Finding new pathways to US consumers for Australian wine

COVID-19 restrictions have shattered the on-premise market for wine sales in the United States – Australia’s second largest export market by volume – resulting in lower total wine sales and significant revenue losses for some US wineries, according to the latest Rabobank Wine Quarterly report.

Over March and April 2020 combined, there was an estimated USD47 billion, year-on-year reduction in total sales in US foodservice and drinking establishment channels as restrictions set in.

And with sales in full-service restaurants and bars not likely to return to 2019 levels until after 2021, the Q2 report, titled ‘COVID -19 and the US premium wine market Part 1’, highlights that wine producers selling into the US market would need to find new ways of engaging consumers in the future.

Rabobank senior wine analyst, Hayden Higgins, said total sales for US food service and drinking establishments for the first four months of 2020 were down an estimated USD68 billion, or 22 per cent.

“For wine sales, the percentage drop in the on-premise channel will be even higher, given these are more heavily reliant on full-service bars and restaurants, which performed even more poorly than limited-service restaurants,” he said.

Higgins said the US on-premise wine sales channel was comparatively small in volume terms, but important for access and margins.

“The on-premise channel typically accounts for less than 20 per cent of annual wine sales in the United States, but it’s extremely important, particularly for small, premium wine brands which sell a greater proportion of their product into restaurants and bars,” he said.

Australian wine export figures reflected the premiumisation trend for wine in the US, and Australia’s efforts to capture more of this market.

While exports of Australian wine to the US for the year ended March 2020 were down 11 per cent by volume, they were only two per cent lower by FOB value in AUD terms – suggesting product was directed at the premium market.

And despite the drop in total Australian wine export volumes to the US, Higgins said Wine Australia reported that the average price per litre rose to the highest levels since August 2009.

The report said, barring a vaccine, the on-premise US wine sale channel would likely take years to recover.

“Between government enforcement of social distancing measures, consumer reluctance to return on premise due to fears of contagion, and reduced business and tourism travel, many bars and restaurants may be forced to permanently shut their doors unless a vaccine is made available sooner than most experts expect,” Higgins said.

“Given these, and other, challenges, it’s anticipated the US foodservice industry will likely not return to 2019 levels until after 2021, and that the recovery would be led by limited-service restaurants and take-out/delivery, where there is less consumption of premium wines.”

He said larger wholesalers who had a greater proportion of sales in the off-premise, as well as more financial muscle, should be better placed to withstand these challenges.

Higgins said the US alcoholic beverage market’s three-tier system was particularly challenging for smaller wine brands.

“The US alcoholic beverage market operates under a three-tier system made up of manufacturers in the first tier, a second tier comprised of importers, distributors or wholesalers who purchase the product from the manufacturer, and a third tier of retailers,” he said.

“Under this system, producers are unable to sell directly to US consumers. It’s therefore essential brands work closely with their US distributors – who are in regular dialogue with retailers – so they can better understand changes in the way US consumers are purchasing wine.”

Implications for Australian winemakers
With the on-premise channel in the US struggling, Higgins said Australian wine brands would need to consider how their distributors were currently working with retailers, and also planning for future channel changes in the way consumers purchase wines.

For Australian producers vying for share in the US market, he said, digital strategies will become increasingly critical for sales success.

“While the on-premise sales are currently facing monumental challenges, the growth in e-commerce has been well-documented, and will provide an important opportunity for wineries seeking alternative growth strategies – both in the US, Australia and other markets,” Higgins said.

“We’re already seeing this process well underway in Australia, as wineries try to offset the decline in tasting room sales with e-commerce.

“Beverage companies are finding new, innovative ways to connect with consumers wherever they are, in a digital environment and to help drive sales across channels.”

For Australian wine exporters, Mr Higgins said, considering how e-commerce at the retail level and connecting to the US consumer would evolve – and how distribution partners were preparing for this – should be a core component of discussions, and were relevant conversations for other markets beyond the US.

“These questions include how they think about e-commerce within the organisation, whether they should buy or build an e-commerce team and where it should sit within the organisation.”

