 |
Sponsored Profiles |
|
|
Page 1 of 8 |
|
|
Such success, though, is no accident. Grüner Veltliner and company have been be-ing skilfully positioned as niche products: new, sexy and full of character, but by no means too fancy. Austria’s wines are perfect for innovative wine merchants, trendy wine bars and ambitious sommeliers from Tokyo to Los Angeles. In times of global production and inter-changeable profiles, this is a clever strategy that promises great payoffs in the long term.
Even the Austrian Wine Marketing Board, better known as ÖWM in the wine world, was visibly surprised by the final statistics. In early January, general director Willi Klinger and his staff were still expecting total exports to remain slightly below the €100m mark. Even that would have been a new record; but it turned out much better. Owing to a remarkably strong December, value soared to €105m, of which €92m stemmed from bottled wine exports.
In order to correctly interpret these numbers, a survey of past results is of use here. Exports in 2000 came to the modest sum of €40m, with an average price per litre of only €1.12. Even if you deduct the inexpensive bulk wines, bottled wines still weighed in at only €2.24. Today the average price is €1.88. For bottled wine exports, that number has risen €2.57 per litre or €3.42 per 0.75 litre bottle.
In other words: Austria has increased exports by 56% since 2000, pushing up bottled wine volume by 147% and value by 161%. The average price per litre rose by 168%. Impressive numbers, yes, but what are the reasons for Austria’s export success? A combination of vari-ous factors, with quality, obviously, heading the list. Without quality, such an increase in volume and, more importantly, in value would never have been possible.
Factor 1: Quality
Among experts, Austria’s wines have enjoyed a high level of appreciation for many years, but this was not always the case. In the 1990s, a great deal of persuasion was required to move beyond the loyal circle of domestic imbibers and convince wine lovers abroad of the quality of Austrian wines. To do so, the ÖWM availed itself in the late 1990s of a means still quite popular today: it invited journalists and sommeliers to attend a comparative tast-ing of the finest 1995 Grüner Veltliners with a similar number of hand-picked Burgundies from the same vintage. The Grüner Veltliners took all three top prizes.
Members of the foreign press, insofar as they had not participated in the tasting themselves, greeted the initial results with understandable scepticism. Later, though, similar tastings corroborated the results. In 2002, the ultimate accolades followed in London when Jancis Robinson requested that the duel be restaged. This time, though, the tasting took place ac-cording to her rules. There were no constraints on vintage, and the team of white Burgun-dies was enhanced by renowned Chardonnay from Italy as well as the New World. The |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 2 of 8 |
|
|
re-sult caused a stir when first place went to the 1990 “Vinothekfüllung” from Emmerich Knoll, followed by the 1997 Lamm from Willi Bründlmayer. Seven Austrian wines, includ-ing five Grüner Veltliners, numbered among the top ten.
From then on, Austria received lots of attention from the English trade press. There was still a long way to go, though, before that conceptual breakthrough could be translated into sales in markets such as Great Britain and the United States.
Ironically, although Austria won the press with its lush Grüner Veltliners of Burgundian style, the country owes its triumphant breakthrough and sustained success in export markets to its fresh, light and lively Grüner Veltliners and, not to be forgotten, its autochthonous red wines, Zweigelt und the Blaufränkisch. Specialties like Riesling from the Danube as well as Sauvignon Blanc und Gelber Muskateller, stemming originally from Styria, have slowly established themselves all across Austria and now reign supreme, particularly on the domes-tic market. Their counterparts in the red wine segment are Sankt Laurent and Pinot Noir. Excellent conditions are to be found for both in the wine country of the Thermenregion, Burgenland and north of the Danube as well, all yielding excellent wine.
Factor 2: Austrian wine as a niche product
In spite of the enormous diversity of grapes, when it comes to exports, Austria is defined principally by its three major grapes: Grüner Veltliner, Zweigelt and Blaufränkisch, which together cover more than half of its vineyards. With an annual production of just over 250m litres, such concentration has proven itself a prudent decision, the more so as the three grapes occupy highly interesting niches in the global wine portfolio.
