A new tool has been added to Wine Australia’s Interactive Insights platform today. The Grape Price Indicators dashboard brings together 12 different data sources and displays 21 charts in a user-friendly layout to provide greater price transparency for inland winegrape growers. Today’s Market Bulletin will provide background on the tool, the indicators, and a few tips for using the dashboard.
Background
In 2019, the Australian Competition and Consumer Commission (ACCC) released the wine grape market study, which identified a need for better price transparency and more balance in negotiating power between wine makers and grape growers. The Grape Price Indicators dashboard was developed with funding from the Commonwealth government through its Improving Market Transparency in Perishable Agricultural Goods Industries program, which provided funding of $989,000 towards development of the dashboard, a domestic sales collection, and a strategic partnership with ABARES to enable winegrape price forecasting. This funding was announced in early 2022.
The dashboard project has been delivered by Wine Australia and overseen by a consortium comprising Australian Grape & Wine, the Inland Wine Regions Alliance and Wine Australia. The selection of indicators, as well as the design of the dashboard, is a result of a significant co-design and consultation process with inland growers and their representatives.
Key indicators
The Grape Price Indicators dashboard opens on a “Summary” page which gives an at-a-glance view of the most important indicators for movements in inland winegrape prices (see Figure 1). While there are a multitude of factors that determine winegrape price, this page distils these down to six key indicators. The six indicators are divided into two groups: those specific to Australian grapes and wine, and those that provide insights to the global wine market.
Figure 1: Grape Price Indicators dashboard “Summary” page
Because recent trends are important in predicting future movements, all charts provide an historical look at the data. One of the most important indicators is the inland winegrape price itself (top left-hand chart). Downward trends in prices indicate a likely continuing downturn, at least in the short term.
As 60 per cent of Australia’s wine production is exported, another key indicator is the average value of exports (top middle chart); a decline in average value of commercial wine exports signals a declining demand for these wines in export markets and will likely result in downward pressure on prices for the grapes that go into that wine.
Another key indicator of future winegrape price movement is the volume of domestic wine sales (bottom left-hand chart). A decline in the volume of wine sales in the domestic wine market signals a fall in the demand for wine and is likely to result in downward pressure on winegrape prices. Similarly, a higher than ideal level of total stocks-to-sales ratios (bottom middle chart) indicates too much wine in stock and a reduction in demand for winegrapes, thus putting downward pressure on grape prices.
For global indicators, Australian wine prices on the global bulk wine market is a key driver, especially in relation to its competitors. Consequently, Ciatti bulk wine offer prices are included in the dashboard (top right-hand chart). The dashboard allows analysis of trends over the last five years, as well as Australia’s position when compared to Chile, Italy, South Africa, and Spain. The latest bulk wine prices are a major influence on the prices paid for inland winegrapes in the upcoming season.
Another key indicator is the global balance between wine production and consumption (bottom right-hand chart); production exceeding consumption implies an oversupply of wine globally, putting downward pressure on wine and winegrape prices.
The summation of all of these indicators is shown in the winegrape price indicator direction arrow, which can be found to the right of the “Inland winegrape price” chart (see Figure 2). The direction of this arrow is driven by a regression analysis on a selection of the datasets surfaced on the dashboard. A projected growth rate from the model of over +5 per cent results in a green upward arrow (growth), between +5 per cent and -5 per cent displays a yellow horizontal arrow (stable), and below -5 per cent is a red downward arrow (decline).
Figure 2: Price indicator arrow
Detail pages
For users wanting to delve deeper into the drivers behind winegrape prices, the dashboard includes four supplementary pages that provide more detail and context. These four pages are: “Supply and balance”, “Export demand”, “Domestic demand”, and “Global context”. Users can navigate to these using the buttons below the key indicators on the “Summary” page, or by using the tabs at the top of the dashboard (see screenshot below).
Figure 3: Top navigation bar of the Grape Price Indicators dashboard
Additional indicators on the “Supply and balance” page include the balance of wine production and sales in Australia (excess production putting downward pressure on winegrape prices and vice versa), and the price dispersion of purchased winegrapes (more grapes being purchased in lower price brackets signalling falling demand for those grapes and vice versa).
The “Export demand” page gives key indicators based on the Australian wine export data, in addition to contextual measures such as exchange rates and freight charges out of Australia (where higher levels of both are likely to squeeze margins for wine exporters and may mean that there is less margin available to pay for grapes). The “Domestic demand” page provides further data on the domestic market, including volume and average value trends from Circana retail scan data for bottled and cask wine (where diminishing volume and/or average value signals a decline in the demand for wine and thus winegrapes and vice versa). Lastly, the “Global context” page provides the latest global wine and consumer trends, such as commercial and premium wine consumption, as well as GDP per capita and the Consumer Confidence Index from key markets, which provide insights into consumers’ capacity to spend on luxury items such as wine.
Tips for using the dashboard
Most pages of the Grape Price Indicators dashboard have a colour and variety filter. Selecting a colour or variety changes the visuals on the page that can be filtered by colour/variety, and this filter is indicated in the heading of the charts. (Not all visuals can be filtered as this level of detail does not exist in every dataset.) The varieties available for selection in the filter were so chosen because they are the most common varieties grown in the inland regions of Australia.
Figure 4: Colour and variety filter
Three of the detail pages also include options for filtering on “Inland” or “Other regions” (on the Supply and balance page) and “Commercial” or “Premium” wine (on the Export and Domestic demand pages) where the Commercial segment is most relevant to the inland regions. These toggles are on the top right-hand side of the page, and when clicked, filter all charts on the page that can be filtered. The heading in the orange bar will change depending on the user’s choice. The definitions for these terms can be found in the information symbol next to the toggle.
Figure 5: Commercial vs premium toggle on Export demand page
Information symbols can also be found next to each visual, which explain each chart’s representations and what it can be filtered by (What), as well as the indicator’s effect on winegrape price (Why).
Figure 6: Stock-to-sales information pop-up
For most visuals, the data behind the chart can be downloaded by hovering over the chart until “More options” appears and then selecting “Export data”. A full-page snapshot of the dashboard can also be printed. To optimise printing, users should switch their layout to “Landscape” and enable “Background graphics”. For further information, a “Definitions and explanations” page can be accessed via the icon or through the buttons at the bottom of each page.