Premium Australian wine exports up 70%

Premium Australian wine exports experienced massive growth in 2016-17 according to new figures from Wine Australia.

Export values of wines priced $30-$49 rose 70%, while wines priced $100-$199 rose 43% and wines priced over $200 rose 32%.

Earlier this month, Australian Grape and Wine Authority chairman Brian Walsh told The Adelaide Advertiser that Wine Australia’s 2015-2020 Strategic Plan was to challenge stereotypes of Australian wines being more lower-end, affordable drops.

“We see an opportunity there to actually get more of our better wines represented in retail at fine wine stores and in special occasion wines, but also as restaurant wines.

“We’re bringing down barriers and assumptions that Australia is a colonial outpost.”

Overall, the Wine Australia Export Report June 2017, shows that Australian wine export value increased by $201 million (10%) in 2016–17 to $2.31 billion, underpinned by strong export growth to China and the United States. 

Australia is the world’s fifth biggest exporter of wine – behind France, Italy, Spain and Chile. In 2016–17, Australia outperformed each of the four larger exporters in its rate of export growth.

Wine Australia Chief Executive Officer Andreas Clark said: "Pleasingly, nearly all price points experienced growth and there were benefits for exporters in all segments of the market.

"There were a record 1997 exporters last financial year and 69% contributed to the total increase in value shown."

Carbonated wine category boom

Clark noted that "an interesting development from last year was the growth in the carbonated wine category, which includes varieties such as Moscato. Exports more than doubled to $30 million. The United States was the destination for 35% of the carbonated wine exports, with mainland China (15%) and Japan (14%) the other major destinations."

The boom in carbonated wine helped underpin a 10% leap in overall wine exports for the year.

"Moscato madness" has been gripping the US market since early this decade. 

Hip-hop culture lent Moscato street cred when Lil’ Kim sang “Still over in Brazil/Sipping Moscato,” while Kendrick Lamar rapped “We need a bottle of Moscatooo/Puts me in the moment for your lovin.”

”Moscato is on fire,” Francesca Schuler, chief marketing officer for Treasury Wine Estates told Market Watch in 2011. “We’re making as much as we can.”

Moscato is particularly popular with Millenials, with 50% of Moscato drinkers are under 45 years of age.

European exports down

While Australian wine exports to most regions recorded growth in 2016–17, those to Europe were down by 1% to $568 million, and Oceania, which fell by 1 per cent to $87 million.

Overall, the total value of exports to the UK - the number one destination for Australian exports by volume - declined by 7% to $341 million. However, there was very strong growth in exports at the high-end of price points, exports at $10 per litre FOB or more grew by 13% to $28 million.

Asian growth continues

Exports to Northeast Asia continued to drive growth, with their value increasing by $178 million (29%) to a record $797 million. Southeast Asia was the next biggest growing region with exports increasing by $20 million (14%) to a record $162 million. 

In 2016–17, exports to Greater China increased by 33% to $721 million.The implementation of the China–Australia Free Trade Agreement (ChAFTA) at the end of 2015 has provided impetus to an already strong market.

Mainland China’s position as the number one destination for Australian wine exports by value was consolidated in 2016–17. Exports grew by 44 per cent in value to $607 million.

Bulk wine exports more than doubled to $37 million - Mainland China accounts for 40% of all Australian wine exports priced at $10 per litre FOB or more.

US export revival

In 2016–17, exports to the US increased by 3% to $464 million – the highest value since 2011–12.

Aside from carbonated wine (mainly Moscato) increasing 10-fold to $11 million in value; the US is the largest destination for Australian Pinot Grigio exports, accounting for over three-quarters of the category’s exports. Pinot Grigio exports grew by16% to $24 million last year.