Owing to its distinct pepperiness, combined with a charming fruit (which, depending on microclimate, soil and the maturity of the grape at the time of the picking, ranges from ap-ple to an opulent exotic fruit), Grüner Veltliner has a one-of-a-kind profile. Its acidity is less pronounced than Riesling; but even picked at full ripeness, Grüner Veltliner nearly always has a propensity to distinct crispness – and crispness is certainly one of the factors that has put Austria’s red wines, based on Zweigelt and Blaufränkisch, a cut above the international standard. Moreover, both grapes bring a decided fruitiness with them, which pairs quite well with current consumer tastes in many countries. Depending on taste, the choice is between the slightly more richly tannic structured Blaufränkisch or the more accessible Zweigelt.
Factor 3: Districtus Austriae Controllatus (DAC) – Commitment to origin
The current discussion about the distinct profile of individual regions is nothing more than the logical result of the rapid enhancement of quality that has occurred in recent years. Technically, Austria’s wines have long |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 3 of 8 |
|
|
been beyond reproach. Even in the basic range, they have always shown pure varietal character. Thus, Austria’s wine trade decided to develop profiles of origin. On 1 March 2003, the first controlled designation entitled Districtus Aus-triae Controllatus Weinviertel, or Weinviertel DAC, broke ground. Target? To improve the image of the Grüner Veltliner typical for the Weinviertel and to better acquaint consumers with its inimitable peppery taste profile. Since then, the volume of Grüner Veltliner sold as Weinviertel DAC has risen year for year, a confirmation for all those who, from the begin-ning, campaigned for marketing the origin. Nonetheless, after the launch of Weinviertel DAC, it took some time before the process gathered steam. Then, over the course of the past two years, other events followed rapidly: Mittelburgenland became the first red wine region to step toward controlled origins with its Blaufränkisch. Moreover, a second quality level was established with the additional designation of “Reserve”.
Meanwhile, the Traisental, which is hardly known outside Austria, and its more renowned northern neighbour, the Kremstal, made the decision to join the race. The Kremstal did so with the most complex structure so far: two grapes, Grüner Veltliner and Riesling, as well as two quality levels, Kremstal DAC und Kremstal DAC Reserve. It is expected that the Kamptal will soon follow with a similar structure.
Whether with or without controlled origins, wines that are typical for a region - and moulded by its soils and microclimate - enjoy widespread appreciation among Austria’s vineyard owners. But terroir cannot be generated in the cellar. A distinct regional character, not limited to the vagaries of climate, can only be based upon vineyard practices that are rooted in nature. Not surprisingly, many of Austria’s leading estates are in the process of converting their operations to organic or even biodynamic farming. The total organically grown vineyard area has grown in the past year by more than 40% to roughly 2,500 hec-tares. Around 320 hectares of these are officially farmed biodynamically.
Of course, not all wineries are on this path, but even those who farm their vineyards “con-ventionally” do so in an environmentally sound, sustainable fashion and are addressing that pivotal question: “How do I ensure that the vineyard’s character is reflected in my wine?”
This sort of production, both natural and artisanal in the best sense, is a vital part of the puz-zle in positioning Austrian wine as a niche product. “Natural instead of commercial, ar-tisanal instead of industrial, family owned and operated companies instead of corporate groups, full of character instead of uniform, based on nature instead of technology.” With this strategy, Austria has secured for itself a piece of the global wine pie. Even the few lar-ger operations like the Winzer Krems or Lenz Moser are, when compared to |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 4 of 8 |
|
|
their interna-tionally brethren, down-to-earth family companies.
Factor 4: Gourmet country Austria
The rapid and, above all, sustained quality growth in the Austrian wine scene has a great deal to do with the characteristics of the country: With a total land mass of only 84,000 square kilometres, or roughly one-fourth the size of Germany, Austria is a small country. No wine growing region is more than two hours from Vienna, the country’s cultural and social centre. Not only does a quarter of the population reside in the capital, but there is a surprisingly colourful media landscape that boasts a plethora of wine and gourmet publica-tions. Even the daily press and television stations devote lots of space to food and wine. There is hardly any other country so orientated towards enjoyment as the Austrians - and their culinary level is remarkably high. It is no coincidence that the revolution in the glass culture at the dining table traces its origins back to Austria. Wine as a means for enjoyment is well anchored within Austrian society. Today it is de rigueur to be wine literate. Semi-nars at the Wine Academy have boomed in recent years.
