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The light direction
As consumers’ palates lean towards clean, crisp and elegant wines over big, fruit-forward, heavy styles, so Australia’s wine industry must evolve. By Fionnuala Synnott
After years of favouring bold, fruit-forward wines, it appears that consumers are now moving away from them, preferring a fresher, more elegant style.
This trend appears to be driven by a change in consumer drinking habits. Mark Wilson, general manager, UK accounts, at De Bortoli, explains: “Ten years ago, wine was served as an alternative to beer or spirits in pubs or at home but it was not considered a drink to have with food. Now it is drunk regularly with dinner.”
There also appears to be a change of emphasis in how consumers relate to wine. Nick Butler, wine director at Bottle Green, comments: “When it comes to whites, I am perplexed by this trend. It appears that bland is back. For 20 years, flavour and freshness have been driving the category but if you look at today’s Pinot Grigio and Sauvignon Blanc, it is almost as though consumers are not putting the wine first. Instead, it is just there as part of the entertainment, to facilitate the food experience.”
Price, as ever, is also a factor in the decision-making process. Paul Schaafsma, European regional director, Australian Vintage, says: “Pinot Grigio is popular because of its price, not its varietal character. A typical supermarket Pinot Grigio is not challenging. It is refreshing, crisp, easy-drinking and has a cool Italian name.”
Changing tastes
The demand for these lighter styles is also due to UK consumers’ increasing exposure to wine. According to Victoria Angove, regional export manager at Angove’s Wines, continued consumer interest and involvement in wine has driven this trend. “Australian Chardonnay and Shiraz were many people’s first experience with Australia and/or wine. But tastes evolve and change. With this, for some, comes experimentation with new wines, styles and regions.”
This is not just a UK fad either. Neil Barker, commercial director, UK & Ireland, Foster’s EMEA, says: “Globally there is a clear consumer trend towards crisper, lighter wine styles that are refreshing and more acidic.” According to Adrian Atkinson, wine development director, Pernod Ricard UK, this is a major trend across the whole wine category: “Witness the rise of Sauvignon Blanc from New Zealand, the growth of rosé, the rise of sparkling wine and Pinot Grigio.” In fact, demand for this style of wine appears to be part of a bigger macro consumer trend: “People are changing food styles and are looking for lighter, fresher lifestyles. They are therefore looking for wines to complement their lives.”
Australian credentials
Australia is often associated with full-flavoured, full-bodied wines. and some within the trade wonder whether the category will be able to satisfy this new consumer demand. Certainly, some of the classic styles, particularly those marketed as “sunshine in a glass” are not that food-friendly. “Although these wines have their virtues they tend to be less complementary when served with food as they tend to overpower it”, says Wilson. Barker, meanwhile, thinks any doubt about Australia’s ability to produce elegant wines is based on an erroneous impression of what the country has to offer. “It is wrong to associate Australia solely with heavy, oaky Chardonnay. This perception is a hangover from the 1990s. Some outstanding, elegant Chardonnays are made in Australia.”
Australian Vintages’s Schaafsma is also fed up with the wine world saying that Australia has nothing new to offer. “Australian Pinot Grigio, Sauvignon Blanc and Verdelho are proving popular with consumers who don’t want wines that are too full-bodied or full-flavoured and want acidity and a crisp finish.”
Meanwhile, at De Bortoli, Wilson thinks there is no reason why Australia can’t meet the requirements of those consumers looking for lighter wine styles. “Australia has the capacity to make very good regional wines. If you pick your fruit early you can have more freshness.”
On a practical level, it seems that Australia has enough fruit to make these wines, despite the difficult vintage. Melissa Worthington, marketing manager at Wine Australia, says: “Some areas had a superb vintage. They can therefore fulfil the demand for lighter, fresher wines such as Sauvignon Blanc from the Margaret River.”
