Let’s get regional

Can the country that championed inter-regional blending and varietal labelling at the expense of regionality now have it both ways? asks Penny Boothman

"A UK SURVEY was done a few years ago, as to what the top five Australian regions were," says Jim Humphrys, international trading manager of the Hardy Wine Company, "and it came back as the Barossa Valley, the Hunter Valley, Coonawarra, Jacob’s Creek and Nottage Hill."

I think we’ve all heard this old joke before, but yet it still rings true.  "Regionality" is the latest buzzword on the Australian wine scene.  Producers are suddenly very keen to let customers know exactly where they’re from. But why? For a country with a long history of inter-regional blending and ine production laws that are, shall we say, less than stringent, this sounds like a slightly self-defeating proposition.

Indeed, this thinking is moving in entirely the opposite direction to most European wine producing countries.  France, for example, is busy creating bigger and bigger umbrellas under which to produce wine, in a bid to become far more accessible.

"Promoting regionality in Australian wine clones the Australian image and yet makes the offer more interesting," explains Kym Milne MW, wine consultant at Global Wine Solutions.  "It could also work as a ladder to other brands."

The one thing that regionality depends on is that the regions actually mean something to the consumers.  We all know what style of wine comes from Bordeaux, but Barossa? "We’d like to think there’s a real awareness of Australian regions, but there’s not," Humphrys continues.

"We took everything away from regionality and now we’re trying to re-establish it."  And this is the major snag with Australian regionality – the country practically invented varietal labelling and turned its back on localityspecific wines.

It could be argued that if the Australians are having difficulty getting consumers to grasp the concept of regionality, then they have only themselves to blame.  "Our continent is so huge – bigger than the USA – we have the perfect reason to educate consumers on the unique regionality aspects of the wines themselves," says Craig Thomas, commercial manager of McGuigan Simeon Wines Limited.

"We need to bring regionality into the mainstream and ensure that we bring the consumer along with us."  But should geographical understanding really matter? Very few Bordeaux fans have actually driven down route D2, surely the real "regionality" proposition is about adding another layer of value to your product? It’s the most classically simple aspect of France’s AOC system: the wines at the bottom of the pyramid come from larger general areas and are not as good as the wines at the top of the pyramid, that come from the tiniest, most strictly delineated individual slopes – which therefore command a higher price.

Thus, if Australia wants to keep a maturing market entertained and encourage drinkers to trade up, they have to provide a way up this pyramid.  Those who started out drinking £3.99 generic Chardonnay could be tempted to move up to a Yarra Valley Chardonnay at £5.99.

Points of difference

It’s inevitable that the success of varietal labelling will be incorporated into regional promotion.  "Regional specialities credibly mount a case," comments Michael Hill Smith, of Adelaide Hills producer Shaw & Smith. "Hunter Valley Semillon is like no other wine in the world and these best of breed wines really add a point of difference."

This is certainly another way to approach the country’s marketing, appealing to the aspirational drinker, rather than just the drinker, as Australia always has before.  But could it be Australia’s own image holding it back? The laid-back, beachdwelling, stubbie-swilling cliché that brought us "bottled sunshine" is hardly likely to appeal to those who are particular about which side of the hill their Cabernet comes from.

But perhaps it’s time for Australia to grow up, and this could put substance behind brand Australia.  "The focus is coming on to regionality," Humphrys continues. "It’s the next step in the evolution of Australian wine in the world marketplace.

We’veestablished a very strong reputation as suppliers of really good value for money wines across all price points."  However Australia has a strong image within the international market and producers also recognise that it is important for the industry as a whole not to dilute that.

The versatility and reliability of interregionally blended wines have been the mainstay of launching Australian wines onto the UK market.  However, while wine labelled "South-East Australia" has brought huge numbers of consumers to the sector and positioned Australia at number one by volume in the UK off-trade, the major concern is that it could also deter consumers from trading up to regional wines.

"There is a heightened interest in regions and this should be promoted, but not to the detriment of what Australia has built its reputation on – the ability to provide consistency and quality year after year – which is largely due to our ability to blend across regions and varieties," comments Nick Blair, general manager (international), Orlando Wyndham Group.

"It would be better to educate consumers about the breadth of the Australian offer in, say, Shiraz at various quality levels, which would incorporate both regional and blended wines and let the consumers decide what they enjoy.

"Regionality is an important part of the tapestry," he continues, "but we can’t lose sight of what makes Australia.  We need to push volume in the £7-8 bracket with multiregional wines."

Brand Australia is certainly a strong base to build on. "One of the great attributes Australia as always had is the ability to promote the country ahead of any one winery and this is something I see as fundamental to the ongoing marketing of the country’s premium image," comments Brett Fleming, european manager for Yering Station.

"Working closely with the AWB is crucial to this, as well as showing the regional differences within our own wineries."  And yet, "We believe strongly that regionality is critical to our success.

This can be brought about through key routes to market and maximising the Australian message outside the dominance of the big companies." 

On-trade opportunities

One of Australia’s strengths up to now has been the collaborative nature of the brand Australia proposal.

However, there are obviously going to be some areas of the industry that will be more receptive to this kind of marketing than others, and most producers have their sights set on the on-trade and independent sectors.  "Getting into the on-trade is a lot of foot work.

There’s a lot of labour involved, but that’s where regionality has to work," Humphrys believes. "Regionality is relevant for higher priced wines (above £8.00)," says Toby Hill, regional export manager at Angove’s.

The company has recently launched a Vineyard Select Range, of specific varieties from specific regions, such as Clare Valley Riesling.  "These wines represent the best varietals from these key regions," Hill explains.

"This formula has proven extremely successful at this superpremium level."  However, "The marketing of regionality in the UK remains in its infancy.  The majority of wine sold in the UK states Wine of Australia and there lies its strength," he continues.

"We have learnt from the Europeans not to confuse the consumer about regionality at the lower price points."  The backpack factor The UK is still the main export destination for Australian wine – both in value and volume terms – but can other export markets be persuaded to trade up to regional wines?  "They already are," says Humphrys.

"If you compare the average price of wine sold in the US to the UK it’s significantly higher.  There’s a real recognition of regional Australia within the US marketplace with people who are serious wine drinkers.

The success of things like Grange Hermitage and Henschke’s Hill of Grace have really been significant in establishing Australian Shiraz."  However, European markets may prove more challenging. "Germany’s growing from a small base.

That’s one country that’s not going to go for the regional focus – Australia’s the region!" Australian wine has now been in the UK for over 20 years and there is a new generation of drinkers discovering Australia.

It may be the case that many of brand Australia’s original target audience didn’t understand the regional aspect of Australian wine, but how many of them had been backpacking to Uluru in their gap year? Younger wine drinkers in the UK now have a better understanding of Australian geography than ever before.

The major hurdle is the level of communication required to promote regionality, but even this can’t be as hard as getting people to take Australian wine seriously in the first place? Those who have been exporting to the UK since the beginning can remember that it was not an easy time.  "People would just laugh; it was depressing," comments Hill Smith. 

And look who’s laughing now.