This environment has enabled young, ambitious winemakers to gain nationwide prominence in only a few years and build a corresponding market for their wines. Their geographical proximity to one another has resulted in an intensive exchange between growers. Such a competitive environment permits no producer to slacken in his efforts, and that lends a peer-less dynamism to Austria’s wine trade. This is highlighted by the astounding volume and diversity of new and state-of-the-art wineries. A veritable feast in wine architecture! The proof? A widely acclaimed exhibition dedicated to the subject has been running in the United States since September of last year.
Factor 5: Export strategy
Despite the stable domestic market, Austria’s wine producers neither want nor can they rely on the loyalty of their compatriots or the numerous holiday guests who contribute to the high total Austrian wine consumption. A healthy export ratio of one third now ensures addi-tional stability to the red-white-red, the colour of Austria’s flag, wine trade.
Even as late as 2003, the situation was hardly satisfactory. Of the exported 85m litres, more than 60m left the country in bulk, mainly to be processed into sparkling wine. Germany (63%) and the Czech Republic (25%) were the main buyers. Italy, too, stocked up on com-modity bulk. Other than that, only Switzerland (1.3% in volume, but 6.2% in value), the United States (0.8% of volume, 5.7% of value) and Poland as yet another buyer of bulk for sparkling wine could have been designated as serious export markets. All other major im-porting countries, like Great Britain, Scandinavia, the Netherlands and Russia, moved Aus-trian wines at best in homeopathic doses. with their export shares being less than 0.1%.
By the end of 2007, exports |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 5 of 8 |
|
|
looked entirely different, as becomes clear when the major mar-kets are portrayed.
Germany: Change of course
Germany was, is and will remain by far the most significant export market for Austrian wines. Here, though, a remarkable change has taken place in recent years. In 2003, the im-port ratio was two-thirds bulk to one-third bottled wine. Today, it is just the opposite. At the same time, the average price of both imported bottled as well as bulk wines has risen no-ticeably. In Bavaria, Grüner Veltliner has soared so high as to become a serious alternative to the Italian Pinot Grigio. In other words, at least in Bavaria, Grüner Veltliner has firmly established itself in the major leagues, indeed it ranks in the top third of the charts. In the wake of Grüner Veltliner, Zweigelt enjoyed similar growth and now hardly trails behind its white counterpart in popularity and prominence. Two further strongholds of Austrian wine lie in Germany’s north: Hamburg and Berlin. There the Grüner Veltliner has gained a firm position on the wine lists of the upmarket restaurants as well as conquering a secure spot on the menus of a young, modern, international gastronomy.
This was an ideal starting point to conquer, on a step by step basis, the rest of the country. The rapidly growing interest of the large food retailers attests to the greatly burnished image of Austrian wine. Both Lenz Moser and Winzer Krems, Austria’s largest players in the Ger-man trade, have reported rising sales, in particular in the premium sector. Friedrich Wim-mer, marketing head for Lenz Moser, is happy about the development: “A large part of last year’s 14% growth is due to increasing demand for our two top lines.” In the specialised trade sector and in gastronomy, Austria is gaining momentum, too: “We started early with Austria and that is now paying off”, is how Rudolf Knickenberg, general manager of the importer Schlumberger, explains his experience. Conversely, Oliver Thieme, managing director of competitor CWD, the specialised importer of the market leader in the mail-order sector, Hawesko, regrets not having stuck with Austria: “Five years ago we made an attempt with a broad product range, but gave up too early. If we had followed through, we would have built strong brands that sell by now.”
“Gastronomy, specialised trade and the upmarket retail food trade remain the most impor-tant partners in the distribution of Austrian wines. It may be observed, though, that even the discount trade is taking Austrian wine seriously and now offers a Grüner Veltliner to the consumer for about €4”, explains Gerhard Elze (ÖWM), betting on continuity. There had been concerns in Austria that the growing popularity of German wines on the domestic market might turn out to be a stumbling block for Austria, but the very opposite is true. “Both styles of wine may be similar, but they are autonomous and complement each |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 6 of 8 |
|
|
other well”, according to Elze. In fact, taste in Germany today goes toward fruit and crispness, so it ends up being more or less a home game for Austria.
