What is Australian wine? For the average American consumer—and much of the trade—it’s not a question that inspires an in-depth response. “There’s a conceptual issue for many in terms of what wine from Australia really is,” says Gordon Little, co-founder of New York-based Australian wine importer Little Peacock. “I’d say we’ve gotten over the idea that Australia is just an animal on a bottle, or all about Shiraz. But getting people to picture Australia as a bigger story, a bigger country with a variety of specialties—that’s the challenge at hand.”
Little, like others who are dedicated to elevating Australian wine’s image in the U.S., has a long road ahead. Global demand for Australian wine has fallen substantially since exports peaked in 2007; the 2008 financial crisis caused the Australian dollar to plummet, forcing many boutique wineries out of the U.S. market. And while volume has since recovered somewhat, Australian wine exports were down 11% to 17.7 million cases in the fiscal year ended June 2018, according to trade group Wine Australia, with value slipping by 8.6% to A$424 million ($306.5 million).
Despite those declines, there are signs of an imminent resurgence. In the calendar year ended November 4, 2018, Australia posted gains at the luxury ($20-$25 a 750-ml.) and super-luxury ($25-and-above) tiers, according to IRI data, growing 16.1% and 15.4% in the U.S., respectively. The number of Australian wineries present in the U.S. has also risen in recent years, pushing to nearly 300 in 2018 after sinking to 234 just two years prior. Importers and marketers are also shifting focus to highlight Australia’s diverse growing regions and the eclectic mix of grapes on offer.
Changes In Shiraz
At the height of Australia’s popularity in the U.S.—which spanned a 16-year period that started in 1991 and ended in 2007—Shiraz was its calling card, particularly high-abv expressions of the grape that burst with bold, ripe flavors. Eventually, however, the average American palate grew fatigued by these fruit bombs, and Shiraz came crashing down. “Shiraz was at the top of the heap, and then it started to experience some challenges,” says Aaron Ridgway, head of marketing for the Americas at Wine Australia. “Namely, consumers came to think of all Shiraz labels as tasting the same, costing the same, or coming from the same place.”
More than a decade later, Shiraz has yet to regain its footing in the U.S. market. “Shiraz is flat to slightly declining for a lot of our Australian brands,” says Rob Buono, president of Napa Valley-based importer Old Bridge Cellars. “Part of it revolves around the fact that sometimes varietals can be fashionable—Merlot, for example, was out of style in the U.S. for many years after a period of ultra-popularity. But grapes come around in cycles, so we’re ready and waiting for the next Shiraz phase to hit.” Across its extensive Australian portfolio, Old Bridge offers a number of upscale, Shiraz-dominated estates, among them John Duval and d’Arenberg, which Buono notes he’s had to advocate for more ardently in the U.S. market in recent years.
At California importer Vine Street Imports, northeast regional sales manager Aaron Meeker has also seen rich, juicy Shiraz stall across the U.S. “We’re selling less of the classic Barossa Valley or McLaren Vale Shiraz,” he says. “Even producers who once made their living off those expressions have had to dial them back in terms of boldness to better suit today’s market.”
While classically popular styles of Shiraz are faltering, there’s now noticeable success to be had in cultivating elegant, cool-climate iterations of the grape. Such lighter, spicier expressions of Shiraz are performing well for Vine Street, according to Meeker, especially those that hail from regions like Adelaide Hills in South Australia and Yarra Valley in Victoria. “Shiraz is nowhere near where it was eight years ago, but it’s getting easier to talk about the varietal, thanks to the styles that are coming out of cooler regions and are just now getting popular,” he says. Vine Street imports more than 30 Australian wineries, the majority of which are boutique, limited-production estates.
Other importers have likewise taken note of the move toward a more modern Shiraz profile. Kathy Marlin, senior vice president and general manager of The Winebow Group subsidiary Negociants USA, acknowledges that the future potential for Shiraz lies in this new direction. “If someone were to look at the numbers on a page, they might be pretty disappointed with the results Shiraz is posting,” she says. “That being said, there’s definitely some green shoots in the category, and a number of brands—in both warmer and cooler climate regions—are more stylistically modern than people tend to expect from Australian Shiraz. It’s these labels that are reinvigorating the category.” Importing around 20 Australian labels, as well as brands from New Zealand and South Africa, Negociants USA came under The Winebow Group umbrella in January 2018.