Consumer demand for refreshing wines is bound to have an impact, even on those regions known for their full-flavoured wines. Butler comments: “The McLaren and Barossa valleys may be more tolerant of greener tones in their wines from now on.” Yalumba’s chief winemaker, Louisa Rose sees the demand for fresher wine styles as an opportunity for some of the more well-known regions. “For example in the Barossa there are Shiraz wines being made with less alcohol and less obvious new oak influence that are quite fine in structure and savoury in character. There are many producers focusing on making Chardonnay wines with more elegance and finesse and less obvious tropical fruit and buttery flavours than the traditionally associated ‘Aussie style’.”
But Australia should be wary of losing its character when trying to satisfy consumer demand. Rose comments: “Australia is a very diverse country and is capable of producing a great range of styles, including those that are lighter and more elegant. However, ‘light and elegant’ can sometimes be a euphemism for lacking flavour and length and we don’t see that as a desirable attribute for Australian wine.” Constellation Europe’s president, Troy Christensen, agrees: “Australia has some interesting wine styles. They’re bolder than Italian Pinot Grigio but that’s OK. When you do something well you shouldn’t take the flavour out of the wine in order to compete with others.”
Australia is obviously fighting hard to remain the UK consumer’s favourite, but what will happen to all the full-flavoured, full bodied wines it is so good at producing? Atkinson is not concerned about the future of these wines. “There is still a demand for the traditional styles and Australian Shiraz will continue to have great success. This is why we are relaunching the Wyndham range, which is a timeless classic.”
Angove, meanwhile, thinks consumers are expanding their repertoire to include lighter wine styles rather than moving away from full-flavoured, full bodied wines. “We are a large country, with many different geographic regions and microclimates presenting many growing conditions for our grapes. The result is an incredible diversity of wine styles. For many years, these diverse wine styles haven’t been available in export markets and it’s very exciting that there is now some momentum building.”
Iconic regions
Ah yes, regionality. This is definitely the buzz word in the trade when it comes to anything Australian, thanks to Wine Australia’s new strategy of highlighting the country’s iconic regions. The advantage to this strategy is that it will bring some regions that have been in the shadow of well-known areas such as the mighty Barossa Valley to the consumer’s attention. Tasmania is one region that stands to benefit. Yalumba’s Rose explains: “Tasmania is certainly producing lighter, more elegant styles, including some exceptional Riesling, Sauvignon Blanc and Gewürztraminer wines, also Pinot Noirs that are showing both elegance and depth.” Meanwhile, Butler at Bottle Green thinks Western Australia “should be well in the driving seat. There is already a good demand for the region’s wines in the US”.
But the real raison d’être of the regionality strategy is to get consumers to trade up within the regions they already know. Butler explains: “When someone likes Shiraz, they can choose to buy it either from France or Australia. Consumers know it’s different because of where it’s grown. We want to show that this is also true within Australia – Shiraz will be different depending on whether it is grown in cooler or warmer regions. Regionality is therefore about getting the consumer to take that next step.”
But not all of the regions that have put Australia on the map are iconic. The Riverland, where Australia sources the majority of its fruit, does not feature heavily in Wine Australia’s regional heroes strategy. Yet according to Angove, the Riverland remains a vital component of the Australian wine industry. “It’s a region that has seen much research and development over the last decade. While it has traditionally been ‘the engine room’ for many very well-known and respected ‘commercial’ Australian wine brands, in tandem with this has been planting of Tempranillo, Viognier, Grenache, Petit Verdot and other alternative varietals which are making absolutely stunning, fresh and elegant wines.”
Schaafsma agrees that you can deliver good wines from the Riverland if you manage your vineyard correctly. Viticulture is a priority in the region. In fact, many growers in the Riverland are working towards, or have achieved organic certification thanks to a warmer climate where disease pressures are virtually nil. “The Riverland has the potential to lead Australia in low input organic viticulture”, adds Angove.
