Off-trade reports premium domestic wine sales up 8%

After a long period of flat sales, Wine Australia reports a positive outlook for the domestic wine sales.

Approximately 40% of Australia wine is sold locally, with sales in the domestic off-trade market growing by 1.3% in volume and 4.2% in value in the 12 months to July 2, 2017, according to figures from IRI Market Edge Liquor.

This equates to an additional 460,000 cases of Australian wine being sold in the past financial year.

The growth reflects data from the International Wine and Spirit Record (IWSR), which shows that per capita wine consumption in Australia increased to 29.6 litres per annum in 2016, after five years in decline. The IWSR has also forecast that wine sales will continue to grow by 1.4% per annum over the next five years.

Volume of imported wine declines

The volume of imported wine declined by 10% or nearly 9 million litres over the past 12 months and is at its lowest level since 2010–11 (source: ABS). Value also declined by 6%.

That trend is set to continue, with Rabobank’s Agribusiness Monthly reporting that France and Italy have experienced their worst harvest in decades following the “Lucifer” heatwave last month, while Spain's production is also likely to contract. 

The three countries account for 60% of world production. Meanwhile South America and South Africa are also struggling with poor seasons. As a result, Rabobank estimates global wine inventories could finish this year as much as 12% below last year.

"Amid a tightening market, Australia is in the enviable position of having an increase in production this year," the report notes.

Higher prices for Aussie wine

Wine Australia also notes a trend towards drinking higher priced wines. Australian wine sales at below $10 per bottle (off-trade) declined by 1%, while sales above this price increased by 8% in the 12 months ending July 2, 2017, according to the most recent IRI Market Edge Liquor figures.

The top drop was Shiraz, where 80% of volume growth was at $10 per bottle and above, compared with Sauvignon Blanc, where 85% growth was wines below $10 per bottle.

Rosé' has a big future

Wine Intelligence has identified a number of wine consumer trends in its most recent Australian Wine Market Landscape report. The report forecasts that strong growth in the rosé category will continue.

See the diagram below: