Premium wines make inroads into US market

Premium wines make inroads into US market

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UPWARDS: Wine Australia CEO, Andreas Clark, addresses the 17th Australia Wine Industry Technical Conference in Adelaide recently.

UPWARDS: Wine Australia CEO, Andreas Clark, addresses the 17th Australia Wine Industry Technical Conference in Adelaide recently.

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Australian wine exports to the US have returned to growth.

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AUSTRALIAN wine exports to the United States have returned to growth after more than a decade of declines.

Exports to the US in the past 12 months increased by 2 per cent to $432 million ($US304m) with increases in value across most major price segments.

This is good news for an already buoyant Australian wine industry, which is enjoying unprecedented success in Asia on the back of record exports to China where it has this year overtaken France as the number one imported wine category in mainland China by value.

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Figures released yesterday by Wine Australia show the value of global Australian wine exports grew by 4pc in the 12 months to June 2019 to $2.86 billion.

More than half of this value comes from exports from SA, the country's biggest wine producer. South Australian exports accounted for $1.79b of the value.

Wine Australia chief executive officer Andreas Clark released the latest Export Report recently at the 17th Australian Wine Industry Technical Conference in Adelaide.

Mr Clark said the fortunes of Australian wine in the US appeared to be slowly turning around after year on year declines since peaking in value in 2007.

He said the US will be the target of a major Wine Australia marketing campaign in September and October, which aims to fuel a new era of growth.

"To recover the loss in value it's critical that more exporters re-enter the market," Mr Clark said.

"We cannot rely on one or two brands to turn the needle in the premium segment in the US but we firmly believe the US presents a great opportunity, albeit a challenging one."

The increase in value of wine exports to the US was tempered by a 4pc fall in volume for the year to 152m litres. Commercial unpackaged, or bulk wine, accounted for 45pc of exports to the US and declined by 3pc in volume but increased in value by 5pc.

The average value of Australian wine exported to the US rose by 6pc to $2.83/L.

This was significantly lower than the $3.58/L Australian wine exports average globally and less than half of the $6.64/L average price of Australian wine headed to China.

But it is the premium bottled wine segments where the Australian wine industry is pushing to make ground in the US and raise its average price per litre.

Australian wine priced between US$8 and $15 per bottle retail has grown by 29pc and wines above US$25 a bottle have grown 10pc in the past year, albeit off relatively low bases.

The state of SA produces about half of Australia's wine and 80pc of its premium wine.

Mr Clark said discussions with US distributors and retailers last year confirmed Wine Australia's belief that there is a significant opportunity in the premium wine market in the US for Australian wine across key varieties such as Shiraz, Chardonnay and Cabernet Sauvignon.

"We are hitting the US in a big way this year with our $8 million Far From Ordinary campaign. This is our single largest marketing campaign ever," he said.

"To my mind it is absolutely critical that we turn the US around for the long-term viability of the sector.

"It will take long-term investment and it won't happen overnight."

About 63pc of Australia's total wine production is sold overseas by 2729 active exporters.

The United Kingdom is Australia's largest market by volume (235mL) on the back of a high proportion of bulk shipments but it sits third behind China ($US840 million) and the US for value.

Canada is Australia's fourth highest wine market by volume and value. Exports to Canada fell 4pc by volume to 65mL and 0.4pc by price to $198m ($US139m) in the year ending June 30.

  • This article was originally published on The Lead.
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