Figure 4: Consumer survey comparison summary

Over the past decade, Australian wine has saturated the commercial/value end and in 2016, 1 in 5 respondents noted ‘good value’ as something they liked best about Australian wine. But in present day, this trait is less appreciated.

Recently, growth has been recorded in wine sales in the USA at the premium end of the market, while sales in the big volume, commercial/value end of the market are in decline.

When questioned on the opportunities for wine priced over $15 in the 2019, respondents from the trade survey were quite optimistic in their ‘quality for the price’ perceptions with a significant increase in value seen in Australian white wines over $15, along with value increases seen in Australian red wines both at the over $15 and over $20 price points.

Further to this, each of the wine varieties or types that are the focus of Australia’s promotional efforts in the USA are seen by respondents as having high degrees of growth potential, especially in the $15–19.99 and over $20 price categories.

These positive perceptions have also been felt in sales with more than twice as many trade survey respondents reporting gains over the past 2 years in Australian wines retailing over $15 compared to those under $15. There were also one in four respondents indicating that they were selling more Australian wines labeled with specific regions, rather than country or large zone designations.

The Wine Opinions reports are available here.

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.