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How Australian wine’s brand health is tracking in key markets

Market Bulletin | Issue 205
10 Jun 2020
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For the past decade, Wine Australia has engaged Wine Intelligence to track the brand health of the Australian wine category in key wine markets. For 2020, these markets were Australia, the United States of America (USA), the United Kingdom (UK), mainland China, Hong Kong, English-speaking Canada, Québec, Singapore, Japan, and South Korea.

The measures tracked are market penetration, quality perceptions and attitudes to Australian wine.

It should be noted that the study was undertaken in March 2020 and thus the impacts of the COVID-19 shutdown in most markets are not fully reflected.

Market penetration

For most key markets, the penetration of Australian wine has generally declined or has been stable over the past five years (see Figure 1).

Not surprisingly, Australian wine has the greatest penetration in the domestic market, with 84 per cent of regular wine drinkers having consumed Australian wine in the past six months. This is down from 87 per cent in 2018.

In Australia’s three biggest export markets, the United Kingdom has the highest penetration rate at 45 per cent and the rate has been relatively stable. This is a pleasing result given the Australian category has been number one in the UK off-trade market for two decades.

Australia is holding ground in mainland China. The penetration of Australian wine in mainland China at 37 per cent, is roughly the same as it was in 2016 but is higher than the rate over the previous three years.

In the USA, the penetration of the category has fallen over the past five years, from 21 per cent to 17 per cent, although the decline stabilised in 2020.

The penetration rate of Australian wine is showing an upward trend in Japan and South Korea, albeit off comparatively low bases.

Figure 1: Per cent of wine drinkers who have consumed Australian wine in the last 6 months

In terms of absolute figures, the greatest number of Australian wine drinkers are in mainland China, with 19.5 million people in 2020 (see Figure 2). This is 5 million more than in 2016.

While the penetration rate is relatively low, the second largest number of Australian wine drinkers are in the USA with 13 million people. However, there are 6 million fewer Americans drinking Australian wine than there were in 2016.

Figure 2: Number of Australian wine drinkers (millions)

Quality perceptions

Most key markets have experienced an increase in the quality perceptions of Australian wine since 2010. Survey respondents are asked to rate the quality of wines from Australia and its competitors from 0 to 10; the average scores over time are illustrated in Figure 3.

Australians rate the quality of Australian wine the highest, but the rating has dipped slightly in the past three years.

Among Australia’s key export markets, Australian wine has the highest quality ratings in mainland China and quality perceptions have continued to grow.

Australia’s strong position in the UK is also reflected in a quality rating that has grown over the past decade.

In the USA, the quality rating of Australian wine is higher than it was a decade ago but has lost some ground in the past two years.

Figure 3: Average quality perception score of Australian wine (rated from 0 to 10)

Attitudes to Australian wine

Most markets report that a high proportion of wine drinkers view Australian wine as good value for money (see Figure 4) and this proportion is growing. This is most pronounced in the domestic market and in the category’s top three export markets of China, the USA and the UK, with between 85 and 90 per cent of regular wine drinkers agreeing with the statement. This is higher than it was a decade ago.

Although the situation has improved, a much lower proportion of regular wine drinkers perceive Australian wine as being expensive or fine wine. The two stand-out markets for this measure are mainland China and the domestic market with around three-quarters seeing Australian wine as expensive or fine wine.

The USA and the UK are similar with around 40 per cent of regular wine drinkers recognising the category for its expensive or fine wines. This has improved from a decade ago but reflects that commercial/value wines dominate the Australian category in both markets. Data from IWSR shows that over 85 per cent of Australian wine sold in the USA and the UK is commercial/value wine.

Figure 4: Attitudes towards Australian wine (per cent who agree with statement)

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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.