AUSTRALIA Trade Talk

We ask the question: Where should Australia focus its efforts in 2007? Established markets? New ones? And with what styles and price points?

Henry John
marketing manager, HwCg
“The UK should remain a key focus for Australia as it is vital that Australia maintains its number one position in this competitive market place. New markets are always important to consider but with the established ones you have a solid base of converted consumers that it is necessary to keep engaging with. Australia’s volume comes from its success at the lower price points and this must not be ignored. Of course premium wines are important as is trading up, but Australia has to keep delivering to the mass market – there are plenty of competitors who would happily fill that slot. At the premium end regionality is an important message to develop and build consumer understanding, creating interest for buyers who might otherwise look outside of the category.”

Catherine Boot
category manager, WaverleyTBS
“There is still a huge opportunity for Australian wines in the on-trade, where French wines continue to dominate despite a diminishing share. This stretches from entry level opportunities, where reliable fruit driven drinkable Australian wines can replace sometimes insipid wines from Europe at an equivalent price, up to the £15-25 price point on a wine list where flavour-filled, easily-recognised New World wines continue to replace what were once Old World must-haves, such as Petit Chateaux Bordeaux, Sancerre and Muscadet Sur Lie.”

Doug Lehmann
managing director, Peter Lehmann Wines
“Next year and going on its really going to be important to look quite strongly at the middle to upper ground. We’ve established ourselves well at the sharp end, if you like. There’s now a job to do at the middle and upper end of the market, in the UK and elsewhere. Australia’s established pretty well everywhere. There are emerging markets, such as China and India, but it’s important to focus on our established markets. It’s also important to focus on the true and trusted styles The way the world is, a lot of it is done on price – we’ve got to do a lot more on the quality aspect. We’ve got plenty of good wine that people don’t even know about. It’s just about hard work now. There’s no magic formula. It’s going to be interesting, as we’re expecting smaller vintages in 2007 and probably in 2008.”

Jerry Lockspeiser

managing director, Bottle Green
“Australia is not a homogenised block – there is not one strategy that fits all producers. What a small winery producing 10-100,000 cases per annum should do is make themselves identifiably different to both the giants of the industry, mostly now owned by Constellation or Fosters, and the second tier of mass volume production line wines. These categories dominate Australian sales in the UK, meeting mass market demand extremely successfully. Those outside this level should focus on their independence of business, of wine style, of route to market, of identity and of consumer appeal. It is no longer true – if it ever were – that what is good for Fosters is good for Rutherglen Estates. Consumers tell us that while they love most things about Australian wines they are pretty industrial and impersonal. There is an opportunity here for the middle and small guys.”

Clare Griffiths
vice president of brands marketing, Constellation Europe
“I think next year Australia should focus its efforts on driving prices up and trading the consumer up. That will come down to how brands are marketed and we will need to take an added value approach. That will involve the likes of sampling activity and education. We need to give consumers a reason to pay extra money for Australian wine.”

Peter Bisley
sales and marketing director, PLB
“Australia seems to be in most markets now. However, in the UK, I think there is still a lot of work in the on-trade, where France is still number one. Also I still feel the regionality message is still not getting through to the end consumer.
From a style point of view I think the days of the heavily oaked Chardonnay and hugely alcoholic, hangover inducing Shiraz are numbered. Cooler climate areas such as Adelaide Hills in South Australia for Sauvignon Blanc and Heathcote in Victoria for Shiraz are becoming more available in the UK. Price points come under pressure every March. I have seen sales die as a result of a four pence price rise. We need to work with the authorities so we can balance the need for duty rises with commercial considerations.”

John Pepper
marketing manager, Buckingham Vintners
“The key to continued Australian success in 2007 will be premiumisation. The more expensive big brands have been discounting heavily and therefore risk eroding consumer confidence. A new generation of premium brands is required to continue to drive Australia’s success in the £5-10 price bracket and ensure that its average price continues to rise.
At Buckingham Vintners our focus will be very much on the Reserve level of Buckingham Estate and the recently launched Winemaker’s Reserve. Our research has comprehensively demonstrated the consumer need for a sophisticated Australian brand. There is also a continuing need for innovation to find ways to bring new consumers into the category.”

Martin Strachan
managing director, Negociants UK
“Distribution through the established global markets will continue to be the backbone of the Australian wine industry, however we are all chipping away at the peripheral markets with a belief these will continue to grow. There is a need to invest in these markets and we need to ensure we add value for consumers in the drinks category across all markets. We need to concentrate on communicating to consumers about the quality of Australian wine with a focus on the premium end of the market. Innovation with new and interesting varieties adds value for many consumers, and the on- and off-trade are sectors that are challenging but rewarding. Wine quality, training, clear marketing and efficient distribution will continue to be the key to success.”

Graham Cranswick-Smith

managing director, Kingston Wine Agencies
“The biggest challenge for Australia is to restore value perception while retaining its consumer base as distress sales reduce and prices firm. Extensive frosts plus a deteriorating water situation mean that 2007 will see the beginning of the end of the surplus and a move to re-focus on Australian quality/value, and not just price discounting. Further growth in North America will be the key driver for Australia in 2007 with both branded and bulk exports expected to grow. Exporters to the UK will be looking to increase export value as below cost clearance activity reduces, and Asia will continue to grow from a very small base. Price points will remain at the £3.49 to £5.99 levels, but within that there should be some upward movement in the proportions sold at each price band.”

© db January 2007