The changing face of the Australian market

That’s the word from Wine Business Solutions principal Peter McAtamey, in the recently released Wine On-Premise Australia 2017.

The report shows that after a period of rapid change and experimentation, the Australian On-Premise wine market is starting to stabilize. And in NSW in particular, sales are increasing as the state’s economy booms. In comparing each Australian state, Wine Business Solutions (WBS) has drawn on data from almost 160,000 wine listings from nine consecutive annual Wine On-Premise Australia reports.

While there is some good news for New Zealand, there are also some concerning trends that producers here need to take on board.

Firstly the good news. Overall, New Zealand wines on Australian wine lists increased 4 percent in the past 12 months.

But the bad news is, the two years previously, 2014 – 2016, our wines on Australian wine lists dropped 38 percent. That is despite the fact that in that same two-year time frame, imported wines increased their share of listings from 25 percent to 37 percent. (This year imports have dropped back to 34 percent of total listings nationally).

So why the changes, you might wonder. McAtamey says there are a number of reasons. Firstly, the change in food styles. He cites the influence of programmes such as Master Chef, which has highlighted a move by chefs away from heavy, over powered dishes, to more textural, fresh and clean ones, which has been matched by a radical change in wine lists to match the food.

Secondly, the influence of sommeliers.

“The real change, perhaps the biggest ever seen in this market, is the sommelier led realization that it is wine with great texture, structure, complexity and expression of their terroir that works best with food.”

In terms of red wines, McAtamey says this change has led people to look to Europe.

“The white wine offer has, however, been no less affected by this rapid change in the level of sophistication of both Australian restaurants and their consumers.”

As sophistication grows in the On-Premise, it means wines that are readily available in supermarkets are often not being considered. Sommeliers are instead looking for a point of difference. He says restaurant owners are seeking out lesser known regions in an effort to ensure they have an “exotic” list.

The other aspect that is perhaps often overlooked, is how the consumer themselves have changed. McAtamey says; “The centre of gravity’ of the market has moved up and away from the Aspirational consumer that New Zealand sold so successfully to 10 years ago.”

All in all, it means New Zealand producers may need to look carefully at what styles of wine they produce and how they ensure they gain traction with consumers. Overtly fruity Sauvignon Blanc, which has stood us in good stead for the past 10 years, may not be the way of the future. The drop in wine listings between 2014 and 2016, can be directly related to a drop in listings of New Zealand Sauvignon Blanc. While for years it was the most listed wine style in the Australian On-Premise, the rise of Chardonnay has been threatening its status for the past two years. Having said that, the love affair with Marlborough Sauvignon Blanc is by no means over. In terms of share of total listings of wine regions on Australian wine lists, Marlborough is in fourth place, with 5.3 percent of all listings an increase of 6 percent over 2016, and sitting behind only Margeret River, Adelaide Hills and Barossa Valley. (Central Otago is in 25th place, with 0.8 percent of listings, down 5 percent on the previous year).

In terms of working towards the changing market, New Zealand producers are already moving along that path. More textural, oak aged Sauvignon Blanc is being produced, but there is a need to get these wines into the On-Premise and in front of consumers.

“Opportunities for trialing wines in the Off-Premise are now extremely limited. (On-Premise) is one of the only true ‘brand building’ opportunities outside of cellar door, regional and national events that many wines will ever experience.”

McAtamey also says, people buy what they try and On-Premise is a chance for New Zealand wine to be seen and consumed in the best possible surroundings. It is also a chance for brands and regions to be remembered, recommended and bought again, later.

The other way is for producers to take part in events such as Bottle Concepts Rootstock, Pinot Palooza and Game of Rhones. McAtamey says these events allow creative producers to have access to “opinion leaders en masse”.

Again this is already happening and he says it is the edgier producers out of Waipara, Nelson and Canterbury that are leading the way.

“They have been highly effective at leveraging the buzz around these events to build trade following. They are at the forefront of revitalizing interest in the New Zealand wine category.”

It is not only Sauvignon Blanc that McAtamey referred to in his report. He also pointed out that in terms of Shiraz – the growth of wine listings devoted to this variety has grown 25 percent in the past 12 months, which could be great news for Hawke’s Bay.

“Elegant cool climate Shiraz is the fastest growing style in the Australian market and is what Hawke’s Bay can perhaps do better than anyone.”