Neil Breen is joined by Ben Malouf to talk food and wine with John Quinn. July 15th 2016
Wine Australia has released its latest Export Report, which shows the value of Australian wine exports has continued to experience strong growth over the past 12 months.
From July 2015 to the end of June 2016, the value of Australian wine exports grew by 11 per cent. The growth was driven by bottled exports, particularly at higher price points. Bottled exports grew by 15 per cent to $1.7 billion and the average value of bottled exports increased by 9 per cent to $5.35 per litre, the highest since October 2003.
Wine Australia CEO Andreas Clark said: “Pleasingly, demand for Australian fine wine has continued to grow, particularly in North America and Asia.
“Our finest wines contributed to almost half of the total value growth in the last 12 months, with exports priced at $10 free on board (FOB) and over per litre up 26 per cent to a record $499 million.
“This increased demand for Australia’s finest wines was reflected in all of our top five export markets.
“Exports priced $10 FOB and over to the United States grew by 16 per cent, mainland China by 71 per cent, the United Kingdom by 15 per cent, Canada by 12 per cent, and Hong Kong by five per cent.
“This growth contributed an additional $102 million to the value of Australia’s wine exports.”
Earlier this year, TheShout reported that the Chinese wine market, which incorporates both China and Hong Kong, is now a bigger market that the US for Australian wine.
Wine Australia general manager of marketing, Stuart Barclay, told TheShout that the 66 per cent growth in the Chinese market represented both volume and value sales.
“The Chinese market is still very strong, and when you combine this with the Hong Kong market it is worth over $500 million. The growth is coming from across China at lots of different price points, including very strong growth for sales above $10," Barclay said in April.
“By comparison, the US market is one of our toughest markets. This used to be a $1 billion market and we are now doing around $440 million.”
The latest Export Report shows that the US wine market grew by eight per cent to $449 million in the 12 months to June 2016, while China grew by 50 per cent to $419 million. The Hong Wine market was up by 11 per cent to $124 million.
In total wine exports reached $2.11 billion, an increase of 11 per cent on the previous year. All export regions recorded growth in the last year, except for Europe, which declined by one per cent to $574 million. Northeast Asia continued to lead growth, with value increasing by $158 million (34 per cent) to $618 million. Next in absolute growth was North America, growing by $46 million (8 per cent) to $646 million. Growth slowed to Southeast Asia, up $7 million (5 per cent) to $142 million.
In the US the trend towards Australia’s premium wines continued with exports priced $10 and above per litre FOB increasing by 16 per cent, reflecting the improving perception of Australian wine among the US trade, with a growing number of importers taking on more premium Australian brands.
Clark added: “There is still much work to do in increasing the awareness and availability of premium Australian wine in the US. To continue sustainable growth in our most valuable market requires a long-term approach and a focus on re-establishing relationships and confidence in the category, supported by significant, consistent investment to drive the Australian fine wine message.”
Sydney independent retailer and former Penfolds executive John Quinn (right) has partnered with Lindt Australia CEO Steve Loane (left) to launch Iconic Winemakers, a new online platform to showcase Australia's best winemakers.
By Deborah Jackson, editor National Liquor News
The new platform operates as a champion for Australian wine with its focus on high quality over price.
Founder Quinn told TheShout: "What we're about is quality and not price. Many of our competitors are about sending out a mixed case every month filled with old labels or dormant stock - but the reason that people do that is because the wine didn't sell in the first place.
"We are all about quality. Really the definition of an iconic winemaker is someone who once worked for the big corporates and is now out doing their own thing. So this is all about quality wines that aren't easy to find. Anything that we do and any of our activity, is really about talking about the winemaker and educating people about the winemaker and different wine regions etc."
Quinn continues: “If you picture the great Max Schubert, who created Grange, leaving Penfolds to start Schubert’s Wines – that’s an Iconic Winemaker.
“Our talent has excelled with Lindeman’s, Penfolds, Hardy’s, Houghton’s, Orlando, Rosemount, Seppelt, Tyrrell’s - the list goes on. They have typically also advised in the ‘old world’ wine regions of France, Italy and Germany. So career-wise they are at the top of their game.”
Iconic Winemakers provides a platform for this elite group of Australian winemakers to share their own labels, along with their stories, with Australian wine consumers. The vision is that over time the site will grow to include wines created by the winemakers exclusive for Iconic Winemakers.
