Austrian wine is in an unusual position. The category is not entirely mainstream, nor is it so obscure that its appeal is limited to connoisseurs. It’s small, but consistently popular. This unique positioning results from three factors: A 1980s-era scandal that pushed most producers to modernize and premiumize significantly, an early 2000s boom in Grüner Veltliner, and an impressive overall balance of quality and value.
In 2015, Austria shipped 266,000 cases of wine to the United States, according to Impact Databank. Volume was up 17.9 percent, with value flat. Austrian winemakers have been premiumizing for years, with bulk wine steadily declining and total value up on average 48 percent a year since 2010. That quality positioning arose from the ashes of a 1980s scandal in which low-end producers adulterated their wines with a toxic antifreeze ingredient. The fallout was disastrous: From 1984 to 1986, Austrian wine exports plummeted by 90 percent, and they didn’t recover until the early 2000s. The scandal led to a permanent shift away from low-end wine and toward the premium end—primarily dry white wines. Today, Austrian wine exports by value are nearly four times higher than before the scandal.
Most Austrian wine exports are produced by relatively small, family-owned wineries that usually send no more than a few thousand cases to the U.S. market. There’s no dominant Austrian brand. The category’s largest player—Skurnik Wines’ Terry Theise Estate Selections—is a collection of over 20 estates and wineries from around Austria rather than a single label. “The scandal was the best thing that ever happened to Austrian wine,” says founder Terry Theise. “It was an eruption that leveled the landscape and allowed a new culture to emerge, which is a very rare thing in the Old World.” While the issue is far in the past, the impact on quality resonates to this day.
Grüner’s Glory Years
Today, Austria’s signature grape is Grüner Veltliner, which came to prominence in the early 2000s. Aldo Sohm, sommelier and wine director at Le Bernardin and Aldo Sohm Wine Bar in New York City, says the Grüner Veltliner boom catapulted Austria and the varietal to much wider recognition. “Fifteen years ago, Grüner was a hip new trend,” says the Austrian-born sommelier. “It established itself, went into a little dip and then came back up again.” Theise agrees. “The next generation rebelled against Grüner Veltliner because it was only seen as being trendy,” he says. “I had the difficult marketing task of saying that Grüner is a classic grape variety that belongs in the pantheon, whether it’s trendy or not.”
The Grüner Veltliner boom introduced Austrian wine to a more mainstream audience and firmly established the varietal as Austria’s signature grape. “It used to be that only super-educated wine geeks who would come in and ask for a Grüner Veltliner,” says Phil Bernstein, wine buyer at Addy Bassin’s MacArthur Beverages in Washington, D.C. “Now, average wine consumers think of Grüner Veltliner when they think of Austrian wine—and rightfully so. Today most people know it as a good white wine.” Grüner is Austria’s most-planted grape and represents around a third of the country’s white wine plantings, according to the Austrian Wine Marketing Board. “There’s a real acceptance amongst consumers that Grüner is the Austrian grape,” says González Byass USA national fine wine manager Andrew Sinclair, comparing it to Malbec in Argentina. The González Byass Austrian wine portfolio includes Wachau-based Domäne Wachau, Styria-based Walter Skoff and Burgenland-based Zantho.
One result of the 1980s shakeout is that Austrian wine became relatively expensive. “The entry-level Grüner from Domäne Wachau is $16.99, so they’re not cheap wines,” Sinclair says, noting that the wines do best in high-end retailers. Austrian wine prices range from around $15 to $100, with most sales in the $15-to-$25 range. Several retailers note that the wines overdeliver in value and quality. “They’re very accessible and easy to drink,” Bernstein of Addy Bassin’s says. “It’s not hard to get somebody who drinks New Zealand Sauvignon Blanc or Albariño to try a Grüner Veltliner.” Duncan McRoberts, lead sales associate at Le Dû’s Wines in New York City, sees similar trends. “Basic Grüner is an easy sell,” he says. “It’s a natural alternative to Pinot Grigio and Sauvignon Blanc.”
Higher-end wines are a hand-sell affair, of course. “Selling at the high end is trickier, but you can get top-shelf wines at prices that are approachable for many people, and the wines age extremely well,” McRoberts says. Bernstein of Addy Bassin’s agrees, noting that the wines lack the cachet of high-end French wine, but offer better value. “People wouldn’t normally try a $40 Grüner Veltliner off the shelf, but they would pay more for a white Burgundy without batting an eye,” he says, while adding that “blue-chip Austrian wines” like Weingut Prager, Franz Hirtzberger and F.X. Pichler do have a reliable audience. “It’s still a relatively small niche collector’s market,” Bernstein notes. “I sell through what I have, but I don’t buy a lot.”
