Organic and biodynamic wines: a growing niche market for Australian wine exports

Market Bulletin | Issue 55

18 Apr 2017
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Media interest in organic and biodynamic wines has been growing, reflecting a broader trend in the community for products that are seen as environmentally friendly and/or healthier.

In the UK, a recent article in the Guardian reported that sales of organic beers, wines and spirits rose by 14.3 per cent in 2016, while the discount supermarket Aldi launched its first collection of so-called ‘green’ wines in early April, offering a small selection of wines with organic, carbon neutral or ‘no added sulphur’ credentials.

Increased consumer interest in organic products (particularly food and drinks) has been identified as one of the top consumer trends for 2017. This trend was found to be higher among wine drinkers than consumers as a whole and was considered important by around 35 per cent of regular UK wine drinkers, which represents a significant market segment (Wine Intelligence, March 2017).

For Australian exported wine to make a claim to be organic, it must be certified organic by an organic certifying organisation approved by the Department of Agriculture and Water Resources. Any reference to organic, bio-dynamic, biological, ecological or any other word of similar indication on a label is taken to be an organic claim and must be supported by evidence of certification in order for it to be exported. Additionally, some markets also require additional certification from an in-market certifying organisation.

Certified organic or biodynamic wines exported from Australia are a niche but growing export segment that was worth $12 million in 2016. While it only accounted for around 250,000 cases (less than one per cent of all Australian wine exports), this small part of the market grew by 37 per cent in value and 50 per cent in volume in 2016 compared with the previous 12 months, and has grown over the past four years at a compound average growth rate of over 50 per cent in both value and volume.

Shiraz, Chardonnay and Cabernet Sauvignon were the top three exported varieties with organic certification, reflecting their overall position as the top three exported varieties, while the fourth largest organic variety exported was Viognier, which is 20th overall, followed by Grenache and Riesling.

Variety

Rank for organic exports

Overall rank

Shiraz

1

1

Chardonnay

2

2

Cabernet Sauvignon

3

3

Viognier

4

20

Grenache

5

14

Riesling

6

13

 

The main market for Australian exported organic and biodynamic wines is Sweden, which accounted for 31 per cent of all wine in this category. Exports of organic wines to Sweden grew by 58 per cent in value in 2016. The UK was ranked second with 24 per cent of exports, followed by Canada (8 per cent), the US (8 per cent) and China (7 per cent). Exports to Canada grew by 125 per cent in value in 2016.

The vast majority (85 per cent) of organic/biodynamic wine exported in 2016 was bottled and it had an average price of $7.17 per litre FOB, compared with $5.48 across all bottled exports. In each of the top markets, particularly the US and the UK, the average price for organic wines was much higher than for bottled wine overall.

Variety

Av price for organic exports (A$/litre FOB)

Overall average price (A$/litre FOB)

Sweden

5.03

4.41

UK

9.12

4.18

US

11.78

3.92

Canada

8.60

5.62

China

7.97

6.69

 

However, generally the costs associated with producing organic wine are significantly higher than for standard vineyard management and exporters should undertake a cost–benefit analysis before considering switching to organic production.

For more information on the opportunities for organic, biodynamic and sustainable wines in Sweden, see Meningers Wine Business International’s 2016 analysis.

For questions relating to exporting organic and biodynamic wines contact exports@wineaustralia.com.