Australian wine increases lead over its rivals

09 October, 2014

Australia continues to pull away from its closest rivals as the UK’s favourite wine producer after value sales grew 2% to £1.1 billion (Nielsen, year to July 19).

Volume sales were flat but its three closest rivals – Italy, the US and France – all suffered volume declines and second- placed Italy dropped 5% in value to £800 million.

To maintain the growth, the trade must work hard to push the Australian category in a more premium direction, according to one supplier.

Simon Thorpe, managing director of Australian specialist supplier Negociants, told OLN: “Australia has a much lower percentage of sales above £10 and that’s definitely an opportunity. We believe there is the offering, the quality and the character to be able to fulfil that.

“We need to premiumise offerings within the multiple off-trade. That’s where Australia is more pigeonholed than anywhere else – that mainstream commercial tier. We have to break out of that and get to the sweet spot and go to where Australia makes great wines.

“I think there is an understanding among multiple buyers that there is a lot of duplication in Australian ranges in the multiples, so there is an

opportunity to put in some more esoteric wines.

“It’s a challenge to ensure both trade and consumer have the chance to appreciate that variety and quality and that we tell the stories about them. It’s the only way Australia can be sustainable. It’s gradual, but a constantly improving picture.”

Thorpe also believes there is demand from retailers for iconic Australian wines

over £20, particularly among independents, but the industry needs to convince more affluent shoppers of the quality by highlighting, for example, that Tasmanian Pinot is a strong alternative to Burgundy.

But he said the trade does not need to axe the good value, entry-level wines Australia built its reputation on in the UK.

“You can have these new, premium wines and not sacrifice what is already there, those good value wines,” he said. “They can coexist. You don’t have to shed the perception of good value and quality from brands. People buy a lot of Barolo, but they also buy a lot of Pinot Grigio.”

He also feels that the Australian wine industry is united in its desire to drive value into the category.

“It needs more journalists writing about it, more people working in Majestic stores talking about it, but there is a definite will among the wine industry to do that,” he said. “Wine Australia campaigns are designed to do that. There is a good group of producers and distributors here that are coming to the same way of thinking.

“The think tanks that Yvonne May brought together at Wine Australia are a big part of that. There’s a big opportunity and we are all thinking in the same way. It’s not going in different directions.”

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