AUSTRALIAN SHIRAZ: A plum job

Shiraz has been wonderful for Australia’s wine trade. But with Oz wine slipping in popularity, is it time to reeducate the consumer about what the grape is capable of? And indeed about the country’s other varieties? Gabriel Savage reports.

­Look beyond Homer, and there are few epithets which imprint in the brain so readily as Aussie Shiraz. Apart from Whinging Pom perhaps, but then this isn’t a piece on international relations, or is it? There’s no denying that in recent years many UK consumers have become disillusioned with the image of the big jammy oak bombs on which they cut their wine drinking teeth and it’s similarly difficult to disassociate this style from Shiraz.

As Australia seeks to address its image issues in the UK, what does this mean for the grape variety which, despite its role in the problem, continues to dominate the country’s sales here? Well over seven million cases of Shiraz were exported to the UK in 2009, 15% down on last year, but still comfortably topping other varieties. Indeed, there’s still a widespread consensus that Australia and Shiraz are set to continue enjoying a strong partnership.

Clare Griffiths, vice-president of consumer marketing for Constellation Europe, confirms: “Shiraz is an extremely important grape variety for Australia, and particularly for big brands such as Hardys and Banrock Station, as it tends to deliver what the great majority of consumers are currently looking for, ie juicy, ripe, fruit-forward red wines. It also lends itself well to blending and is therefore incredibly versatile.”

This enduring popularity of Shiraz is further backed by Liz Stich, managing director EMEA for Cumulus Estate Wines, located up in the high, relatively cool region of Orange. Stich explains: “Even though we have several other blends and varietals, it is Shiraz under our Rolling, Climbing and Cumulus brands that always steals the limelight.” Indeed, in some corners there is evident ongoing excitement about the new expressions of Shiraz being produced.

David Hodgson, managing director of Fluid DBS, which looks after the marketing and distribution for 3 Oceans Wine Company among others, notes: “WA Shiraz is now coming into its own, especially with the style we are getting from Great Southern and Frankland River.” He typifies the Shiraz emerging from this region as offering “vibrant, elegant structure with savoury spice”, while flagging up that these wines are not the overpowering blockbusters so readily associated with Australia.

From a generic perspective, Lisa McGovern, European director for Wine Australia, highlights the versatility offered by Shiraz across both styles and pricepoints, outlining how “Wolf Blass and Jacob’s Creek demonstrate that the grape can offer immediate pleasure, and wines such as Penfold’s St. Henri or Clonakilla demonstrate that Australia makes outstanding ‘landmark’ wines as well.”

Elegant and sophisticated

With such an obvious crowd pleaser to work with, many of Australia’s producers are now keen to push the message that their bestseller is capable of sophistication as well as mass-market appeal. Mark Wilson, UK general manager for De Bortoli, believes there’s still a fair bit to be done if Australia is going to start winning back its former consumers who have since drifted off to the Old World.

In his view, “It’s now important for Australia to really make a concerted effort to reeducate the consumer and both Chardonnay and Shiraz need a lot of work.” Paul Schaafsma, European director of Australian Vintage, agrees that “big alcohol, big tannin wines of the past have come under criticism of late,” believing that, “particularly at premium price points, people find these don’t have the elegance and style they’re looking for.” In line
with this, he summarises the Australian Vintage goal as “European elegance with Australian warmth”.

However, not everyone is convinced that Australia should abandon the larger-than-life style on which it built its reputation. On the contrary, Griffiths draws on the results of Constellation’s extensive research study, Wine Nation, when she observes: “We have discovered that the more wine knowledgeable consumers – ‘engaged explorers and experts’ – are less intimidated by big, bold flavours, and find deep, rich, full-bodied Shiraz wines appealing. It is with this in mind that we create big Australian wines with oak and structure, such as our Barossa Valley Estate E Minor Shiraz and our blockbuster Eileen Hardy Shiraz.”

Such polarisation in approach suggests that those producers trying to reinvent Australia, or at least consumers’ perception of the country, may find themselves with a strong tide to swim against.

Varieties show

While there is plenty of evidence of ongoing experimentation and quality results with a wide variety of interesting grapes, even the producers admit that these are unlikely to become part of their core offer anytime soon. Adam Marshall, commercial director of Bottle Green, explains: “Shiraz and Chardonnay (and blends from them) definitely still dominate the shelves, and consumer demands, thus more diverse varieties will take time to seed.”

