Australia's bid for fine wine dominance

04 April, 2014

Australia will go on to dominate all tiers of the UK wine market for years after surging ahead of rivals and muscling into fine wine, according to a leading supplier.

The nation cemented its place as the UK’s top supplier by growing 4% in value to £1.1 billion (Nielsen, year to February 1).

It also held volume sales at 1.6 million hl, while its three nearest rivals – Italy, the US and France – all suffered declines.

Australia is also upsetting the Old World order by carving out a significant chunk of the fine wine market, according to Treasury Wine Estates boss Dan Townsend.

He told OLN: “Chile, South Africa and Argentina have come on but Australia still accounts for one in every five bottles in the UK, which is phenomenally exciting.

“There are two markets in the UK. One: mainstream grocers, chains and the impulse sector. Two: the fine wine merchants. We are winning on both fronts. “In the past quarter Wolf

Blass is up 31% in volume and Lindemans 22% (Nielsen, three months to March 1).

“Wolf Blass is one of only two top dozen brands that has an average unit price of more than £6. Lindemans is well

above average too. Our fine wine business has become an area of particular focus and we set up a team to look after it, largely behind Penfolds, which is leading the way in fine wine.

“The grocers are always going to be relevant because of their scale, but fine wine merchants looks a very interesting area.

“Bordeaux and Burgundy will always be at the heart of fine

wine but the impact Penfolds is having shows us the appetite is there among investors and collectors for New World fine wine.”

Townsend believes future growth will come from increased thirst for Australian fine wine, grocers pushing the £6-£8 category and convenience store owners broadening their ranges.

He said: “Sub-£5 will fade because it’s difficult to make the numbers work, but £6-£8 is exciting moving forwards. The £8-plus category is getting exciting, off a much smaller base.

“The challenge is capturing attention to get consumers to try different products rather than defaulting to the gondola end.

“It’s great to see retailers trying different things to make wine accessible.”

He added: “One of the challenges in the convenience sector is to encourage a broader spread of brands and price points.

“It’s easy to default to the biggest brands and fill shelves with £5 offers. They have three or four Australian Chardonnays and Californian rosés all at exactly the same price point.

“The biggest single thing that can help increase value in the convenience arena is offering a broader, balanced range. It might not be more wines, just a different spread.”




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