The latest insights for Australian Cabernet Sauvignon

Market Bulletin | Issue 216
25 Aug 2020
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Cabernet Sauvignon is the world’s most planted winegrape variety and it is celebrated around the globe on 3 September with International Cabernet Sauvignon Day.

According to Wine Australia’s National Vintage Report 2020, Cabernet Sauvignon is the third most crushed variety in Australia, behind Shiraz and Chardonnay (see Figure 1)

Figure 1: Top 5 varieties by size of crush in 2020 (tonnes)

Source: Wine Australia

Australia’s Cabernet Sauvignon crush peaked at just over 288,000 tonnes in the record national vintage of 2017. Like the overall vintage, the Cabernet Sauvignon crush has been below this peak in the past three vintages (see Figure 2). But, in 2020, it was still higher than what it was 5 years ago.

Figure 2: Crush of Cabernet Sauvignon over time (tonnes)

Source: Wine Australia

While the tonnes crushed are down, the average purchase price of Cabernet Sauvignon has been on upward trend (see Figure 3), growing from $559 per tonne in 2015 to $876 per tonne in 2020.

Figure 3: Average purchase price of Cabernet Sauvignon grapes

Source: Wine Australia

Cabernet Sauvignon is grown in most Australian wine regions but 93 per cent of the crush was from 10 regions in 2020 (see Figure 4).

Figure 4: Top 10 regions for Cabernet Sauvignon by crush, 2020

Source: Wine Australia

The increase in the average purchase price of Cabernet Sauvignon reflects the growing demand for Australian Cabernet Sauvignon wines in export markets over the past five years (see Figure 5).

The value of Cabernet Sauvignon exports has grown by a compound annual growth rate (CAGR) of 12 per cent over the past five years, from $366 million in 2014–15 to $639 million in 2019-20. Two-thirds of the value in 2019–20 was single variety and one-third was blends where Cabernet Sauvignon was the main variety on the label. The growth in single variety exports has been stronger than that for blends (a five-year CAGR of 13 per cent compared to 9 per cent). However, the average price of Cabernet Sauvignon blends at $9.60 per litre ($86 per case) was higher than that for single variety exports at $6.51 per litre ($59 per case).

Figure 5: Exports of Australian Cabernet Sauvignon wines over time (A$ million FOB)

Source: Wine Australia

In 2019–20, 111 destinations around the globe imported Australian Cabernet Sauvignon. Just over half the value of the exports went to mainland China, with the United States of America, United Kingdom, Hong Kong and Singapore rounding out the top 5 (see Figure 6).

Over the past five years, the growth has been strongest to mainland China (a CAGR of 37 per cent) compared to the USA (3 per cent) and Singapore (14 per cent). Over the same period, exports declined to the UK (3 per cent) and Hong Kong (13 per cent).

Figure 6: Top 5 export destinations by value for Australian Cabernet Sauvignon exports, 2019–20

Source: Wine Australia

There has also been solid growth in Cabernet Sauvignon sales in the domestic off-trade market. According to IRI MarketEdge, the value of Cabernet Sauvignon sales increased by 4 per cent to $540 million in the 12 months ended 5 July 2020. Just under two-thirds was single variety Cabernet Sauvignon, with under a quarter Cabernet Sauvignon Merlot and close to 15 per cent was other Cabernet blends.

Single variety Cabernet Sauvignon recorded the strongest growth rate, up 5 per cent in value, compared to 1 per cent for Cabernet Merlot and 2 per cent for Other Cabernet blends.

The price point profiles of the three categories vary. For Other Cabernet blends, 90 per cent of the value of sales were above $15 per bottle in the latest year, while for single variety Cabernet Sauvignon the share was 60 per cent and for Cabernet Merlot, 25 per cent.

In all three categories, the rate of growth was stronger at $15 or more per bottle compared to below $15.

Figure 7: Sales of Cabernet Sauvignon in the domestic off-trade market by price points, 12 months ended 5 July 2020 ($ million)

Source: IRI MarketEdge


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