Higgins said Tsingtao, the Chinese beer company, provided one recent example of a beverages company that has used e-commerce to increase sales.

“Tsingtao used lockdown measures in China as an opportunity to further create a network of ‘community distributors’ – essentially social media influencers working on commission – that has been extremely successful by a number of measures,” he said.

Australian wine industry in challenging times

The value of Australia’s wine industry is rising each year, but producers will need to embrace new marketing and sales strategies to overcome slowdown in consumption in key markets, particularly the US and China, according to Rabobank’s latest global Wine Quarterly report.

While a recent boom in wine values to China has helped stabilise the impact of falling US consumption for Australian wine producers, the latest Q1 report reveals issues with declining consumption will be exacerbated by ongoing trade disruptions stemming from the COVID-19 coronavirus which is wreaking havoc in Australia’s largest wine market – China.

Rabobank senior wine industry analyst Hayden Higgins expects the global wine industry will continue to face significant uncertainty regarding international wine trade throughout 2020.

He said the first half of this year would be especially challenging for Australian wine exporters, reflecting the impact of the coronavirus in Australia’s largest market.

The Q1 report notes that while Australian bulk wine exports declined by 12 per cent last year in volume, they rose three per cent in value, and bottled wine exports declined five per cent in volume but increased seven per cent in value. Wine priced above AUD 20 per litre increased in value by close to 30 per cent (year-on-year).

And despite a 17 per cent decline in volume to China, sales increased in value by 12 per cent, with Australia now the largest wine exporter to China by value, and, in turn, China is the largest market for Australian wine by value.

The report found trade tensions between the US and China, Brexit negotiations and trade agreement negotiations all had an impact on wine sales and export volumes during 2019, which will continue in 2020, it said.

“A major element affecting the global wine industry in recent months has been stagnant domestic demand in the United States, but now we are also seeing a shut-down in China due to the COVID-19 outbreak which is adding to the slowdown in Chinese wine imports experienced in 2019,” Higgins said.

“The coronavirus outbreak is not only affecting actual consumption and trade flows of all goods, including wine, at the moment, but its economic consequences may undermine demand for wine even after the disease subsides.”

The Q1 report found US tariffs on selected EU wines were only in effect for the final two
months of 2019, yet may affect the entire year in 2020.

“All these factors may destabilise a market that is already reflecting the impact of ample
inventories and slow trade,” Higgins said.

He said while there were concerns about the impact that persisting drought may have in
the forthcoming southern hemisphere harvests, the abundance of global stock (in
particular of red wines) and uncertainties about demand were keeping prices “in check”.

The report found it was now imperative the industry quickly finds a way to boost
consumption in other key markets and broaden its appeal to attract new consumers.
It said the traditional focal point of most wine marketing – wine scores, tasting rooms,
vineyard soil quality, etc. – seem to be less relevant for the younger generation and it was
becoming clear that wineries need to re- think marketing strategies to reach the emerging
consumer.

“With sales growth slowing, the industry will need to take bold action to find new ways to
engage the market and connect with an evolving consumer,” the report said.
“This will require investments to build out e-commerce capabilities and improve brandbuilding skills to help reach a consumer that engages brands differently.”

WCA offers mentoring program

Wine Communicators of Australia (WCA) and the Adelaide Business School at the University of Adelaide are set to launch a national wine industry mentor program to boost the career trajectory of the next generation of wine communicators. The program will benefit people who will take a leading role promoting Australia’s wine industry in their public relations, marketing and communications careers.

The Wine Industry Mentor Program pairs ambitious wine industry professionals with respected industry leaders for a period of six months. One-on-one sessions will give mentees the opportunity to tap into experiences and insights from the best experts in their fields. The program aims to boost both the personal and professional development of early career wine communicators by giving them access to a wealth of knowledge from respected wine sector leaders; greater career clarity, direction and satisfaction; networking opportunities with like-minded, ambitious young wine communicators and advice with career progression.