Referencing common discount-led online retailers led by major retailers, Quinn explained what Iconic Winemakers is not.
“Discounted wines, old label clearances or pushing mixed dozens to move dormant stock is not us. What makes Iconic Winemakers unique is that we’re driven by quality, not a price point,” he said.
“Our selection is not available in bottle shops or big retail chains. It is free to subscribe and there are no obligations or compulsory delivery cycles, so you don’t have a mixed case turning up on your doorstep every three months and an unwanted credit card charge.”
Loane sees similarities between the Iconic Winemakers premise and what made Lindt a giant in the FMCG space.
“When I came to Lindt 19 years ago, everyone was a milk chocolate person and we were told by major customers ‘Australians don’t want to pay that amount of money for chocolate, and dark chocolate is never going to be a main player in the market place’, ” he said.
We now have 15 per cent of the block market share with dark chocolate because the market has changed. Consumers are more educated and prefer just a few quality pieces of chocolate at night – less is more.
“The wine market is similar. Local consumers are more educated than ever about wine and don’t buy solely on price. This changing consumer will appreciate our proposition.”
Iconic Winemakers will introduce new selections regularly, with wines currently ranging from $20 to $75.
I was lucky enough to start my career in the wine industry back in the mid 1980’s. It was a great time where the industry had a certain romance about it and the joint was driven by marketing and winemaking. Today unfortunately the bus has a different driver. It is now driven by accountants and production departments answerable to the bean counters.
Last week saw the foreign owned Orlando (now known as Pernod Ricard) announce the closing of its ‘Morris of Rutherglen’ operations, a former stalwart brand of the Australian Industry. As one of our Iconic Winemakers, Andrew Thomas, tweeted “Another sad example of dickhead corporate accountants making decisions affecting the very fabric of our winemaking history.”
As I write the British vote to leave the EU is about 50:50; during the day it’s been as wide as 55:45 in favour of leaving. Whilst most commentators have concentrated on the financial markets and how they will effect Australia I’m more interested on how the wine industry will be implicated. My gut feel is it could open opportunities. If European Countries take umbrage with the UK then a few more doors may open for Australian wine in the mother Country.
Travelling the world as one of Australia’s top sportsmen obviously has its advantages; playing a sport you love, getting paid well to do likewise and seeing the world as you travel. Former Aussie cricketer Glenn McGrath and current Wallabies skipper Stephen Moore have both opened up about one of their off field passions during their travels. Both have revealed their appreciation for South African wines, in particular from the Stellenbosch region.
Let’s hope Pigeon and Squeak’s love affair with African wines is only a brief flirtation and they realise, via Iconic Winemakers, that the world’s best wines are right here in their own back yard.
Malcolm Turnbull has given $50 million to Wine Australia and below is how Wine Business Magazine’s editor sees it being spent.
We spent $8m on a feasibility study to work out how to spend the remaining $42m. We spent $3m on a risk analysis, leaving $39m. A consultant charged $6m to tell us what to do with the $33m we had left and he came down from the hill to shoot the wounded after the battle was over. A lawyer robbed us of $2m, which left $31m. We upsized the core competencies for our paradigm shift and invested $3m in a millennial generational expert, a coffee cake authority and two barnyard masturbators. We got buy-in, drilled down and ran it up the flagpole. We spent $1m on a business coach and had a team-building day in Nimbin to build trust and we held hands and sang Koombaya. That left $25m. Having all this marketing money and no marketers, we paid a UK recruitment firm $6m to conduct an exhaustive global search for a $3m marketer and the successful applicant worked three cubicles down from the Wine Australia CEO in Kent Town. That left $18m. We spent $2m on an integrity unit and $3m on a financial advisor who referred us to the integrity unit, leaving $13m. The Riverland always cracks the shits about being left out, so we shut them up with $3m to turn the Big Orange into the Big Grape, leaving $10m. We gave $7m to Wolf Blass for a bloody-fuggen world tour to repeat the best PR trick ever – paging himself at international airports. “Would Mr. Wolf Blass of Aussie wine – the greatest wine in the world – please come to the Emirates counter?” That left $3m, which was spent on a Senate Inquiry into how we blew $50 million with nothing to show for it. – Ed