When it comes to wine consumption, Australia is number one in the English-speaking world at 24.93 L a head. Supplying Australians with their daily tipple are a host of supermarket chains and independents led by Woolworths and Coles. Together, these two represent a staggering 70% of all domestic wine sales, both on and off premise (that is, restaurants versus retail shops).
Woolworths (under Dan Murphy’s, BWS and Woolworths Liquor) is the bigger of the two with approximately 1,250 stores, and is now regarded as a fully integrated wine player, with vineyards and wineries, along with its own bottling, packaging and distribution network. Coles (under Vintage Cellars, Liquorland, First Choice) has around 780 stores.
Aldi and Costco, which arrived in Australia in 2001 and 2009, respectively, are also developing sizeable chunks of the Australian retail wine business. Bringing up the rear is a group of well-credentialed independent retailers offering shelter to niche winemakers not interested in massive exposure – and potentially massive discounting.
And then there are the importers. So, so many of them.
The number reflects the absolute boom in imports over the last decade. Last year we saw yet another significant jump in imports with an increase of 4.2% to 67m L at a value of A$470.7m ($441.4m). New Zealand is by far and away the biggest supplier, followed by France, and Italy, Spain and Germany. Champagne, in particular, is breaking annual sales records. In the last three years Australia has moved up from eighth position to become the sixth-largest market for Champagne in the world. We might live at the end of the world, but our island has become one of the most open and sophisticated wine markets in the world.
Andrew Caillard MW, Woolworths Liquor Group
The accent is proper English, the attitude, however, is all Australian. Andrew Caillard has a million opinions, many of them about wine. If his title of Fine Wine Principal sounds a little obtuse he best explains his role as “advance guard”, scouting out producers around the world that might suit his employer, Woolworths. The company, with liquor sales of A$7.5bn annually, is one of the Top 10 liquor businesses in the world, and one of the few supermarket powers to own its own vineyards and wineries – indeed, every aspect of production and distribution. “I deal with everything in wine, from one Euro to the most expensive, and I’m in the field a lot, which is the best place to be,” he says just one day before heading off to Düsseldorf and Bordeaux for the en primeur tastings. Within Woolworths he is called “the company palate”, a reference presumably to his MW status (he was awarded the MW’s Bollinger Medal for excellence in tasting in 1993) as well as being a former lynchpin behind the success of Langton’s Wine Auctions (bought by Woolworths in 2009) and its famous Classification of Australian Wines. He smells out trends from a distance.
In Spain some years back he was enchanted by the wine of Marques de Murrieta in Rioja and snapped it up quick smart.
What advice would you give a wine producer looking to enter the Australian wine market?
“A lot of producers do not understand Australian price points and the Bordelais are the worst. Due to our taxation system, a wine can end up $200.00 when it should be $100.00. The price point is so important in Australia. And the other thing is [wine score] points. If you have a commercial wine and it doesn’t stand for something or hasn’t achieved anything of any note or doesn’t have a story of any note then it will probably fail in the Australian market. Scores alone won’t sell. Scores of 87 certainly don’t offer anything.”
What’s the big wine trend of 2014 in Australia?
“We seem to be really delayed on the organic and biodynamic side of things. I know it’s a bit of a catch phrase among (Australian) wine writers, but the market hasn’t followed with the same enthusiasm. Over the next five or six years I think fine wine in Australia will be hinged upon that idea. That leads to the natural wine movement and here I struggle. I think it’s a foil to the national wine conversation but I don’t think it will catch on, basically because all of the wines are so horrid.”
Tim Evans, Negociants Australia
In Tim Evans we see yet another example of the loyalty inspired by the Hill-Smith family, of Yalumba fame. Evans was born in the Eden Valley, not to wine growers but graziers, and worked his first vintage in 1993 at Yalumba. After graduating from Roseworthy College wine marketing in 1996 he went overseas, but returned in 1997 as a representative for S. Smith and Sons. “The company has a lovely family culture and there’s time to learn from the ground up,” he says. Today, he is national imports manager for Negociants,the importing arm of the Hill-Smith family that Robert Hill-Smith and Brenton Fry started back in 1984. The Negociants portfolio is filled with more than 100 of the most desirable wine names in the business including Antinori, Vega Sicilia, Bonneau du Martray and Château Cheval-Blanc. “We are privileged to have the portfolio we do.” Evans oversees more than 35 area managers who work nationally, and tries to visit European wine regions every 18 months. He visits New Zealand, by far the biggest exporter of wine into Australia, every year. And there are always the enquiries. “We probably get one to two queries a day for distribution.”