READ MORE: Export grant helps South Australian wines go global

The inaugural six-month program has attracted notable names to act as mentors from across the country setting a high standard for the program launch. Mentors include:

  • Toni Carlino, Marketing Manager, Fogarty Wine Group and WCA Board Chair
  • Marni Cook, Consultant and WCA Board Member
  • Alex Gibbs, CEO, Smile Marketing and WCA Board Member
  • Gill Gordon-Smith, Co-ordinator Wine & Spirit School TAFE SA, Winemaker/Owner Fall from Grace
  • Bill Hardy, Consultant, Accolade Wines
  • Clive Hartley, Course Director, Sydney Wine Academy
  • Rob Hirst, Chairman, House of Fine Wines and Tucker Seabrook and WCA Board Member
  • Huon Hooke, Co-owner, Contributor, Chief Wine Reviewer, The Real Review
  • Patrick Iland, Director, Patrick Illand Wine Promotions
  • Ali Lockwood, Manager Stakeholder Engagement, Wine Australia and WCA Board Member
  • Anthony Love, Freelance wine writer, presenter, consultant
  • Jenny Port, Wine Journalist
  • Kathleen Quealy, Owner, Quealy Wine Makers
  • Nick Ryan, Wine Writer, Speaker, Wine Judge, Nick Ryan Wines
  • Katie Spain, Journalist, Wine Writer and Author

Communications leaders and strengthening the Australian wine sector, a cause of strategic importance to the WCA and the Adelaide Business School.

“WCA are proud to launch this program in conjunction with The University of Adelaide. WCA is committed to supporting and helping to grow future leading wine communications, by learning from and connecting with experienced wine professionals. We believe the relationships that will be forged will be extended past the six month program, fostering greater collaboration and connections across generations of the Australian wine sector,” said WCA executive officer, Lynda Schenk.

The University of Adelaide’s Professor Noel Lindsay, Dean of the Adelaide Business School, and Pro Vice-Chancellor (Entrepreneurship) says: “The wine industry is of enormous importance to the South Australian, and Australian economy.
“The University of Adelaide and the Adelaide Business School are committed to playing a part in ensuring the industry flourishes.

“The Wine Industry Mentor Program will help the next generation of wine communicators achieve their career goals by exposing them to some of the best communications minds in the industry.

“Partnerships such as this, between the Adelaide Business School and Wine Communicators Australia, will strengthen the wine industry, ensure its growth and its future sustainability.

“I’m very pleased to see this partnership deliver such an important support mechanism for the next generation of wine industry leaders.”

Applications to be mentees in the Wine Industry Mentor Program, which are open until 30 August 2019, are welcome from Australian residents. Applicants are expected to be in the early stages of their careers in the wine industry. Eligibility criteria are available on the WCA website. The program will be launched at the University of Adelaide in September and the program commences on 1 October.

The partnership with Wine Communicators Australia is another example of how the University of Adelaide is addressing its industry engagement priority in agrifood and wine.

South Australia invests $3 million in wine tourism

The South Australian government has launched a $3 million wine tourism campaign designed to attract international visitors to the state’s wine regions and boost the industry.

At Coriole Vineyards in McLaren Vale today, SA premier Steven Marshall, Minister for Primary Industries and Regional Development Tim Whetstone and Minister for Trade, Tourism and Investment David Ridgway announced the beginning of the “International Visitation Campaigns” in the Barossa, Clare Valley, Limestone Coast, Adelaide Hills, the Riverland and McLaren Vale.

The state Government has committed $750,000 towards the initiative with funding contributions also from Wine Australia, through the Commonwealth Government’s $50 million Export and Regional Wine Support Package, local government, wine associations and communities.

Premier Marshall said the campaigns are a key pillar in attracting more visitation to South Australia’s wine regions and cellar doors.

“Today’s launch of the International Visitation Campaigns across six wine regions will build on the fantastic work this government is already doing to attract visitors to South Australia,” said Marshall.

“Our world-famous wine regions are an important part of the state’s economy and this campaign will allow them to continue to grow and create jobs for the state.”

