The offering of Australian wine has never been stronger or more diverse,” according to Louisa Rose, head of winemaking at Yalumba and Hill-Smith Family Vineyards. “Wines are available both domestically and internationally from a range of regions, producers and varieties. This means there are wines at all price points and styles available.” 

And Rose is not alone in feeling confident about the country’s current offering. Wine Australia’s UK, Ireland & mainland Europe director Yvonne May also says that Australia has never been in better shape. 

May reports that the average value of total exports increased by 0.4% to AUS$2.61 per litre, helped by a 3% increase in the average value of bottled exports to A$4.54 per litre, the highest average for bottled exports since the global financial crisis hit in 2008.

But in the year ended September 2013, the volume of wine exports declined by 3% to 684 million litres, valued at A$1.78 billion. The volume decline was in red wine (down 9% to 394 million litres) but white wine was up 5% to 276 million litres.

Both bottled and bulk wine exports declined during the year. Bottled wine exports declined at the fastest rate, down 6% to 305 million litres, while bulk shipments declined by 2% to 371 million litres. Bulk wine now accounts for a 54% share of all wine exported from Australia, up one percentage point on the previous year.

May is bullish. “We have some of the best selling wines in the world, which is a triumph for a nation that only produces 4% of the world’s wine – but we are also keen to encourage trade and consumers alike to increasingly turn to Australia for their fine wines.

“If we want to raise the game for Australia and start to increase our profit margins while enjoying better recognition and international credibility for our top-end wines – and all the £8-plus wines that lie in between – we need to create buzz around readily understood quality cues. Regionality (see panel above right) is the obvious one and deserves sustained messaging. It is, to quote Robert Joseph: ‘The grammar of fine wine.’ And key gatekeepers for this sector, such as the independent merchants and sommeliers, look to it. It’s where we can tell a powerful story,” says May.

Accolade Wines claims to be Australia’s largest wine company with a 12% market share, and its Hardys brand is the number one Australian wine brand 

Paul Schaafsma, Accolade’s general manager for UK, Ireland and America, Middle East & Sub-Continental Africa, tells Drinks International: “The outlook is very positive and we believe Australia is still driving the category.”

To that end Accolade has just embarked on a major advertising campaign for Hardys in the key UK market.

Schaafsma continues: “Australian wine is synonymous with red wines in consumers’ minds. Shiraz is the key wine associated with Australia. Overall Australian wines are expected to have a fresh, fruity flavour, well balanced and reliable – expected to taste good.”

While Hardys is doing well in the UK, Schaafsma admits that the US is “a challenge”. He puts it down to a number of factors. The decline of the Yellow Tail, brand which had been so huge in the US, the rise in popularity of Italian Pinot Grigio and the strength of the Australian dollar against the Greenback have all contributed.

He says that, after a tough few years, the Nordic countries are “pulling back – Denmark is very strong” and a “joint business plan” with multiple retailer Tesco in its Asian markets – China, South Korea, Thailand and Malaysia – bodes well for the company. Accolade has also opened an office in Prague to look at central and eastern European markets.

Australian Vintage’s general manager, UK and Europe, Julian Dyer says: “Australian wine continues to be a relevant and powerful international presence, and in the UK we have successfully maintained our number one status by a clear margin. As a category we have also recently had unparalleled show success, with Australian winemakers winning International Winemaker of the Year at the IWSC every year for the past four years – McGuigan won three of them – and also winning both red (Wolf Blass) and white (McGuigan) winemakers of the Year at this year’s IWC.

“This points to a purple patch, and demonstrates that Australia continues to lead the world in terms of quality, style, regionality and authenticity,” he says.

“Stylistically, Australia has subtly modernised its ‘house style’, moving more towards elegance and refreshment without losing Australian typicity. Neil McGuigan, chief winemaker of McGuigan Wines, talks consistently about ‘flavour and lightness’ in his wine, “a happy marriage of Australian depth of fruit with balanced acidity, tannin and oak,” he says.

