Home' National Liquor News : NLN FEB 2018 Contents 104 | FEBRUARY 2018 NATIONAL LIQUOR NEWS
WHAT WERE THE MAJOR AREAS OF
FOCUS IN 2017?
Wine Australia has three key roles: global
marketing and insights; funding research
and development (R&D) and supporting the
adoption of the findings to support practice
change; and helping Australian wine exporters
Wine Australia doesn’t grow grapes, make
wine or sell wine. That is the role of our
grapegrowers and winemakers and they do
that exceptionally well. We focus on providing
the information and services to grape and wine
businesses to help them succeed.
We’re funded by grapegrowers, winemakers
and exporters through levies, and by the
Australian Government for RD&E activities. Our
ongoing engagement with the grape and wine
community is vital to ensure we are meeting their
needs and delivering value for them.
In 2017, we outlined the next three years of
activities under the Australian Government’s
$50 million Export and Regional Wine Support
Package. This is an additional and most
welcome opportunity to support growth for
our sector through growing export demand
for wines and encouraging more international
visitors to visit our wine regions.
WHAT WERE SOME OF THE
OVERALL HIGHLIGHTS IN 2017?
In 2017, we continued to see strong market
signals. Vintage 2017 saw the third consecutive
rise in both the crush (to 1.98 million tonnes)
and the average purchase price ($565 per
tonne), which was the highest price since 2008.
In our export markets, value increased
overall by 15 per cent to $2.56 billion (the
highest growth rate since 2004), volume was up
by eight per cent to 811 million litres and there
was a seven per cent increase in the average
value per litre free on board to $3.16, the
highest since 2009.
These results are credit to the hard work of
exporters in-market, who cultivate successful
relationships to grow their businesses, and the
growers and winemakers who are producing
wines that reflect our unique regionality and
speak to the trade and consumers.
Wine Australia issued 56,238 export
permits for the sector in 2017, which is
seven per cent more than 2016 and reflects
the growth of demand that we’re seeing for
Australian wine overseas.
WHAT DO YOU THINK WILL BE THE
BIG TRENDS IN WINE IN 2018?
Mainland China is now Australia’s largest
export market worth $848 million and it grew
by a remarkable 63 per cent in value in 2017.
Australia is outpacing our key competitors in
market growth and we need to ensure we can
continue to sustain supply and grow demand.
Red wine dominates Australia’s exports to
mainland China, it accounted for 95 per cent of
the export value in 2017 and growth is strong.
However, an important trend is the increasing
acceptance of white wine, principally due to an
increased number of younger Chinese people
drinking wine who are more open to trying
new styles. It is an exciting opportunity for
WHAT BIGGEST CHALLENGES ARE
FACING THE WINE INDUSTRY?
The under indexing of Australian wine in the
USA is our biggest challenge. The USA wine
market is the largest in the world – valued at
US$44 billion and growing at 2.7 per cent per
annum – and we need to work as a community
to unlock growth opportunities for Australia.
The China wine market is also not without its
challenges; we need to fuel and support sustained
growth in the market in a multi-pronged
approach through areas such as education and
cultivating relationships with buyers.
We also need to support growth in the
premium end of our wine exports to the UK.
In 2017, there was solid growth in our exports
priced at $7.50–9.99 per litre (£11–12.99
per bottle retail) up by three per cent to $13
million. The UK is still our largest market by
volume, but we need to find opportunities to
grow our premium priced wines.
Within Australia itself, our market is
relatively strong and our customers are loyal
to locally produced wines. We have the
opportunity to maintain our strong market
share domestically by providing compelling
wines at each price point.
WHAT KEY POINTS SHOULD THE
WINE INDUSTRY BE DISCUSSING?
It is vitally important that the wine community
continues to work hard to capture and grow
markets. Australia currently exports 60 per
cent of the wine we produce and we need to
maintain our focus on growing and servicing
our export opportunities.
Through the $50m package, the government
is providing support for companies through
the $1m Wine Export Grants and $2m
capability development workshops, which
are designed to help small- and medium-sized
businesses leverage overall international
marketing activities. Complementing these
grants are the $5m of state-based and $5m of
competitive international wine tourism grants,
which will see the expansion of our wine
tourism offering nationally.
WHAT IS ONE ISSUE THAT YOU
WOULD LIKE TO SEE URGENTLY
ADDRESSED BY THE INDUSTRY?
The biggest opportunity and the biggest
challenge we face as a whole wine community
is the USA market. It is the fastest growing and
most valuable wine market and Australia needs
to capture more of the growth in the USA.
There are positive signs of change. Australian
exports at $10 per litre or more (roughly
US$14 or more per bottle retail) increased by
eight per cent to $45 million, and this growth
in premium exports is also evident in retail
figures. Off-trade sales figures from IRI show
at US$11 or more per bottle, Australian sales
grew by 32 per cent while the total sales in this
segment increased by seven per cent.
This is supported by a renewed interest
from wine influencers and the wine trade in
the fine wines Australia has to offer. At our
Taste of Australia event in New York last year
Joe Czerwinski, the Managing Editor of Wine
Advocate, said “People should drink Australian
wine because it’s probably not what they think
it is. There’s this whole new wave of producers
and a whole new wave of wine styles.”
It is a market with huge opportunities for
Australian wine across all price points and
we need to continue to work together to find,
create and capture new openings.
ANDREAS CLARK, CHIEF EXECUTIVE OFFICER
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