Australian Wine – All the Eggs in One Basket

There is no question Australian wine is in a bit of a dilemma right now. Wine sales are slow and the style of wine that Australia pioneered, one that brought millions of new customers around the world to wine, is out of favour.

At one point in the not so distant past, Australia was the darling of the wine world. The ability to consistently produce ripe, rich and fruity wines was exactly what new consumers of wine were looking for. The golden days saw unprecedented growth in exports, massive vineyard planting and an almost precipitously steep growth curve.

Wine, a product that usually rides out downturns with little loss of business, took a beating with the economic downturn. Understandably, it was the higher end wines that went first, a situation you would think would have been good for value priced Australian wine but the tides had already turned and consumers were starting to drift away from the ripe, rich, fruity but overly simple mass market Australian wines. Things had started to change for Australia even prior to the economic shit-storm that shook consumer spending around the world.

Doing the job of a pioneer is never easy. The ability of Australian wine to give such consistent product to the world for so many years has pigeon-holed the country as a producer of value wine and nothing more. The fantastic history and diverse regional wines that exist have been forgotten amidst the colourful critter labels, mass marketing and a race to riches. A case of all the eggs in one basket?

Many of the top producers realized years ago what was happening, that double digit growth was not sustainable and that eventually this new brand of customers that had been brought up on Australian wine would need to trade up. But the momentum of the big brands is not an easy thing to slow down, let alone steer in a new direction. Hence Australia is where it is, in the doldrums of the wine world once again fighting to develop some kind of distinction.

The silver lining to this unsettling cloud could be the brutal force of Mother Nature herself. After being hit with years of drought, many of the heavily irrigated bulk wine vineyards that pump out the big brand wines seem to be looking less and less viable. It is estimated that Australia needs to remove something like 17% of the vineyard acreage in order to achieve balance in the market. It would be fitting for everyone if it was the low value, bulk wine vineyards that went first, shifting the focus back towards the higher quality regional wines. Better for the environment, better for the price of grapes and better for the quality of wine.

The ability to produce outstanding wine in Australia should not be questioned. There are many great regions with long history producing distinctive wines that are both interesting to drink and have the ability to develop complexity with maturation. Riesling from the Eden Valley & Clare Valley, Semillon from the Hunter Valley, Shiraz & Riesling from the Canberra District, Shiraz from Heathcote & other areas of central Victoria, Barossa and McLaren Vale and great Cabernet Sauvignon from Coonawarra and Margaret River are just a few. Most of these styles of wine have longevity in that they are not boring and not one dimensional. They are regionally diverse, great wines.

The challenge becomes marketing the wines to the world and convincing the powerful giant wine companies to redirect their efforts to where the future is pointing. But it is a different game marketing diversity of terroir versus mass brands. The future is in reducing the quantity but increasing quality and making wine that will once again get the world thinking about Australian terroir.

Rhys Pender

(See also a great article on www.jancisrobinson.com here)