Whetstone said the visitation campaigns are a collaborative effort to attract international visitors to South Australia’s wine regions, with a focus on China and the United States.

“Almost 40 per cent of international tourists visit a winery during their stay in South Australia and visitor expenditure supports growth in our regions,” said Whetstone.

“South Australia’s number one wine export destination is China and Hong Kong, with $813 million worth of wine exported in 2017-18, which shows where we can continue to add value to any activities targeted to these consumers.

“Six wine regions across South Australia are utilising the campaign in a number of innovative ways to attract international visitors, including a sommelier exchange, multi-lingual website, wine trail, virtual reality and online marketing.

“Our wine regions are continuing to be innovative and adapt to changing consumer needs targeting consumers looking for premium products.”

In the McLaren Vale, wine exports exceeded $100 million for the first time last year and McLaren Vale Grape Wine and Tourism Association General Manager Jennifer Lynch said a targeted consumer marketing campaign will continue to build on that momentum.

“This investment and support will generate a notable step-change in our region’s continued international growth in key wine and tourism export markets, and we look forward to welcoming more visitors to enjoy what we have to offer in McLaren Vale,” said Lynch.

Grape growers battle heat ahead of vintage

Vineyard managers across South Australia are preparing for scorching conditions in a bid to protect what is already looking like below average yields in some of Australia’s most celebrated regions.

A dry winter and a cool spring has delayed vintage by up to two weeks in many parts of South Australia but this is being seen as a blessing by some growers who are hoping the worst of the hot weather passes before grapes enter the crucial final stages of ripening.

Growers in the state’s largest grape growing region, the Riverland, are expected to start picking grapes for sparkling wine next week followed by white and red grapes. The remainder of the state’s 18 regions are likely to harvest from mid-February through to the end of April.

The Riverland sweltered through four days in a row where the maximum temperature exceeded 41 C last week and faces an even hotter forecast this week. The temperature in Renmark is expected to reach 42 C today and Wednesday before hitting 46C Thursday and 43 C Friday.

Riverland Wine executive chair Chris Byrne said the general consensus among growers was that the vines were in “remarkably good” condition given the circumstances but it was too early to predict what yields or quality would be like.

“We’re in the fortunate position of having 100 per cent water this year and we’ve also had years and years of experience managing vines through hot weather, which gives us an advantage over other regions,” Byrne said.

“If we have a lot more of this sustained heat then we can be reasonably confident that there will be some sort of impact on yield or quality but it remains to be seen.

“Fingers crossed this week is the last period of prolonged heat – if we could just have a long slow cooler period through February, March and April that would be wonderful but we might also be dreaming.”

Barossa Valley Wine & Grape Association viticultural development officer Nicki Robins said a dry winter and spring frosts had resulted in fewer bunches, which would lead to reduced yields and a later harvest this year.

“There’s just not as many bunches so I’m pretty confident yields will be below the 10-year average,” she said.

“Normally we start picking whites after the (Australia Day) long weekend on about January 27 but it will be early to mid-Feb before we are picking whites and I think it will be the end of February this year when we start picking the Shiraz so it’s at least a couple of weeks later than in recent history.

“On the positive side, we haven’t had any significant rainfall events to cause us any problems with downy or powdery mildew – it’s very hot, dry and disease free at the moment.”

The slightly higher elevation of fellow inland wine region Clare Valley has delivered slightly cooler summer nights to help vines recover from the hot days.

Clare Valley Wine & Grape Association board member Andrew Pike said good canopy management and the “judicious” use of the region’s precious water supplies were the keys for local growers wanting to nurse their vines through the hot weather.

He said despite the dry winter, an “uneventful” spring allowed good fruit set across the board to set up a solid vintage in the region best known for its Riesling.

“If the weather does the right thing by us over the next month then I’m pretty confident we’ll end up with an average vintage if not a bit better in terms of yield but you never know – you can’t count it until it’s in the bin,” Pike said.

“But if we did happen to get another week or two of hot weather then that would start to have an impact,” Pike said.