Along with many other wine buyers he is aware of the delicate price points that can make or break a brand coming into Australia with its endless wine taxes and duties, with Australians some of the the most heavily taxed wine drinkers in the world. And then there is the well-established local wine industry for international wineries to consider. “We are a very, very strong wine-producing market, which can be good and bad for importers.”
What advice would you give a wine producer looking to enter the Australian wine market?
“You have to visit the market. I know it’s a long way for Europeans to come but you need to get here and get an understanding of what the market is about. To have that insight and work out your expectations for the market will help, I’m sure. You need to work out where to place your wines. It’s about long-term vision and placement. Some producers will want volume and if they want volume they’ll go down the Coles and Woolworths road.”
What’s the big wine trend of 2014 in Australia?
“There’s a lot of interest in grape varieties from a traditional region. It’s about having a wine of terroir and place. Pinot Grigio is still gaining traction. We’ve certainly seen a nice upward trend in Pinot Grigio from Italy, mainly, and that’s across a couple of price points.
Pinot Noir will maintain strong interest. Grüner Veltliner has some movement. It’s certainly of great interest to sommeliers and wine writers at the moment, with some great examples coming out of Austria in particular.”
Matt Skinner, Coles Liquor Group
We first got to know the eternally upbeat Matt Skinner as the laid-back Aussie wine guy for Jamie Oliver’s Fifteen restaurants and accompanying television series, but before London, and before television, he was working in wine shops in Melbourne, his home town, and soaking up knowledge. It was solid grounding that holds him in good stead today back in Melbourne in his role as wine ambassador-expert for the Coles Liquor Group, where his role takes in everything from upfront wine guy in television and newspaper advertisements, to the tasting room picking out new products as part of the Coles’ 10-strong tasting team. “From day one when I started at Coles I brought my own system of tasting and a lot of it has been adopted by the buyers,” he says. Every wine is presented in blind tastings, scores are given, and when the wines are identified they have to make their way through to the shop shelf on their own merit.
Like Andrew Caillard at rival Woolworths, Skinner acts as forward scout travelling the world and alerting the buying team of wines suitable for the tasting bench. Contrary to popular opinion, not every wine has to be made in big volumes. “The model has changed,” he says. “It is far more flexible, and small purchases (as low as 50 cases) can be targeted to sell in individual shops or areas.”
What advice would you give a wine producer looking to enter the Australian wine market?
“You need to understand the market. Do your homework. Be prepared to work hard. To me, the best producers are always on the road, working tirelessly and getting around to their customers. Don’t be unrealistic. Australia is not going to be the quick road to a small fortune. It’s tough times in Australian wine right now.”
What’s the big wine trend of 2014 in Australia?
“I am loving seeing existing producers pushing the envelope with varieties that have perhaps fallen out of favour. We’re seeing a lot of interesting red blends coming through. They’re exciting and they will get a lot of traction in the on-trade and sommeliers will get behind them. In the off-trade you have to do a lot more work to educate team members and they, in turn, have to educate consumers. You’ve got to do a lot of education to get people
enthusiastic. As for other trends, I can’t remember seeing as much good Cabernet Sauvignon coming through at really good prices. I am excited by it.”
Patrick Walsh, Cellarhand
When German winemaker Ernie Loosen was visiting Melbourne in February, he stayed in the spare bedroom at the house of Patrick Walsh and his wife. It wasn’t all that unusual. Walsh’s importing business is very much relationship-based. The following month he took his sales team to Tasmania to pick grapes at another friend’s – who happens to be a client – Steve Lubiana. “I tend to work with people as opposed to brands. I hate the word ‘brand’. These are primary producers and they share in common the pursuit of making the best wine they can.”
Patrick Walsh started life as a musician (that’s another story) who found his way into wine as a sommelier and into life as an importer when he realised that some of the best names from countries like Germany and Austria weren’t being seen in Australia. In 1999 he won the inaugural Frankland Estate Riesling scholarship to Europe (Frankland Estate in WA is now an old friend and agency), came home and borrowed A$60,000 from his father-in-law and the rest is Cellarhand history. He is a patient man, willing to wait for the right producer to become available.