Italian varieties seem to be a particularly fast-growing trend, albeit from a miniscule base. Australian exports of Nebbiolo to the UK leapt by 402% last year, although that still represents just under 2,000 cases. Likewise Dolcetto exports increased by 222% and Barbera by 32%. McGovern sets this within this context of a natural evolution in Australia’s winemaking, saying, “The next generation of winemakers are looking to discover what works best where and make their mark with new varieties and styles.”

Over at De Bortoli, Wilson points to the replanting of its warmer north-facing vineyards in the Yarra Valley with Sangiovese and Nebbiolo in place of Chardonnay. However, he notes: “These wines aren’t going to be made in huge quantities. We’ll want to place them in environments where they can be hand sold right down to the consumer.” Quantities aside, Wilson’s experience tells him that, “Although Australia is making interesting styles now, retailers here are not looking to Australia to provide that interest.”

On this basis, consumers are unlikely to see Australian Vermentino nudging its Shiraz off the shelf in the major retailers anytime soon, but on a more low key level, these are wines which have the potential to generate some fresh conversation about Australia and hopefully intrigue wine lovers enough to take a second look at the country. Looking to the future shape of the industry, McGovern anticipates, “Chardonnay and Shiraz will always be a significant proportion of vineyard plantings but the next few decades may see a shift in varieties that make up the top 10.”

Structural change

Of course, the major change facing Australia at the moment is not so much with its grape varieties, but its whole vineyard structure. Stephen Strachan, chief executive of the Winemakers’ Federation of Australia, summarises the present problem thus: “It has been accepted for some time that Australia has more vineyards than it needs and that the industry must restructure both to reduce capacity and to change its product mix to focus on quality wine to match market opportunities.” By tackling this thorny problem on a nationwide basis, Strachan explains that the Wine Restructuring Action Agenda (WRAA) aims to reverse the discounting mentality which accompanies oversupply.

He confirms “there are pockets of vineyards in even some of our highest-profile regions that are uneconomic in terms of cost of production”. Tracking developments here, Wilson predicts: “I think it will get worse before it gets better. The Australian government is not like France and giving people subsidies to pull up vines.”

He points in particular to some of the largest players in the industry, who are currently tied into long-term grape buying contracts, suggesting, “when that period runs out, then I think you’ll see a rethink”. However, there is evidence to support Strachan’s claim that “there are signs things are already improving.”

Schaafsma points out that Australian Vintage began speaking with its growers four years ago about the diminished requirement for grapes. On this basis, he asserts: “It’s incorrect to say people have been misleading the growers. If anything we’re probably in a better position now with our grower contracts to improve the equilibrium.”

Of course, everyone is all too aware of the inseparable link between oversupply and Australia’s current image problems. Strachan highlights the challenge faced by Wine Australia in an environment which has seen oversupply “switching the focus away from the quality and value we offer at all price points to a mistaken belief that Australia only makes cheap wine”.

Meanwhile Simon Thorpe MW, managing director at Negociants UK, stresses the importance of ensuring “a clear range hierarchy and to maintain a consistent and logical pricing policy.” He explains: “It must be difficult for the UK wine consumer to understand the true value of a wine when we as an industry are so promotionally dependent.”

In a bid to challenge and change the perception of Australia among both consumers and the trade, August 2009 saw the launch of Australian First Families of Wine. Established by a 12-strong group of some of the country’s most high-profile family-owned wine estates, the drive to highlight Australian wine’s character, particularly at an individual and regional level, occupies a central place in the organisation’s mission statement.

It’s still early days, but several industry figures have welcomed this body as a means of injecting some fresh energy and focus into Australia’s proposition. Thorpe believes: “Initiatives like AFFW are great building blocks for this and offer the category a real opportunity, highlighting the provenance and history of the Australian wine industry.”

While it’s obvious from all of this that Australia’s issues extend far beyond Shiraz, the country’s approach towards its flagship variety neatly reflects the wider areas of contention. Both country and variety continue to enjoy a strong performance in the UK’s wine sales, yet both are steadily losing ground and it is becoming increasingly clear that there is unlikely to be a common consensus on the best path forward.

Given the sheer range of production scales, geographical factors and target audiences involved, not to mention personalities, a single solution looks implausible. If there is a common belief, however, it is that all concerned recognise the urgent need for Australia to excite people just as it did when it first burst onto the international wine scene.

Gabriel Savage, January 2010