In New South Wales sub-region Hunter Valley, Hope Estate proprietor and winemaker Michael Hope has long produced stylistically unique versions of Shiraz. “Our biggest seller among U.S. consumers is our Western Australian Shiraz, The Ripper, which I describe as elegantly big,” Hope says. “It’s a pleasantly fruity style, but by no means a jammy, alcoholic fruit bomb like many from the Barossa are.” Around 8,000 cases of The Ripper ($18 a 750-ml.)—the only red wine in the Hope Estate portfolio grown at the winery’s Knob Hill vineyard in the Geographe region of Western Australia—are available in the U.S., imported by Illinois importer and marketer Winesellers Ltd.
Elsewhere in its portfolio, Hope Estate offers Basalt Block Estate Shiraz ($14 a 750-ml.), a Hunter Valley expression grown nearly 3,000 miles from where The Ripper is sourced. “The Hunter Valley is unique for Shiraz in that it offers more earthy, savory characters, which are atypical to what people normally think of when it comes to Australian Shiraz,” Hope says. He adds that while The Ripper is more of an off-premise success, Basalt Block does particularly well as a by-the-glass offering due to its light, easy-drinking elegance. With both wines, Hope is looking to illustrate the variations of Shiraz that exist all throughout Australia.
Diversity On Display
The movement toward highlighting alternative styles of Shiraz has corresponded with a newfound emphasis on Australia’s diverse winemaking regions. With a land mass of 2.97 million square miles, Australia has six major winemaking zones, which together contain more than 60 designated wine regions and total over 395,000 acres. “Australia has a multitude of regions and varieties that people have yet to fully understand,” says Wine Australia’s Ridgway. “There’s a lot on offer that goes beyond Shiraz; we’re seeing growing demand for Chardonnay, Riesling, Sauvignon Blanc, and even more obscure varietals like Vermentino and Grenache.”
In an effort to showcase Australia’s wealth of winemaking regions, Los Angeles-based, boutique-focused importer Hudson Wine Brokers employs a straightforward structure to its portfolio. “We carefully select the wines that are in our lineup, and our whole approach revolves around featuring one wine per region, so as to specifically highlight Australia’s diverse territories,” says director Henry Hudson. “There’s a regionality to the country that people have yet to realize—it shouldn’t be pigeonholed to just one area, and I think that idea is starting to gain traction.” Among Hudson Wine Brokers’ imported estates are Cabernet Sauvignon-centric Balnaves ($24-$110 a 750-ml.), located in Coonawarra; Shiraz-dominant producer McPherson Wine Co. ($15-$20), out of Central Victoria; and Voyager Estate ($24-$70), which produces Chardonnay and Bordeaux-style blends in Margaret River.
Aside from highlighting regionality, Hudson is also keen on illustrating Australia’s prowess with Italian varietals like Vermentino, pointing to a specific estate in South Australia. “In the past six months, we’ve had great success with Delinquente, a winery in the Riverland,” he says. “The young winemaker there, Con-Greg Grigoriou, is working with natural ‘alternate varietals,’ as we call them, that mainly hail from Southern Italy, as the Riverland’s climate mimics that of Sicily.” Delinquente’s portfolio includes Screaming Betty ($25 a 750-ml.), a 100% Vermentino; Pretty Boy, a 100% Nero d’Avola Rosato ($25); and The Bullet Dodger ($25), a 100% Montelpulciano.
International varietals are also shining at Little Peacock. “We’re seeing a lot of great wines coming out of warmer climates, such as expressions of Trousseau, Vermentino, and old vine Grenache,” Little says. “These wines, which are oftentimes driving business for us in terms of volume, are not the styles that would have been popular from Australia ten years ago; they’re lighter, spicier, and lower in alcohol.” He identifies such estates as Happs’ in Margaret River, which offers the Nebbiolo-based blend East of Alice ($20 a 750-ml.), and Ben Haines in Central Victoria, which features the B-Minor Roussanne-Marsanne ($24), as strong performers.
Little adds that sparkling wines are also prompting growth, particularly those sourced from Tasmania. “We have two Tasmanian sparkling wines from Kreglinger Wine Estates’ Ninth Island range: a non-vintage white sparkler and a non-vintage rosé sparkler,” he says. “So far, they’re quite popular, and demand far outweighs the supply.” Given that Tasmania’s climate is cooler than that of France’s Champagne region, Little notes that the region is well-suited to high-end bubblies; he expects they’ll continue to gain ground in the future, albeit from a limited base.