What advice would you give a wine producer looking to enter the Australian wine market?
“The Australian wine market is very open to any grape variety or region, and people are willing to give it a try. They may never have heard of it but if it tastes good a sommelier will put in on (the wine list) by the glass and see what people think. One issue we face a lot of the time is in terms of the price point that a producer might sell their wines for in Europe. They don’t realise what their ex-cellar price equates to in our market with our taxes: 5% duty, 29% WET (Wine Equalisation Tax), 10% GST, and importer’s and retailer’s margins.”
What’s the big wine trend of 2014 in Australia?
“I think the trend to natural wines has probably burst its bubble. The big thing that people are into is wines of provenance. It’s single vineyard, it’s indigenous varieties in whatever region a wine comes from. It’s wines that show personality, character and soul of where they are from.”
Robert Walters, Bibendum Wine Co.
A few weeks back Rob Walters took a chance on a bunch of wines from Tenerife in the Canary Islands.
The producer, Suertes del Marqués was being wooed by two other Australian wine importers and anxious not to lose out, Walters broke one of his rules of engagement.
“Normally I would visit first but there was no time.” He tasted the wines and sealed the deal.
“There’s been an explosion of quality small producers,” he says. “But there has also been an explosion of importers.”
Walters, a veteran of 25 years in the wine game, has worked in retail, helped pioneer on-line wine through Wine Planet in 1989, and since 1999 has been the man behind Bibendum Wine Co. based in Melbourne. His specialty is top-end wine producers from Europe, Australia and New Zealand. He began with 12 core agencies, inherited from the company he bought in 1999, including J.J. Prüm. Didier Dagueneau and Graillot, and has now grown the company to include some 130 agencies. He is known for his plain speaking and eloquent writing.
What advice would you give a wine producer looking to enter the Australian wine market?
“That’s easy. Make better wine. The good news for any producer, especially if they are working in a place that has historically been able to make excellent wine, is that if you make outstanding wine that stacks up, then, demand will come.
What’s the big wine trend of 2014 in Australia?
“We have seen a move towards more small, artisanal, high quality producers who make fabulous wines. That’s going to continue. If we are talking about a region or a country, then I think Spain is going gangbusters. The other trend we’re seeing, for good or bad, is the obsession with on-premise [restaurant] for good wine from obscure wine regions.”
Scott Wasley, The Spanish Acquisition
“My intention has always been to import the classic wines that define Spain in the twenty-first century.” This is importer Scott Wasley’s mantra, although today he also includes the wines of Portugal. He is an Iberian specialist.
Back in the ‘90s, Wasley saw the appeal of Spanish wines in the Australian market when few others did. In his first shipment he represented six producers. Today he has 60 names on his books. “Rather than starting with hero wines, I started with everyday drinking that everyone could afford. From Day One I didn’t want to do everything at once. I am only now rolling out Madeira in my fourteenth year!”
A wine educator of endearing patience, Wasley’s approach to spreading the word about his wines with sommeliers and others is largely about sitting down with a bottle and talking. “Access equals knowledge and I open everything as often as I can.”
What advice would you give a wine producer looking to enter the Australian wine market?
“For me, you just have to be really, really wonderful at what you do. Some 90% of wine producers are relatively generic wine producers. If you are not in the top 10% of your region then you shouldn’t have very high expectations of making it in the Australian market.”
What’s the big wine trend of 2014 in Australia?
“Hopefully the trend will not be clogging up your wine lists with so-called ‘natural wines’ that are best fit to clean people’s drains with. Spanish wines are still under-done and are far from over-represented.”
Price points
“The majority of wine we purchase is between €2.00 and €6.00, which converts to retail price points of under A$9.95, under A$14.95, under A$19.95, under A$24.95 and under A$29.95. We do buy almost every genre you can think of. Champagne has price points of A$29.95, A$39.95, A$49.95 etc. This is a highly competitive market with huge pressure on price points and margin. Woolworths has 55% of the retail Champagne market in Australia. But purchase prices are €12.50-plus. We also buy Burgundy and Bordeaux, etc, so prices move up the scale considerably. The main action, though, is commercial stuff, as you would expect.”
Andrew Caillard MW, Woolworths Liquor Group
