Bowl them over with Aussie wine

By Robyn Black

- Last updated on GMT

Related tags Wine Chardonnay

Australian wines: untapped market in UK
Australian wines: untapped market in UK
The Australian wine category is faltering in the UK on-trade. Robyn Black says pubs should exploit what is a huge, and largely untapped, opportunity.

Australia may be one of the largest wine-producing countries in the world, but the category is faltering in the UK on-trade. Robyn Black says pubs should exploit what is a huge, and largely untapped, opportunity.

Just like its cricket team the Australian wine category has found itself under-performing in some areas, in this case the UK on-trade.

For many years now Aussie wines have been a favourite in UK homes and it is the number-one wine-producing country, having overtaken France some years ago.

However, this has never quite translated into the same share of on-trade sales, particularly in pubs where the consistency of quality, accessible wine styles and branding should make the wines a natural fit.

"Australia is the second biggest-selling wine country in the UK on-trade, but the category has under-performed in the past year," admits Henry John, marketing manager at ViVAS. "It has lost 13.5% of its volume and 16.6% of its value in the 12 months to July 2010," he points out.

The continuing strength of the Australian dollar is one issue, as it causes the cost of exports to rise.

"In the UK market, where price competition remains as important as ever, this puts significant price pressure on Australian producers," John says.

In addition, there is also increased competition from other wine-producing countries, with the likes of Italy, Spain, New Zealand and particularly Chile all performing well in comparison — and the continuing preference of the on-trade for Old World wines also remains an issue.

However, the category does have a lot to offer the great British pub and, moreover, the great British pub has a lot to offer it, so it remains a huge — and largely untapped — opportunity, which is crying out for exploitation by not just Aussie wine producers but licensees too.

"Pubs with a strong and appealing food offer are still a growth opportunity for Australia and wine in general," explains Neil Bruce, wine director for WaverleyTBS. "Australia can still compete pretty well at entry price points against the rest of the world and, at the more premium end, it has some varieties that really stand out in global terms, such as Clare Valley Riesling and just about anything from Margaret River in Western Australia."

Price sensitive

The category has other strengths for the pub trade as well, in terms of its pioneering approach to wine brands, an area in which it still excels.

"Consumers are increasingly price sensitive so not only are they limiting the amount they spend out of home but they are also more likely to question a higher price point for a bottle of wine," says Simon Brook, business sector controller on-trade, Treasury Wine Estates (formerly Foster's EMEA).

"However, we do know that consumers trust, and are prepared to buy, brands such as Wolf Blass and Rosemount when they are out.

"These wine brands also offer the opportunity for the on-trade operator to make more cash margin per bottle sold, so are a more tactical line to stock."

Producers such as Treasury Wine Estates have overcome the debate around the merits or otherwise of stocking off-trade brands in an on-trade environment by developing on-trade exclusive wines under its well-known brands, such as the Rosemount Signature range.

"Branded wine has a significant role to play in driving growth for Australia in the on-trade," says Lee James, channel director for wine at Pernod Ricard, which owns Australian giant Jacob's Creek.

"Indeed, 80% of customers surveyed said they would buy branded wine in a pub or a bar and 69% of pub customers said that it is 'important' or 'very important' for a pub to stock well-known brands of wine. As a result, there is an opportunity for pubs in particular to drive growth through brands," James says.

Marketing

It is also true that many of the big Australian brands — Jacob's Creek, Wolf Blass and Hardys — are some of the few to have invested heavily in marketing, including TV advertising and high-profile sponsorships, such as that of Wolf Blass and cricket or Hardys and Come Dine With Me.

"By supporting our Australian portfolio with high-profile integrated marketing campaigns such as the Hardys sponsorship of Come Dine With Me, Constellation aims to bring new consumers to wine, increase sales and ultimately add real value to the Australian category in the UK," says the company's Neil Anderson, European marketing controller, Australia and New Zealand portfolio.

"We have listened to consumer feedback to create bespoke brands designed with the on-trade consumer firmly in mind.

"Earlier this year we created Hardys Cellar Collection, an exclusive on-trade range, which makes good use of the front label to convey a brief taste descriptor, following research in which consumers said that was what they wanted — coupled with the reassurance of the Hardys name."

It would be a mistake to think that all Australia has to offer is big brands, however.

Smaller producers

More and more high-end smaller producers are emerging — the number of wineries has increased fourfold since 1990 to more than 2,400, according to The Australian and New Zealand Wine Industry Directory.

This is, in part, down to the country's geography, which means it can grow a wide variety of grapes and offer a wide variety of wine styles, a message it has been keen to push in recent years to avoid being pigeonholed as a producer of only jammy, bold reds and heady vanilla-soaked whites.

"With the dominance of New Zealand Sauvignon Blanc, Australian producers are looking to alternative floral varieties to interest the consumer," says Helen McGinn, director at Copestick Murray.

"Varieties such as Sémillon are getting a makeover as well as Pinot Grigio and Sauvignon Blanc."

Lily Hicks, brand manager for Australia at wine agency Enotria, agrees, pointing out that "in terms of wine styles many Australian producers are working hard to produce styles that are more suited to an on-trade environment.

"These wines include less oaky Chardonnays, which are leaner and fresher and much more appealing to the current trends of wine styles".

Or there are aromatic varietals such as Riesling, Viognier and Marsanne, which are growing in popularity with winemakers Down Under and UK drinkers alike. And in red wine more Tempranillo and Pinot Noir are being planted.

In part, this is also down to the growth in new grape-growing regions, such as Tasmania and Pemberton in the south-west.

In addition, over the years, more and more wines are being produced locally rather than grown, vinified and then shipped hundreds of miles and blended with wines from several other regions to make generic "Australian" wines.

"There is a big buzz around the Margaret River region in Western Australia for refreshing whites

and Bordeaux-style blends," Hicks adds. "And the Mornington Peninsula is an up-and-coming area for Pinot Noir."

In fact, there are 74 individual wine regions in Australia now, with many sub-regions under the more traditional areas, Copestick Murray's McGinn explains.

"The move to recognise these individual sub-regions has seen greater diversity and development of unique styles.

"For example, Adelaide Hills Sauvignon Blanc is being further identified as Piccadilly Valley Adelaide Hills Sauvignon Blanc on labels, to emphasise its locality."

For a list of the main Australian wine-producing regions, see left.

Diversity is something the generic promotional board, Wine Australia, has been trying to push for some years, but it seems yet more work is needed if UK licensees are to exploit Australian wines to their full potential.

Strewth, mate! 11 things you didn't know about Australian wine

1. Australia has some of the oldest vines in the world (many of Europe's established vineyards were destroyed by disease in the 1800s and the only surviving vines were those that had been shipped Down Under).

2. The first vineyards were planted in 1788 in a small area near Sydney Harbour Bridge.

3. Australia has the oldest Shiraz vineyards in th

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