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Premium wines drive Australian wine resurgence in North America

Primary Industries

SALES of premium wines from Down Under are heading north as American drinkers discover there is more to the Australian story than kangaroos peddling Yellow Tail.

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Australian wine exports to the United States increased 3 percent in 2016, to AU$458 million. This was led by premium wines as exports above AU$10 per liter FOB grew by 23 per cent, to AU$41 million and the number of individual wines retailing at more than US$12 per bottle increased by 59 percent.

It is a similar story in Canada, with exports of premium Australian wines (A$10 and above FOB) growing 9 per cent to C$26 million in 2016.

The Yellow Tail brand has dominated North American sales of Australian wine for more than a decade, and had a further push with a witty Super Bowl commercial this week, but the latest figures show the balance is shifting.

The Great Australian Wine Company is having remarkable success in the United States with the 14 brands it represents including Woodstock, Wicks Estate, Tomfoolery, Rymill and Koonara.

Owner Tony Gray has spent several months in North America every year since he started the company in 2013.

He said re-presenting the story of Australian wine in the US and getting away from the image of a country that produces cheap, bulk wine was paying dividends with distributors, retailers and customers alike. 

“What we’ve tried to do is change the focus of the Australian story,” Gray said.

“By introducing the new stories, showing the new products that we’re producing and the quality of them is starting to resonate again and it’s been fantastic.

“We’re not even playing in that sub $10 category, we’re really geared up to support the true winemakers and the part of the market from $15 to $45 a bottle in the US.

Gray said the distributor network in North America was a tightly held space and took a long time to break into.

He said while being of excellent quality in the traditional varieties of Cabernet Sauvignon and Chardonnay, Australian wines were also enjoying strong growth in the booming Rose, Grenache and Sparkling segments

“The Grenache revolution that seems to be happening at the moment is fantastic, the Rose market in the US is unbelievable and we have a whole Rose portfolio where we group all of them together and it gives customers massive options to choose from, which has been of great benefit to us.

“I effectively look for distributor networks and good retail opportunities that we can get these brands into and by doing that, open up the market for those labels.

“You have to be there – you can’t expect to roll up in the US once or twice a year – you have to work the products constantly.”

The Great Australian Wine Company sold about 15,000 cases in North America in 2016 and is aiming for 30,000 cases this year.

About 10 of its 14 brands are from South Australia, which consistently produces half of the nation’s wine. The state is home to world-renowned regions such as the Barossa Valley, McLaren Vale and Adelaide Hills and brands including Penfolds Grange, Jacob’s Creek, Hardys and Wolf Blass.

Gray has also established direct to customer sales through Amazon and his company’s own website.

He said while only about 5 per cent of his sales in North America were currently through online, building a strong consumer and retail digital database would be crucial to the company’s success.

“By really focusing on that digital environment we’re going to be able to get to a lot more people and make them think about Aussie wine again,” he said.

“That’s going to be the biggest part of my business in the next five years without question – I would say that in five years it will be over 60 per cent. “

Aaron Ridgway, Head of Market for Wine Australia Americas said there were significant signs of improvement for the Australian category in North America throughout 2016.

“To end the year up in value and with more options for US consumers to enjoy our premium wines puts our winemaking community on the front foot,” he said.

In 2016, the global value of Australian wine exports grew by 7 per cent to A$2.22 billion. This value growth was driven by bottled exports, particularly those at higher price points.

Bottled exports grew by 10 per cent to A$1.8 billion. The average value of bottled exports hit a calendar year record, up by 5 per cent to A$5.48 per liter FOB.

According to the Organisation of Vine and Wine, Australia was the world’s fifth largest wine-producing nation in 2016 behind Italy, France, Spain and the United States.

This is a Creative Commons story from The Lead South Australia, a news service providing stories about innovation in South Australia. Please feel free to use the story in any form of media. The story sources are linked in with the copy and all contacts are willing to talk further about the story.

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