“Many of Australia’s best wines remain regional blends – the bedrock upon which was built the Australian wine industry. Regionality (and terroir) is important, but not at the expense of quality. I think Australia is finding a happy medium, recognising the great single vineyard/region wines, but also celebrating the consistency and quality that regional blends can bring, from both irrigated and dry-grown regions,” says Dyer.

Dan Townsend, Treasury Wine Estates’ general manager UK, Ireland & western Europe, also points to Australia’s success in wine competitions. He says: “If you look at Australia’s quality credentials it has cleaned up at the major global wine awards this year. 

“If you look at TWE both in UK and globally our brands are very much central to this. Wolf Blass, for example won the red winemaker award at the IWC and the big IWSC title as well as three trophies. Penfolds Grange 2008 was this year awarded two 100-point scores in the Wine Advocate and Wine Spectator,” he says

“And if you want to understand how Australian brands are viewed across the world, look at the recent opening of the Penfolds Boutique store in Sydney Airport duty free. There we are talking about a premium shop dedicated to an Australian wine brand, facing shoppers from across the world,” adds Townsend.

Strong and diverse

Yalumba’s Rose says more consumers are becoming aware of the quality offering coming out of Australia: “The negative stereotyping of our wine continues in parts outside Australia and when thinking consumers wake up they will understand what they have been missing.”

Dan Parrot is Laithwaite’s buyer for Australia. Laithwaite’s is part of Direct Wines, which is based in the UK and has operations in the US, Hong Kong, Australia and mainland Europe. He says: “There’s no doubting the high Australian dollar has made life tough for Australian wine, especially in the UK where customers are spoilt for choice of wines from around the world. 

“Having said that, our business identified the need to locate the Australian wine buyer on the ground in Australia. By having our buyer living in Australia we’re able to sniff out great value parcels of wine and jump on them quickly, often before other businesses are even aware of them. This capability helps us to counteract some of the current exchange rate challenges.”

Tony Allen, category purchasing manager, wine, for Matthew Clark – the leading supplier of wine to the UK on-trade sector – is also concerned about the effects of the strength of the Australian dollar. He says: “The major challenges to the Australian wine sector must revolve around global market demands and their ability to profitably meet these demands while the Australian dollar is so strong.

“The historic success of Australian wine brands at entry-level created a blueprint for other countries to emulate, but without Australia’s high labour costs or limited water supply, among other constraints. The strong dollar has therefore left the door open for competitor countries to establish firm footholds in certain markets,” he says.

“If Australia can fight to maintain its market share while the dollar is strong, perhaps opportunities will come naturally when the dollar weakens. Opportunity and profitability will then depend on whether or not it decides to ‘buy’ its way back into the market. Much smaller and possibly longer-term opportunities could be via premium wines or exciting grape varieties,” says Allen.

Fiona Findlay, sales and marketing manager for Voyager Estate in Margaret River, Western Australia, says: “The opportunity remains one of telling the regionality story more effectively and exposing more consumers to the premium products available. We need to connect.

“China is an important market, but it is like any other market – if you want to build a brand through on-premise and fine wine retail distribution it takes time, resources and a lot of effort, particularly as there is an enormous education process required as drinking wine is not a ‘normal’ part of the Chinese culture, says Findlay. 

Fresh and relevant

In summary, Dyer says: “Keep Brand Australia fresh and relevant. I love the work Wine Australia is doing with Tourism Australia, bringing together food and wine. The work we do at McGuigan with (TV chef) John Torode demonstrates to me how compelling this message is.

“We must establish greater credibility in the on trade. We have the quality and the wines to do this. We must not take our eye off the quality ball, particularly at entry point. We are not manufacturing a beverage to a price point – we are making wine experiences for a willing audience. We’re never going to compete with Spanish table wine.

“We must continue to innovate, but do so off a base of quality, authenticity, provenance and history. The Australian wine industry was launched by some great wine people, real characters, and we must retain that contact and that story. We are not corporate,” Dyer concludes.