Switzerland: Red wines ahead by a nose
As an export market for bottled Austrian wine, Switzerland has long been the uncontested number two after Germany – and since 2004, this market has been booming. Volume and value have nearly doubled in that short time and, since 2000, almost tripled. What distin-guishes Switzerland from all other major export markets is the predominance of red wines, but that is something Markus Nauer from Nauer Weine does not overrate. He is one of the experts for Austrian wines in Switzerland, selling to both private customers and the catering trade: “Basically all wines are sought after – red, white and dessert wine – provided they are of a certain standard. For all practical purposes, you cannot sell a bottle for under 10 Swiss francs, with the largest sales attained in the range from 13 to 18 francs. These are offered by the glass on-trade. And increasingly, consumers are stocking up on high quality products. Most know the Wachau, perhaps Burgenland and possibly Styria. All other regions are un-known, but that doesn’t apply to the wines.”
Around 400 wineries are currently represented by 200 importers. “In Switzerland, we are riding on an enormous wave of sympathy. The Swiss appreciate good wine and they find it in ours”, says Susanne Staggl (ÖWM), quite pleased with the current development.
USA: “Gruner” is much en vogue
There are thousands of glamorous, modern restaurants in New York – and every self-respecting restaurant owner has a formidable selection of wines on offer. Among them, ten or twelve are served by the glass. These are the wines that sell particularly well, and among their number you will find with conspicuous frequency a Grüner Veltliner. “For the past of couple years, the United States has been nothing less than a fairy tale success story. Last year we reached six digit volumes in exports to the United States for the first time, and it appears that another jump in volume is still in the cards for this year”, according to Ludwig Holzer, who adds: “Further, we are moving at a different price level there than in Europe.”
Willi Klinger, the head of ÖWM, who is personally overseeing the American market, views that as a confirmation that the chosen strategy was the right one: “In the beginning, we were consciously offering high-priced products; in relation to volume, it was pure homeopathy for ten years. Now the American market is ready for wines with broader appeal, like a Hugo or Lois.” To a certain degree, the whole thing runs along the line of ‘Grüner Veltliner, the better Pinot Grigio’, as one hears from importers. Naturally the average price is incremen-tally declining as the market grows, but |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 7 of 8 |
|
|
we’re still moving on quite a good level.”
The numbers are impressive. Since 2000, the volume exported to the United States has quintupled and value quadrupled. BesidesNew York, where the “Gruner” has near cult status, Austria has made breakthroughs in other wine strongholds like Chicago, Boston, Florida and California. And not just there: “In Washington, too, in Oregon and even in Ten-nessee, the demand for wine from Austria is on the rise”, reports Daniel Hubbard from Do-maine Select Wine Estate. His company has been importing Austrian wines since 2003. “With the 2005 vintage, business really got going and, for the first time, we sold faster than expected. In 2006 there was another fantastic increase. Right now, Austria is succeeding on two levels. First, we have affordable, modern, brand-like wines sold for $10 that are capable of introducing Austrian wines to a new audience. Secondly, we have wines for the upmarket sector, which may very well cost $20 or even $30, but are persuasive by their excellent cost-performance ratio.”
The Netherlands
“The Netherlands is slowly learning that Austria is not just mountains and snow. The enthu-siasm among wine lovers is huge”, says Susanne Staggl. Since 2004 exports have virtually exploded. Since then, both volume and value have grown sevenfold. A major share of this can be attributed Regina Meij and her company Imperial. “I started with Austria 13 years ago. That was initially ground breaking labour, but I was persuading customers with quality. Although that’s the only way to establish a durable image, it requires time. I chose the path via upmarket gastronomy, a top-down approach, so to speak. The people who tasted the wines are sticking with them. The wines are not inexpensive, but for that type of premium quality, they still offer value for money. In the mean time, Austria has arrived in the middle market, too. Owing to that fact, volumes are soaring. Now the specialised trade and retail food trade are becoming interested. Importers with an international product range are adopt-ing Austrian wines as well. If I say today that I import wine from Austria, their response is: ‘Ah, yes, Grüner Veltliner.’ This kind of wine is now quite hot in the catering trade.”