>Undoing good work
Australia has built its success on marketing its wines by varietal, so much so that even the terroir-focused French have started doing it. Is the new regionality strategy likely to undermine all that Australia has achieved in this area? De Bortoli’s Wilson sees varietal labelling as an entry point for consumers but says “a sense of place is more important than the varietal characteristics. You should be able to taste the soil rather than the varietal.”
Rose feels that the promotion of varietals can support the regionality strategy. “There is certainly room for Australia to focus on varieties such as Riesling, Pinot and Sauvignon Blanc, (as well as other ‘new’ varieties such as Rousanne, Vermentino, Albariño and Fiano)… However, any promotion of these varietals can be done in conjunction with regionality. As particular varieties and styles mature they can become synonymous with regions and are not easily separated. However popular these varieties and styles are becoming it does not appear to be at the expense of other styles, but rather ‘as well as’.”
Barker thinks there is an opportunity to create a link between the varietal and the region, something Wine Australia is keen to see happen. “We can employ a best of both worlds approach by using the grape variety to get people into the price point, then persuade them to trade up.” This strategy has worked effectively in the US. “Consumers got into Chardonnay then traded up to Sonoma Chardonnay. Australia is playing that game, getting people to trade up to Barossa.” says Christensen.
Angove thinks the regionality strategy adds to the work Australia has already carried out in the export markets. “To grow and develop Australia’s wine exports, we need to be vigilant in adding to consumers’ experience of Australia – enhancing their knowledge, showing them the ‘new’. Introducing the regional element to the promotional mix adds to the offer and for those ‘involved wine consumers’ this is a very positive thing – it adds to the message and does not detract from it.” Barker makes a valid point: “Australia is a bigger category than France, yet you wouldn’t lump all of its wine regions together.”
Regionality strategy
Atkinson thinks Australian wine producers should be adding value where they can: “All of us should be talking about grape varieties but the Australian industry’s financial structure is geared around strong brands that have presence. The varietal is important but more so is having brand equity.” He therefore believes that Australia should focus on all of the four building blocks of the marketing strategy: “Regionality must only be part of the consumer story of brand Australia.” Barker agrees: “In the UK, in particular, Australia has expended a lot of its energy establishing power brands. Brand development will have to continue alongside regionality.”
Bottle Green’s Nick Butler says: “The message needs to be that in different regions you get different styles. It is not about employing a confining prescriptive appellation. We must leave it up to the wineries to market themselves.” Christensen agrees: “We are not trying to out terroir France but we do need to show that Australia is more than a constant supplier of blends.”
Although Schaafsma is convinced that the regionality approach will work at the top end of the market, he thinks the mainstream will respond better to varietal marketing. In fact, he sees one big disadvantage to the regionality strategy: “The problem is that there are finite resources in the areas that are being promoted. Most of the wine still comes from the Riverland. We can’t redirect all consumers outside the region. We deliver commercial wine with the flavour that consumers want. We can’t turn our back on this and focus exclusively on Pinot Noir from Tasmania.”
Australia must be wary of treading too narrow a path when promoting its regions and not forget what made the category such a hit with UK consumers. Schaafsma says: “We have to be very careful about just focusing on regionality because it is so iconic. After all, people don’t buy Australia as an alternative to Bordelais first growths.”
Time to trade up
Whether you support the regionality strategy or not, one thing is clear: Australia has seen the writing on the wall and is determined to get consumers to trade up. De Bortoli’s Wilson says: “The question that Australian producers should be asking is how they can hold onto their consumers as their palates develop.” Wine style is a vital contributor to this process. After all, if you get the style right, the consumer will follow. Schaafsma says: “There is so much interest in New Zealand Pinot Noir, we can’t keep churning out big reds. In the upper echelons, people are fed up with Parker-rated wines that have heavy alcohol. People don’t want to be blown away by high flavour and tannins. We are looking at getting back to Bordeaux blends. Australia can learn a lot from these. After /all, not everyone is eating steak every night.”
In other words, the biggest issue for Australia is not regionality, but getting the style right.
© db May 2008