AUSTRIA: Out of Austria

It is bought in Germany, Switzerland and the US, but the majority of Austrian wine is still consumed domestically. Fionnuala Synnott considers its prospects in the UK market

The UK does not register on Austria’s radar, at least not in wine terms. In fact, when looking at the top 10 export countries, the UK is conspicuously absent, while Germany is in pole position accounting for 56.5% of exports.

“The Germans buy our wines because we speak the same language and have a common history. The wines are widely available in the off-trade – you can find Grüner Veltliner in most supermarkets. It also has a good standing in the specialist shops,” says Susannah Staagl, marketing manager for Wines from Austria.

Michael Schloss, winemaker at Schloss Gobelsburg, likens the relationship between Austria and Germany to that of Bordeaux and the UK. “In Germany, there is a very old history of drinking Austrian wine, which goes back to the Middle Ages.”

Austrian wine is also successful in Switzerland and the US – the second and third most important export countries respectively. Although popular on the East and West Coast, Austrian wine is far from mainstream in the US. In fact, according to Staagl, Austria, in particular Grüner Veltliner, has a standing as a well-kept secret.

But it’s a different story in the UK where the category struggles to sell any real volume. “UK consumers don’t associate Austria with wine. This is an obstacle we have to overcome”, says Staagl. Tim Marson, Austria buyer for Bibendum, agrees: “As far as exports go, Austria has historically been focused on the US, where there is a greater acceptance of Austrian wine and there is less baggage from [what became known as] the antifreeze scandal in the 1980s. It is playing catch up in the UK.”

Small and premium
In the UK, the Austrian category has built a reputation for premium wine, sold mostly by independent retailers or through the on-trade. “Because people don’t think of Austria as a producer of quality wine, we need someone to [hand]sell Austrian wine,” says Staagl. Although small, the following that Austria has built in the UK is loyal. Interest appears to have grown since Wines from Austria conducted a comparative tasting of Chardonnay and Grüner Veltliner in London six years ago. “The top four wines were Austrian: three Grüner Veltliner and one Chardonnay. This raised a lot of awareness of Austrian wine, and showed how competitive it can be in quality and in price,” says Staagl.

Charlotte Bendel, who set up Merry Widows Wine, an Austrian on-trade wine supplier, earlier this year, also noticed MWs and wine critics getting into Austrian wine around the same time. “Now there is some public interest, largely off the back of Alsace and German wine. New wine drinkers are eating sushi, Thai and pan-Asian food and are looking for something to suit their food habits.” Austrian wine, particularly Grüner Veltliner, has a reputation for being versatile and food-friendly and is therefore popular with sommeliers.

At Zuma, Grüner Veltliner is so strong that it has its own category on the wine list (the list is arranged by varietal). “We recommend it very often and it is well-received by customers. Grüner Veltliner works very well with pan-Asian food because it has mineral undertones and is slightly salty. We also offer an Austrian red at a medium price point that has acidity and structure, richness of fruit and spice. Mineral but fruit-driven wines are what you need for pan-Asian food,” says Miriam McLachlan, head sommelier.

However, knowledge of Austrian wine hasn’t really moved beyond an elite group of wine consumers. This is partly because it can be hard to get hold of. It is often said that high domestic demand makes it difficult to source wines from Austria and, with domestic consumption around 75% (approximately 250 million litres), that leaves little for export.

But Staagl thinks the real issue is that UK importers are competing for the same wines. “People are looking for wines from top wineries, especially in the on-trade. But Austrian wineries don’t produce a lot of wine. The average winery is 2 hectares, or at most 15-20ha.” If you produce 5,000 to 20,000 bottles you need to allocate them. The supply from established wineries is therefore not large enough to satisfy demand.

But like most challenges in the wine trade, any problems with availability are easily surmounted with the right buying power. Waitrose, which has been raising customer awareness of the category through in-store tastings and publications, claims not to have any supply issues. “We don’t have any real problem obtaining stocks of wines from the top estates. I have recently purchased parcels from two of Austria’s best producers, which will be on sale in some of our branches later in the year,” says Austria buyer Ken Mackay MW.

New generation
Staagl would like to see more retailers source their wines from less established wineries. “Austria has a huge range of up and coming wineries, with sensational wines at good prices.” On a recent trip to Austria, McLachlan was impressed by the individuality of the wines. “This is a really strong point for appealing to customers,” she says.

But, according to Bibendum’s Marson, one of the big challenges facing Austria is a lack of voice and branding. “Money in the Austrian fraternity comes mostly from boutique wineries. Producers are not getting together to create a brand with a marketing budget and know-how. They therefore don’t have the volume or the prices to be big [in the UK off-trade].”