Regions south of Adelaide, where it is forecast to be 45C on Thursday, also experienced a drier than average winter and spring and are also running about two weeks behind. But they have so far avoided prolonged periods of extreme heat this summer.

Leading McLaren Vale viticulturist and chair of the McLaren Vale Irrigators Council Jock Harvey said although bunch numbers were similar to last year, reduced berry size meant yields would be about 20 per cent lower than 2018.

He said the weather pattern of a dry winter, cool spring and a hot dry summer was similar to 2006/07, which resulted in a light crop of outstanding quality.

“We’re now mid-way through veraison and we’re very hopeful,” Harvey said.

“The crops are down, the berries are smaller but there are indications that it is going to be a good year.

“The vines have recovered from last week’s heat but we’re looking at Thursday’s (44C) forecast with a degree of trepidation.”

Neighbouring region Langhorne Creek is generally a few degrees cooler than McLaren Vale courtesy of cool breezes from the Southern Ocean and Lake Alexandrina. Access to River Murray water is also of great benefit to Langhorne Creek growers in hot and dry years.

Langhorne Creek Grape & Wine chair and Lake Breeze winemaker Greg Follett said growers were hoping for “nice even weather” heading into vintage.

“Most people are quite happy and we’re looking at about average yields – some things are down a little and some things are up – so perhaps we’re a little more fortunate than some of the other regions,” he said.

“We haven’t had any prolonged heat at all so far but everyone’s a little bit nervous with the forecast so they’re smashing the water on to make sure everything is hydrated and crossing their fingers.

Rainfall in parts of the cool climate region of Adelaide Hills was to 200mm below average last year and coupled with a cold spring, have led to predictions of reduced yields and a slightly later than usual harvest.

Adelaide Hills Wine Region Grape and Environment Committee Co-ordinator Richard Hamilton said cold weather during spring flowering had caused a condition called “hen and chicken” in a number of vines where a high proportion of small, coloured and unfertilised “chicken” berries formed on a bunch, affecting yield.

He said the two-week delay in the season compared with the 10-year average could be a blessing as it increased the chances of cooler conditions around harvest time.

“Cool nights are critical to developing really good flavours and given that this season has turned out to be a bit later is hopefully going to allow us to get back into a cooler ripening period than if we did ripen in mid summer,” Hamilton said.

“There’s not much that growers can do at the moment apart from make sure that they’ve got some overnight watering happening and they’re not doing anything to manipulate canopies to potentially expose soft fruit to the heat and sunlight.

“We don’t have a lot of water to use for irrigation so the pressure is on … we’ll cross our fingers that it’s not too bad.”

The South East region of Coonawarra is probably fairing best of all the major South Australian regions and is looking forward to some warmer weather following a third successive year of above average winter rainfall.

Coonawarra Vignerons President Pete Balnaves said a mild season has the grape crop about a week to 10 days behind the longer-term average with grape picking not expected to begin until late February and continuing through to the end of April.

“It’s a strange thing to say when you look across the state but we haven’t seen much hot weather this year so it’s nice to see the vines harden up a bit,” he said.

“Yield is looking very similar to last year when you look across all of the varieties and grape quality so far is looking good.

“If we keep getting those warm and dry conditions then I wouldn’t mind betting that week to 10 days behind will disappear and we’ll be basically back to a normal timing.

“We don’t want to see extremes – we’d just like to see a moderate climate going through to harvest and not a great deal of rain.”

App designed to protect wine industry against biosecurity threat

Peninsula Vignerons Association (MVPA) and Agriculture Victoria has announced that they will use the Snap Send Solve platform to locate amenity vines in the Mornington Peninsula, in an effort to help protect the region’s valuable wine industry from biosecurity threats.

A threat is phylloxera, an insect that can devastate a commercial grapevine and is transferable between vines. This transfer occurs not only amongst commercial vines but just as easily from Amenity vines – vines generally located in households or public places for decorative purposes. One of the difficult elements of surveying these Amenity vines is discovering their location.

