The 2013 figures from Wine Australia are pretty bleak. Export volumes were down to four of the five biggest foreign markets and the value of sales is down in all five. American and Chinese buyers are moving upmarket, which is good news. But the Brits, who are by far the largest buyers (50% more than the US), are buying less and cheaper wine.
(Volume/value in $A/value per liter, change from 2012)
UK: -6.7% -8% -1.6%
US: -10.8% -3% 9.3
Canada: 6.6% -5% -15.3%
China: -12.6% -8% 10.5%
Germany: -12.6% -12% 1.0
What’s going on? Is this a change in tastes or something economic. Sure, the Australian dollar has been strong, but it’s not like the euro helps Europeans compete on price.
I think collectively, yes, the tastes of many Americans has changed. Knowledge is power and the rise of the internet age re:wine in the last ten years including wine boards such as this one have people talking.
Now, at retail we still sell a TON of Yellow Tail. What has changed is I don’t see the interest the 95-point Parker-rated Barossa Shiraz @$40 that seemed to be in vogue say 2000-2005. There seems to be a soft middle (price-wise) and almost no high-end traction.
Wow - very interesting. I was surprised to see the UK as the largest market. Surely the massive marketing push in the mid 2000’s can’t be replicated, so some downside is expected, but it seems to be a steady decline year upon year
I think the high Australian dollar did a lot more to damage the wine sector than any perceived change in taste. The dollar is falling now against the pound, the euro, and the US dollar, but it’s still high by historical standards. Saw Penfolds 707 for $199 a bottle! That’s what Grange used to go for a few years ago. I just don’t see a lot of Australian wine moving at that price.
Taste however, if anything, has grown worse. Yellow Tail and critter wines have been replaced in the US by Jam Jar and Apothic!
People are reacting in Australia though, and if the dollar weakens further, I think we’ll see many more wine styles than Americans at least were used to.
Another thing that’s kind of interesting is while Penfolds keeps their pricing high, Gallo has dropped the price of their imports. You can pick up Clarendon Hills for $24, which is about half of what you used to pay. That’s really puzzling given the economics, but it seems to suggest that a lot of the price was a premium for ratings.
We keep having this discussion on WB about what are the great and interesting Aussie wines that aren’t Mollydooker style, but the answer is usually that those are (a) rare or impossible to find in the US, and (b) if they are available, they’re really expensive and hard to justify as an exploratory purchase considering the wines you could buy at that price.
Some of that is driven by the unfavorable exchange rate, but it mostly feels as though terroir-driven Aussie wine just hasn’t ever gotten a foothold in the US. And you can’t just say “it’s because Americans all eat McDonalds and Coke and they don’t appreciate wines that don’t taste like milkshakes,” since all kinds of AWFE darlings are imported to the US from places like Burgundy, Piedmont, Champagne, Loire, Bordeaux, Rioja, etc.
Agreed. I was looking for a Yarra Valley Pinot Noir to put in a tasting and couldn’t find anything in NY. We had a few awhile back but $20-$30 in that category was a pretty tough sell.
John, interesting, I didn’t realise the extent of this but I’m not surprised.
I think the major factor is consumer preferences and market perceptions changing.
There is a good contrast with NZ wine exports. Like the Aus dollar the NZD has been rising in recent years.
The UK market is very important to Australia and NZ wine. Australia some years ago surpassed France in volume sold in the UK. NZ’s strategy has been a bit different, focussing more at the quality end of the market, achieving the highest average price per bottle of wine sold in the UK.
Between 2009 and 2013 NZ wine exports have increased 22% (there are no 2014 figures yet). There has been some recent UK backlash against NZ sauvignon blanc, the NZD has continued to rise and there are plenty of struggling NZ wineries, but overall the NZ industry seems better placed than the Australian one for modern preferences. I don’t think their industry adapted very well to changing preferences while facing a higher dollar.
Interesting observations about the NZ strategy, Howard.
I realize now that my statement above about UK being more important than the US isn’t entirely true. The UK represented 35% of exports by volume vs. 26% for the US, but by A$ value, the US accounted for 25% of exports while the UK was only 21%. I guess that means that to more upmarket producers, the US is more important, but for producers of cheaper wine the UK is hugely important. The average value per liter of exports to the US is A$2.55 vs. A$1.54 to the UK.
Yes - what I was saying was I recall getting over 3 dollars to the pound, but it fell to ~ 1.4 to the pound. Yours is the right terminology.