More commonplace varietals such as Pinot Noir, Chardonnay, and Cabernet Sauvignon are also successfully bringing the spotlight onto Australia. Since launching in 2013, Treasury Wine Estates’ 19 Crimes—whose portfolio features Hard Chard ($13 a 750-ml.), Cabernet Sauvignon ($15), and Red Blend ($13) variants, among others—has taken the Australian wine segment by storm: In the 52 weeks ending October 6, 2018, the label depleted nearly 850,000 cases in Nielsen channels, up from just 426,000 cases the year before. Part of the brand’s growth has come from significant investments in the digital sphere. Treasury launched a Living Wine Labels app for 19 Crimes in July 2017, on which consumers can access augmented reality content that tells the stories of the convicts-turned-Australian colonists depicted on its labels. “The interactive label art experience and the virtual reality component, combined with the price point, have made this such a standout wine,” says Treasury’s global CMO Michelle Terry.
The label’s ability to transcend the overall category’s current slump is akin to that of luxury portfoliomate Penfolds, which offers an array of red wines that are buoyed by strong, recognizable branding. Though Penfolds declined by 26.7% last year to 17,800 cases in the U.S., the label is set to roll out a number of new initiatives for its portfolio, including the addition of Napa Valley-sourced wines, which are slated to hit the market before 2022. Treasury also imports Lindemans, the No.-2 Australian brand in the U.S. with volume of 1.33 million cases.
Communicating To Consumers
While efforts are being made by importers and winemakers alike to revitalize Australia’s image in the U.S., there’s a lingering stagnation for the category at the retail end. “Australia is stale for us; they were a one-trick pony for a while with Shiraz, and that image still stands,” says Mick Ter Haar, beverage director at Chicago retailer Schaefer’s Wine, Food & Spirits. “It’ll take time for us to build outside of that varietal, though we’re seeing Cabernet Sauvignon and red blends like 19 Crimes rising in popularity.” Ter Haar notes that as of now, Schaefer’s currently adds only two to three new Australian labels each year. In the future, he’d like to see Australia promote its wines more aggressively, by either providing more incentives to retailers or bringing more winemakers stateside for meet-and-greets with consumers.
At Wine Australia, Ridgway is actively working to do just that. “Last year was particularly exciting for us because we started to bring in some consumer-facing programming,” he says, pointing to a week-long event in New York City that took place in September, wherein restaurants and wine bars highlighted Australian wines, offered Australia-focused tasting menus, and gave free pours of various Australian labels. Across the country in California, Wine Australia hosted “Australia Decanted,” a five-day event that brought over a hundred members of the trade together with 13 luxury winemakers from Australia, including John Duval, Bruce Tyrrell of Tyrrell’s Wines, and Vasse Felix of the eponymous Margaret River winery.
Ridgway is also eagerly anticipating a major new campaign from Wine Australia, which will debut later this year. “We have a commercial program coming up in September 2019 called Aussie Wine Month,” he says. “Australia Decanted will be included in that moving forward, and we’re going to have a national program where 100 winemakers will come to the U.S. and we’ll hit the road, covering New York, Miami, Dallas, Chicago, Los Angeles, and San Francisco.” During Aussie Wine Month, trade events will take place during the day, supplemented by consumer events at night.
Many Australian winemakers are pleased with the results they’ve seen from these campaigns. “Wine Australia has taken a different approach in recent years, focusing more on educating people about the diversity of Australian wines, and that’s brought more wineries into the mix,” says Hope of Hope Estate. “It’s now more in line with what American winemakers do—they’re not going out and promoting only California; rather, they focus on Napa Valley, or Oregon’s Willamette Valley, and that’s what we need to emulate.”
Similar strategies apply for Deutsch Family Wine & Spirits, which imports such Australian labels as the value-priced Yellow Tail—the No.-1 brand by volume in the U.S. at 4.7 million cases in 2018, according to Nielsen—and the luxury, Barossa-based Peter Lehmann. The company looks at how other top winemaking regions have marketed themselves in promoting its own Australian entries. “Most Americans aren’t aware of specific Australian wine regions, and if they know one it’s likely Barossa,” says Deutsch Family president Tom Steffanci. “We feel there’s an opportunity to educate consumers on more wine regions, and to do so by leveraging ones they know from other areas of the world—for example, saying that Cabernet Sauvignon is to Napa Valley as Shiraz is to the Barossa Valley.”
For his part, Little of Little Peacock believes that emphasizing Australia’s diverse and varied strengths is key to moving the country past its one-note image of recent history. “What’s the price point of Australian wine—$20-$35 a bottle?” he asks. “Is it Grenache from McLaren Vale? Is it cool-climate Shiraz from Yarra Valley? Is it Pinot Noir from Adelaide Hills? The truth of the matter is that Australian wine encompasses all of these things, and more, and that’s the message worth pushing.”