As yet, there are no big conglomerates in Austria – only family-owned producers with very small amounts of wine. But the industry is changing. “Some of the older generation are selling their land and there is a new generation of winemakers making very approachable wine, applying their Austrian technique to international grapes such as Chardonnay and Sauvignon Blanc,” says Bendel, of Merry Widows Wine. McLaghlan thinks that Austrian producers have redressed the way they make wine, partly as a result of the so-called antifreeze scandal. “A new wave of winemakers has introduced new concepts. They are proud of Austrian wine and Austrian terroir but their modern techniques have led to cleaner wines.”

In fact, the dynamics of the category are set to change even more as some Austrian producers look to make a splash with an international brand. Schloss Gobelsburg is one example of a winery with international ambitions. Since it started 12 years ago, the company has built up its exports from 1 to 66% of production. Schloss explains: “When I took over, I wanted to turn the company into an international brand. Probably, most producers are focusing on German-speaking markets but we had the possibility to set up an international strategy and have tried to get distribution all over Europe, the US/Canada and parts of Asia.” For Schloss, there is no question of selling second best abroad: “We could easily sell these wines in the national market. It’s a question of what horizon you see [for your business], whether as a national or an international brand. I’ve always believed that we had the possibility to be known worldwide.”

Glorious Grüner
If Austria is to grow its market share in the UK then Grüner Veltliner has a key role to play. “Grüner Veltliner is Austria at its purest,” says Staagl. In addition to the ease with which it can be matched with a variety of foods, one of Grüner Veltliner’s quality differentials is its ageing capacity. “In general, Austrian producers don’t like to age their wines but when they do…” says Darren Willis, manager of the Battersea branch of Philglas & Swiggot. “Grüner Veltliner will be the one that captures the imagination even if this underestimates the quality of their Riesling,” he adds.

This doesn’t mean it’s bad news for Riesling. “I don’t think Riesling will be left behind as top wines will always be sold on their reputation. There is an interest in Austrian Riesling alongside Grüner Veltliner.” Mackay adds: “Grüner is obviously the key point of difference, but perhaps the powerful, mineral-laced Rieslings are under-appreciated and can reach even greater heights.”

Austrian Riesling sales are in growth and, according to Mackay, there is definitely a niche market for the top wines, retailing at £15-20. This is hardly surprising given that the country produces some world-class Riesling, alongside Alsace, Germany and Australia.  But the grape is not always easy to understand and has failed to capture the mainstream consumer’s imagination. Staagl observes: “Mainstream consumers have a different view of Riesling from the top sommeliers. In the UK, it still fights with its image. People still link it with Blue Nun and Germany and sweetness.”

However, Schloss Gobelsburg’s Schloss is not convinced the varietal is that important. “I’m not sure if it’s about the grape variety or the style of the wine. Grape varietals are the medium to express where they come from. It is more important to look at the basic characteristics in the personality of the wine.”

Although Austria is rightly perceived as a white wine producing country, it also produces some interesting reds, including the native varietals Zweigelt, Blaufränkisch and Blauer Portugieser. But most red wine produced in Austria is drunk domestically. Bibendum’s Marson explains: “There is potential for reds but very little is sold out of the country. However, there is an opportunity for something at a more reasonable price with interesting varietals such as Zweigelt rather than Pinot.” Mackay adds: “Blaufränkisch also gives supple, attractive wines.”

Philglas & Swiggot has had some success with Blaufränkisch. But, according to Willis, Austrian reds are not international in style and “are not the easiest grape varieties to get on with”. He expects this to change: “The category has more room for manoeuvre and I predict a big interest in the next decade.” Staagl comments: “At the moment, we don’t have a defined red wine style, which makes it difficult [to sell] abroad. We have two indigenous varieties with a good story to tell. People don’t know these wines, the same way they didn’t know Grüner Veltliner 10 years ago. But we have a number of young, dynamic winemakers who travel a lot.”

In addition to developing the country’s red wine profile, Wines from Austria is trying to develop Austria’s on-trade presence. “For the future, we would like to get into gastropubs. We think we can be very successful in this arena as Austrian wine is sold more by the glass than by the bottle.”

In fact, Bibendum’s Marson has already noticed the beginning of a trend: “Increasingly, Grüner Veltliner is the domain of the gastropub, and sits beside Albariño on quirky wine lists.”

With its small, premium production (largely dependent on one key variety), Austria is often likened to New Zealand. However, if the category is to replicate New Zealand’s success in the UK, it needs two things: a flagship brand to build consumer awareness

and recognition, and a good supply of easily available wines priced from £6-10.

But Zuma’s McLachlan believes it would be a mistake for Austria to follow the branded route.  “Austrian wines are very often produced by smaller family-owned estates so approaching the UK market by brands would not be appropriate. A volume/brands approach would defeat what Austria is about.” Instead, she believes that Austria should capitalise on its individuality, making the most of its indigenous varietals and unusual names. “The names can be difficult but they can also be fun. Austria can afford to introduce more quirky wines. Customers in the on- and off-trade are more open [than they used to be] as long as they are given the right cues and guidance.”

db © September 2008