“We are thrilled to be an integral part of Agriculture Victoria’s ‘Tackling Phylloxera’ campaign,” said Danny Gorog, founder and CEO of Snap Send Solve. “With more than half a million people in Australia already using the platform to report a range of issues within their community, we believe this is a natural channel for the general community to locate and report Amenity vines within the Mornington Peninsula area.”

Snap Send Solve allows anyone that discovers an Amenity vine, typically the hardest to locate, to report the location directly to Agriculture Victoria so they can undertake an inspection.

The app uses GPS to discover the precise location of the reporter and is geo-fenced, so that users can only report Amenity vines in the areas that the Agriculture Victoria is looking to survey.

 

Survey seeks to identify best practice in direct-to-consumer wine sales

Wine companies are being encouraged to participate in Wine Australia’s inaugural Cellar door and direct-to-consumer survey to help develop best practice customer engagement.

Wine Australia chief executive officer Andreas Clark said that, in 2017, the small winemaker production and sales survey found that direct-to-consumer sales channels accounted for 43 per cent of total sales revenue for Australia’s 2000+ small winemakers, with cellar door the strongest growing channel.

“Wine businesses were found to be making significant investments in tourism-related offerings and developing a range of alternatives to traditional cellar door tastings,” said Clark.

However, there was very little in-depth information available on direct-to-consumer total sales, cellar door visits, conversion rates, wine club retention rates and other benchmark statistics that helped wineries develop strategies and assess their performance in these profitable and growing channels, he said.

READ: Twenty Five Doors helps small wineries build market share

“This survey delivers on an initiative of Wine Industry Suppliers Australia (WISA) and will be used to develop a series of key benchmarks and statistics to assist wineries in the development of best practice wine tourism,” he said.

“It’s important for producers to benchmark themselves to improve overall performance, make informed business decisions and manage factors that affect consumers’ demand, loyalty and preference for their wine brand. This survey will provide meaningful and actionable insights for wine producers throughout Australia and will be an essential tool when building long-term sales strategies,” said Clark.

WISA executive officer Matt Moate said the research was imperative to define the capability gaps in Australian direct-to-consumer wine sales.

“The supply sector will be able to utilise this data to deliver opportunities to accelerate producers’ knowledge and skills resulting in a new level of competitiveness in this space,” said Moate.

The survey incorporates and expands on Wine Australia’s annual small winemaker production and sales survey and respected social research company Harrison Research will undertake the inaugural 2018 survey on behalf of Wine Australia.

Wine companies will receive a link to the survey in mid-August.

The survey will be anonymous, with the information presented in a report that will be published using aggregated, de-identified data.

The report will be released at WISA’s inaugural wine industry impact conference in Adelaide on the 18th of October.

Funding flows in for Western Australia’s wine regions

Western Australia’s wine regions are receiving funding from the Australian government.

A $2-million marketing campaign to boost international visits to Western Australia’s wine regions received support from the Australian Government’s $50 million Export and Regional Wine Support Package, a network of WA Government and sector partners.

Wines of WA has secured $1 million in funding through the International Wine Tourism State Grants program and $1m in matching state funds, through a consortium of state government agencies and tourism, agricultural and regional bodies.

Wine Australia chief executive officer, Andreas Clark, said the Wines of WA application was approved by the Australian Government following assessment by an independent expert assessment panel.

READ: Four of the five largest markets for Australian wine exports have grown in value

“The $5m state grants program aims to maximise the wine sector’s impact on state economies – it’s about driving collaborative, strategic wine tourism initiatives that attract international visitors to our wine regions,” said Clark.

Wines of WA was working with the Western Australian Department of Primary Industries and Regional Development, Tourism WA and their counterparts in the wine, trade and agriculture sectors to cross promote WA’s wine, food and tourism destinations and experiences, he said.

Wines of WA collaborative wine tourism strategy aligns with the existing Western Australian Wine Industry Strategic Plan 2014–2024, which aims to double wine exports to $100m by 2021.