I hadn’t checked in a while - 1.8 currently, so an improvement, but still a ~+75% movement from when they were dominant in the market. £12 becomes £21 etc. What were bargains are often these days a little pricey.
The marketing has definitely lost it’s edge and indeed although some of the Landmark tastings get column/blog inches, the rest of us wine lovers are left wondering whether those extravagant events are the reason the public tasting events have dried up.
I would add that terroir-driven Australian wine still tastes like Australian wine first and foremost, And few of them will ever be AFWE darlings. Even though Margaret River Shiraz is often desperately (IMO) compared to the North Rhone, the reality is that they are closer to Barossa in flavor than Cote-Rotie or Crozes-Hermitage. I do like a good Western Shiraz more than a comparably-priced Barossa, but this comparisons remind me of how we talk about certain California Pinots. The Anderson Valley may be less jammy, but the wines are still closer to the RRV than to Burgundy.
So what about things like the Hunter Valley where you’re getting 12-13% alcohol and are absolutely nothing like the Barossa? They might feel New World but they’ll share far more in common with Northern Rhone in texture and flavors than they would the Barossa…
Personally I’ve never seen Western Australian Shiraz compared to Northern Rhone…
Not saying some of the styles out of the Barossa will ever be confused with anything else…and it shouldn’t be…but your comparison is just poor and likely limited by what you see in the US. I know people know Australia is a large country but comparing some of these regions would be like comparing the East and West Coasts of the US…it just starts making no sense after awhile…
That said however, there is some truth to the idea of an “Australian” aesthetic. We get McLaren Vale, Barossa, etc, and we know they’re different but the wines often taste similar - ripe and juicy. But part of the reason is that the Australian export machine wasn’t just a bunch of individual producers working independently, it was a coordinated effort, planned and executed well. The outliers didn’t fit in and in fact, there was little reason to be an outlier. The domestic market was small and money was to be made by selling the foreign markets what they seemed to like.
Same thing in NZ by the way - there’s a NZ Sauvignon Blanc box. Line up a dozen or more SBs and taste them all blind. They do other grapes but who’s buying Pinot Blanc from NZ?
The thing is, as you point out, Australia is a large place. Moreover, the winemakers are smart. They’ll figure it out. I don’t know why we would need to compare a Shiraz from Australia to a Syrah from Cote Rotie. How many people in Cote Rotie are producing Mourvedre? Or Touriga Nacional? In Australia they are and they’re doing it well and if they want to, they can blend those and people won’t get their noses bent out of joint.
Oh I don’t doubt that the style of wine that a lot of them went to, they all went to in droves…or at least a lot of them did. Comparing places that are actually similar (McLaren Vale and the Barossa) is one thing though…comparing them when they’re nothing like each other seems a bit silly…But I still think, even by your comments, you don’t realize there are a lot of “outliers”…There are a lot of very ripe Shiraz out of Australia…and there are a lot that are not…there are many that do not export at all or don’t export significantly…part of it is they didn’t have the style that was popular at the time…and now that they do have a style that might be more popular, no one wants to give them a chance because they think, as many Americans do, all AU wines are big fruit bombs…
I mean honestly, how many out there have had a Hunter Valley Shiraz? And what did you think? The 12-13% alcohol, Medium bodied, acid driven, red fruit, earth, leather and some funk…There are some that are a bit more full bodied…and certainly they tried to make 15%+ alcohol Shiraz (and pretty much failed)… line this up with Shiraz from the Barossa and it’ll be very different…Or take the many different regions of Victoria…a bit less funk and earth than the Hunter but definitely a contrast to the Barossa…
As you said, there isn’t even a reason to compare regions…but when people make rather silly comments about AU, all it shows is ignorance. Probably not something people want to hear but let’s face it, what makes it to the US is not everything or even close to everything made in different markets and I’m not talking the really oddball stuff…Some stuff does just not make it there…
That’s not quite true. The climates of Australia are much more similar, east to west, than those in the US because of (among other things) the lack of a big N-S mountain range in the middle of it.
You can see the differences in climate pretty clearly when you visit. One of the first things that struck me in Adelaide was the signs of the blistering summers: old houses with thick, thick walls. They looked like adobe buidlings you’d see in the American Southwest. New South Wales is more temperate and green.
I didn’t visit Victoria, but the stats show it’s cooler.