Why You Will Be Drinking More Australian Wine…Again.
Anyone even tangentially involved in the wine business is familiar with the demise of the Australian wine market in the United States in the last decade. Just say the words “critter wine” and watch people shutter. Since then, the industry’s trade group, Wine Australia, has taken great strides to try to rebrand and revive the country’s wine image abroad. As highlighted in a recent article by Richard Jennings, it appears that Wine Australia’s efforts are beginning to bear fruit. What many people in the wine industry may not have noticed, however, is that over the last 3 months the last piece of the puzzle has fallen into place. Since mid-April, the Aussie Dollar has lost 14% in value as compared to the United States Dollar. Between the effective rebranding, the emergence of increasingly diverse and interesting product offerings, and decreasing Aussie Dollar, I get the feeling that United States Consumers will soon be singing the praises of Australian Wines…again.
Fast forward if you know the story, otherwise…
Sales of Australian wine fell off a cliff in 2008, dropping by over 20% in that one year alone, driven by a deadly combination of weakening consumer interest and a strengthening Australian dollar (as compared to the US$). It can be argued that Australian wines were at the vanguard of the heavily extracted, fruit bomb wines that were so popular in the United States the 1990’s. Since then, it appears that there has been a slow, but steady, shift away from that style, as consumers’ palates became more educated and experienced and wine drinkers were looking for something with more structure, character, and diversity. The incredibly effective marketing campaign that drove the Australian wine phenomenon turned on the brand and as consumers lumped all Australian wines into the over-extracted fruit bomb category. Couple that with a strengthening Aussie Dollar and the end result was rising prices (or lower profit margins) on a product that was once known for its strong value proposition and which was increasingly out of favor with the consumer.
As previously mentioned, Wine Australia has been working hard to develop and promote brands which demonstrate terroir and not just an Australian wine making formula. I recently had the opportunity to have dinner with a friend who works in the Australian wine business and he pulled the cork on several brands that I had not tried before. I was very impressed with a few labels, particularly the 2008 Jamsheed Silvan Syrah from Yarra Valley (yes, they even used the word “Syrah” on the label rather than “Shiraz”). While this clearly had some Australian Shiraz characteristics, there were also a Northern Rhone influence, with some meaty, earthy, characteristics and plenty of structure.
So, the marketing has started to take root and the wines are beginning to show promise. Now,with the value of the Aussie Dollar dropping significantly since mid-April, Australian wine producers will be able to compete not only on quality, but also on price. Keep your eyes out for some aggressive marketing and pricing campaigns in the near future!