Wines of WA chief executive officer, Larry Jorgensen, said the investment plan was built around four key areas – in-region and inter-region collaboration with key sector partners, wine tourism product development, a comprehensive suite of digital marketing tools and partnerships with tourism operators and agencies.

“The aim is to build on the strong brand of regional hotspots like Margaret River and create new wine tourism experiences in other regions to extend tourists’ spend and length of stay in WA”, said Jorgensen.

The $5 million International Wine Tourism State Grants program requires applicants to provide matching funding on a dollar-for-dollar basis.

Victoria’s wine industry gets a $2 million boost from the government

Victoria’s wine industry has received a $2 million boost from the government through the third round of the wine growth fund.

Member for Buninyong, Geoff Howard, represented minister for agriculture and regional development, Jaala Pulford, on the 30th of July, to announce the extra funding and expanded guidelines for the fund.

Howard said the wine industry contributed more than $7.6 billion to the economy.

“[It] employs more than 13,000 people in grape growing, wine making, cellar door sales and hospitality operations – that’s why we’re investing in its future.”

READ: Four of the five largest markets for Australian wine exports have grown in value

The fund aims to develop and sustainably grow the wine industry in Victoria by providing innovative growers, organisations and projects with money to build both domestic and international markets.

It supports activities including marketing, exporting, tourism and business development.

Funding guidelines have been altered so infrastructure projects that attract significant investment and create new jobs are eligible for grants of up to $100,000.

The first two rounds of the fund supported 106 projects worth nearly $2 million in Victoria.

These projects have created new jobs in the wine industry, generated an increase in visitation to Victoria’s wineries, and increased sales and exports of Victorian wines.

Pulford said the government was proud to announce a third round of this program.

“Victorian winemakers produce beautiful wines for every occasion, taste and price and we’re supporting them on the world stage and closer to home.”

Applications are open to businesses or organisations from all wine regions in Victoria directly involved in the wine industry, including the growing, making and marketing of wine.

Four of the five largest markets for Australian wine exports have grown in value

Four of the largest markets for Australian wine exports grew in value and volume in the 2017/18 financial year.

At $2.8 billion, the value of Australian wine exports has seen the largest growth in 15 years. This is a 20 per cent growth.

But, of the five largest markets, the only one not to grow in value and volume was the US market.

Wine Australia CEO Andreas Clark said the strong growth in the value and volume of Australian wine exports is very welcome, but the challenges and opportunities for the sector were very clear.

READ: Wine Australia to invest $67.8m in ambitious agenda for coming year

“USA is the world’s largest wine market and Australia has the opportunity to capture more of the premium end of the market as American consumers trade up to higher priced wines,” said Clark.

Australia had been strong in the commercial half of the US market, as 54 per cent of the US off-trade volume was wines under US$8 per bottle, but this market was shrinking, he said.

American consumers are transitioning from commercial wines to more premium wines.

“The premium end of the USA wine market is enjoying robust growth, as are Australian exports in nearly all price points above $10 per litre. We’re working to accelerate this growth in demand through a marketing push supported by the Australian government’s $50 million export and regional wine support package,” said Clark.

An inaugural Australia Decanted event was launched at the end of July, at Lake Tahoe, California.

“This four-day wine education program is immersing 100 key influencers, from the USA in Australia’s diverse and thriving wine scene, to raise awareness of the breadth of Australia’s fine wine offering and the perception of the Australian wine category in the USA,” said Clark.

“Australia Decanted will become Wine Australia’s signature annual event in the USA and will be followed by Aussie Wine Week, in September this year, and Aussie Wine Month in September 2019,” he said.

Despite challenges in the US market, there was an increase in the average value of bottled
exports shared by 69 of the 127 destinations for Australian wine, with demand for premium
Australian wine in Northeast Asia being the biggest contributor to value and volume growth.

The growth in exports was driven by a 15 per cent increase in active exporters compared to the previous 12 months, with 2298 exporters shipping 23,761 unique products. Of these exporters, 1616 either started exporting or grew the value of their exports, contributing $653 million to the growth in overall export value.