Australian wine makers are pulling out of a slump and catering to a growing export and domestic market.
In 2015, the annual Winemakers' Federation of Australia Vintage Report painted a grim outlook for many winemakers, showing 85 per cent of Australian wine growers were failing to make money or so much as break even. But fast forward two years and Australia’s wine is being poured at more tables across a wider range of locations.
The 2007 Global Financial Crisis (GFC) hit the world’s wine industry hard, prompting a widespread glut.
But Peter Bailey, head of Wine Australia’s market insights team says the last few years have been good news for Aussie winemakers.
“There were a whole lot of factors between 2007 and 2013, which made it pretty tough for Australia; high exchange rates, a global oversupply, oversupply in Australia and a lot of retail consolidation,” Bailey says. “Things are starting to turn around post-GFC. There are a lot of really positive factors that point to a pretty good outlook for the industry.”
Exports on the up
One of those factors is selling ever larger volumes overseas. Australian wine exports are growing strongly, particularly to China. Wine Australia figures show the value of Australian wine exports rose by 13 per cent to $2.44 billion in the 12 months to September 2017. And the average value of exports grew by four per cent to $3.06 per litre – the highest level since 2009.
Blended in with those increasing numbers is a $50 million Federal Government initiative announced last year to boost the Australian wine industry.
The Export and Regional Wine Support package aims to pop the cork on the industry by showcasing home-grown wine and backing exports. According to the government, the program will be delivered in four streams: “international marketing campaigns, Wine Export Grants, capability development workshops, and state-based and competitive grants.”
Australian-made shiraz and chardonnay have proved to be the most popular with overseas buyers. Shiraz exports grew by 17 per cent to $574 million and chardonnay increased by 10 per cent to $181 million. Winery owners have tapped into the lucrative premium market at home and overseas, predominantly China and the US.
Bailey says China’s appetite for Australian wines leans toward the red varieties, but whites – particularly reisling – are also trending upwards.
He says Australian winemakers are marketing their product as premium, and that’s resulted in a “higher price point”, and growth in exports.
Taste the difference
There’s also been an upsurge in Australians looking for domestic wines made using non-traditional grape varieties and methods. Tom Hollings co-founded Different Drop in 2013 to bring more innovative artisan producers to a growing market of adventurous and sustainability-minded wine enthusiasts.
“Our business has grown rapidly over that time, with both supply and demand for these hand-crafted wines increasing at an incredible rate,” Hollings says, “The shape of the industry is changing like never before.”
He sees a significant push towards wines made more sustainably, through sensible, organic viticulture and a minimalist approach to winemaking.
“The modern Australian winemaker cares about the land he or she farms and wants their wines to tell the story of where they came from,” Hollings says. “These wines are crafted with passion by hand, not made from a recipe in a lab.”
Another factor driving local interest is the growth of domestic wine tourism.
More than half of regular wine drinkers in Australia have visited a winery or cellar door in the past year, research by Wine Australia found.
The nation’s wine hotspots are the Hunter and Barossa valleys, while the Yarra Valley, Margaret River and Tasmanian regions are also attracting large numbers of repeat visitors.
Hollings believes that the Australian wine industry is the most dynamic in the world.
“There has never been such quality and diversity in our industry,” he says “Our customers buy wines from hundreds of boutique producers across the country, made from almost 100 different grape varieties. Gone are the days where everybody only drank shiraz and sauvignon blanc.”