Emerging Markets
The four largest export markets are not alone in providing dynamism to the export balance. The “future markets”, too, are bringing joy to the Austrians.
The combined Scandinavian markets now move on par with the Netherlands. “When speak-ing of the growth of Austrian wine in Norway, I believe ‘booming’ is the right word to use,” says Arne Ronold, journalist and MW, describing the rapid rise of the wines with the red-white-red seal in Norway. “In 1999 total sales of Austrian wines through Vinmonopolet amounted to only 7,000 litres. In 2007 that figure rose to 288,000 litres, more |
|
|
|
|
|
|
|
|
Sponsored Profiles |
|
|
Page 8 of 8 |
|
|
than 40 times more that eight years ago! Of this, 89% is white wine, dominated by Grüner Veltliner and Riesling. Schilcher takes the remaining 11%. While sales of Austrian red wines are insig-nificant, sales of white wines through the monopoly rose by 124% from 2006 to 2007 - and this trend is continuing into 2008. Among the restaurants, many of the finest ones, including Bagatelle, Feinschmecker and Statholdgaarden, are listing premium white wines from Aus-tria and I believe they are reasonably successful”.
The dynamism in Sweden and Denmark literally took the cake last year, with a jump in im-port volumes of 134%. In Denmark, even the retail food trade has adopted a growing fond-ness for Austrian wine. That, as a rule, is an unmistakable signal that a breakthrough is on the horizon.
For years, Great Britain ignored the overtures of Grüner Veltliner and company. In the past two, though, there have been clear signals this “resistance” is fading. Distribution in the upper segment of the catering trade is on a spree and the number of listings in the off-trade is rising. “Very slowly, consumers in Great Britain are climbing on the bandwagon, too, succumbing to a certain Austrian euphoria, which had already existed in the press for years”, says Susanne Staggl (ÖWM), describing the positive change in the market.
If you keep your ears open on the Austrian slopes, you quickly realize that Russia is a genu-ine future market for Austrian wines. “Tourism, especially in the winter, shapes an aware-ness of wine from Austria”, ÖWM associate Christian Dworan confirms. In Austria’s top hotels, Russian guests are learning that there are premium Austrian wines. “The demand for prestige products in Russia is great. The wine market there, though, is still fiercely con-tested”, according to Dworan. Exports to Russia hardly reflect the true conditions of the market, as grey market imports via third countries are not registered.
Besides via Germany and the Netherlands, there ought to be the occasional litre of Austrian wine finding its way to Moscow on the parallel market via Poland. Incredible as it sounds, export volumes to Poland have risen sevenfold from 2006 to 2007. Like elsewhere, a leisure class has been forming in Polish cities - and they are stalwart wine aficionados, causing the average price of bottled Austrian imports, red and white alike, to jump from €2.87 to €4.48 last year. Bulk red wines also had their share in the exponential market growth, with their volume shooting from zero to 350,000 litres, at a remarkable average price of just under €2.80 per litre.
That said, Austria has not managed to make a breakthrough everywhere. At least not yet. Canada remains a headache. “We simply haven’t made any real progress there”, report ÖWM head Willi Klinger and Ludwig Holzer, export manager with Winzer Krems, in simi-lar tones: “Although we've been active in Canada for thirty years, growth there has been stagnant over the last ten years. Compared to the United States, it’s a difference of day and night.”
Asia, too, currently takes little notice of Austrian wine. “There are auspicious beginnings and a number of potential buyers”, says Klinger, who senses an opportunity he would like to seize upon with the tried and tested strategy: “We will go into the catering trade there with our premium wines and work our way down.” Along the lines of: “What has worked in the United States, Switzerland and the Netherlands will not go wrong in Asia.” If it ain’t broke, don’t fix it, appears to be a safe assumption.
|
|
|
|
|
|
|
|
|
