National Vintage Report shows larger crush and higher average price

Market bulletin | Issue 70

02 Aug 2017
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The National Vintage Report 2017 released today shows that there was a 5 per cent increase in the national winegrape crush to 1.93 million tonnes in vintage 2017, and a 7 per cent increase in the average purchase price for winegrapes to $565 per tonne.

As well as these headline national figures, the report provides an estimate of crush by variety nationally and by region, and an analysis of regional grape purchase value.

Tonnes crushed

In a continuing upward trend, the national crush is estimated to be 1.93 million tonnes – an increase of 5 per cent from the 2016 vintage. The increase in the crush reflects the excellent seasonal conditions in many regions and will help meet the growing demand for Australian wine, both in export and domestic markets.

The increase in the national crush came relatively equally from the cool and temperature regions of Australia and the warmer inland regions (Riverina, Murray Darling–Swan Hill and Riverland).  However, the tonnes from the cool and temperature regions increased by 9 per cent compared to a 3 per cent increase in the warmer inland regions. Vineyards removed from the production base saw production fall in the Murray Darling–Swan Hill region, which limited the overall increase in the warmer inland total.

The red grape share of the crush increased from 52 per cent in 2016 to 55 per cent in 2017 due to a 12 per cent increase in the red crush and a 2 per cent smaller white crush.

Vintage growth reflects export growth

The crush of most major red varieties increased, including Shiraz, Cabernet Sauvignon and Merlot. This comes as international demand for these varieties is growing. In 2016–17, Shiraz exports were up 15 per cent, Cabernet Sauvignon exports were up 11 per cent, Shiraz/Cabernet Sauvignon were up 14 per cent and Merlot exports were up 6 per cent. For all four, the two major export destinations were China and the United States of America (USA).

In the domestic market, IRI Market Edge Liquor data shows growth in sales of all four varieties. Shiraz is the second biggest selling variety behind Sauvignon Blanc but its sales are growing at three times the rate of Sauvignon Blanc. Cabernet Sauvignon sales also grew strongly and it is now the fourth biggest category in the domestic market.

For whites, a decline in the Chardonnay crush more than offset increased tonnages for other white varieties, such as Sauvignon Blanc, Semillon, Muscat Gordo Blanco, Pinot Gris/Grigio, Colombard and Prosecco.

For exports in 2016–17, Chardonnay grew by 7 per cent, Sauvignon Blanc by 30 per cent, Pinot Grigio grew by 14 per cent and Pinot Gris by 9 per cent. For all four, the USA and UK are the biggest markets.

The growth in Muscat Gordo Blanco crush reflects the strong export demand for Moscato. Moscato accounts for 70 per cent of the carbonated wine export category, which more than doubled in 2016–17 to $30 million.

Prosecco exports also grew off a small base, up 35 per cent to $1 million.

In the domestic market, Chardonnay is now the fifth biggest category, behind Sauvignon Blanc, Shiraz, sparkling white and Cabernet Sauvignon. According to IRI Market Edge Liquor, Chardonnay sales grew 2 per cent in the last year, with solid growth in sales above $15 per bottle offsetting a decline in those below $15 a bottle.

Also in the domestic market, there was double-digit growth in Pinot Grigio and Pinot Gris sales, Moscato sales were flat and Prosecco sales grew by more than 50 per cent.

Figure 1: Average export price and average winegrape purchase price trends 1999–2017

Price

The national average purchase price increased by 7 per cent to $565 per tonne, the highest since 2008. It is the third consecutive vintage where the average purchase price for winegrapes increased.

Figure 1 shows that winegrape prices have been on an upward trend since 2011. Prior to that, grape prices were on downward trend from 1999. It also shows that export prices and winegrape prices have tracked very closely over time.

All but two of the top ten varieties showed increases in the national average purchase price. Shiraz and Colombard had the greatest increases followed by Muscat Gordo Blanco, Pinot Gris/Grigio and Chardonnay. The two exceptions were Cabernet Sauvignon and Pinot Noir, which saw prices fall by 1 per cent or less.

There was an increase in the proportion of A and B grades purchased (i.e. $1500 and above per tonne) from 6.4 per cent to 7.4 per cent, which has contributed to the overall increase in the national average purchase price.

Shiraz was the biggest driver in the overall increase in the average purchase price as the share of Shiraz purchased at A and B grades increased from 13.3 per cent in 2016 to 15.5 per cent in 2017, which is double the proportion from five years ago.

 

About the report

Data for this year’s vintage report was collected on behalf of the sector across all winegrowing regions in Australia. We surveyed over 2000 wineries and received more than 500 responses that covered almost 90 per cent of grapes crushed. We would like to thank all wineries that participated.

This year, we collaborated with Wine Tasmania who conducted the Tasmanian component of the survey to ensure the best possible coverage and reduce duplication. We thank Wine Tasmania for their efforts and look forward to continuing to work closely with them on data collections.