Retailing Riesling
While Austria produces highly acclaimed Riesling, the varietal has a marketing challenge. “Nobody thinks of Grüner as being fruity or sweet,” says Lance Montalto, senior executive wine specialist and buyer at Wally’s Wine & Spirits in Los Angeles. “But as soon as you say the word Riesling, it’s like rosé a decade ago—people think it’s all sweet wine.” Sohm of Le Bernardin offers a simple rubric for differentiating Austrian and German Riesling expressions. “Like our sense of humor, Austrian Riesling is always dry,” he says.
Austrian Riesling tends to be more expensive than Grüner, which represents another barrier. “A decent Austrian Riesling is usually over $25,” Bernstein of Addy Bassin’s says. “They’re very niche, specialty items, but they’re among the greatest Rieslings in the world.” Lower-priced Rieslings struggle compared to Grüner Veltliner, but the two varietals sell similarly at the high-end. Addy Bassin’s stocks about 70 Austrian wines, led by Schloss Gobelsburg Gobelsburger Grüner Veltliner ($14.99 a 750-ml. bottle), Bründlmayer Kamptaler Terrassen Riesling ($21.99) and Weingut Liegenfeld Grüner Veltliner By Huber ($12.99 a 1-liter bottle).
Most Austrian producers agree that the best Riesling expressions exceed Grüner Veltliner. “Our top vineyards are Riesling,” says Nikki Saahs, winemaker at the Wachau-based producer Nikolaihof. He admits that Riesling has challenges, but says prospects are improving. “When we started exporting 27 years ago, Riesling wouldn’t sell in the United States,” he explains. “But now people who buy Austrian wines are far more educated.” The pricing gap narrows at the higher end, according to importer Peter Weygandt of Weygandt-Metzler Importing. “With wines like F.X. Pichler and Franz Hirtzberger, we do about the same amount of Riesling and Grüner Veltliner,” he says. “At the value end, between $15 and $25, Grüner outpaces Riesling by two or three to one.” The company’s portfolio includes 10 Austrian producers. Weygandt notes that even wines from the country’s most renowned producers rarely retail for over $100.
Diverse Terroir
Although Austria is a relatively small country—about the size of South Carolina—it has great regional diversity. In Lower Austria, the Wachau, Kremstal and Kamptal regions are the heartland of Grüner Veltliner and Riesling, while wineries on the Pannonian plain thrive on lighter reds like Zweigelt, Blaufränkisch and Pinot Noir. The hotter Burgenland region produces full-bodied reds, while Styria makes aromatic whites like Sauvignon Blanc and Welschriesling. Even Vienna is a wine region—the capital features hundreds of hectares of vineyards within city limits and produces its own distinctive styles.
The Wachau region, located east of Vienna along the river Danube, is among the country’s premier wine regions, particularly for Grüner Veltliner and Riesling. Domäne Wachau, the region’s largest producer, depletes around 5,000 cases a year in the U.S. market. The winery cultivates roughly 440 hectares, 30 percent of the region’s total. “We have vineyards all around the Wachau,” says winery director Roman Horvath, one of Austria’s only Masters of Wine. The winery is a cooperative of some 250 small growers. “The smaller growers’ knowledge is extremely important to us,” Horvath says. “The region is complex, labor-intensive and very quality-driven.” Domäne Wachau’s range is led by the Federspiel Terrassen Grüner Veltliner ($16.99 a 750-ml. bottle), and its Smaragd Trocken Terrassen Grüner Veltliner ($30) was named to Wine Spectator’s Top 100 list in 2016. The winery is launching a new range of single-vineyard Grüner Veltliners and Rieslings in the United States this quarter.
In Austria, innovation is always a delicate balance between tradition and modernity. F.X. Pichler, a winery renowned for its single vineyard Rieslings and Grüner Veltliners, built a modern winery in 2009 and practices sustainable farming, but works on a long time-frame, with its average vines being more than 40 years old. “We don’t experiment so much with orange wine, natural wine or other freaky things,” says winemaker Lucas Pichler. “The focus is on thinking long-term rather than doing something the market wants now.” F.X. Pichler harvests three to five times for each of its single vineyard wines. “We’ll go through the vineyards weekly to harvest the best grapes,” Pichler says.
At Nikolaihof, also in the Wachau, history and tradition inform its innovation efforts. The winery’s roots date back 2,000 years—parts of its cellar are old Roman walls—and it aims to recreate a production method that’s as traditional and natural as possible. Grapes are planted and harvested in accordance with a lunar calendar, some wines are produced with a massive 18th-century wine press made from a single tree, and many offerings are aged in casks for a decade or more. Nikolaihof has been biodynamic since 1971 and was the world’s first Demeter-certified organic winery.
Indeed, biodynamic wines and environmentally friendly winemaking are Austrian hallmarks. “The younger generation took the reins 10 or 20 years ago and are making such a modern push,” Le Bernardin’s Sohm says. “Being organic and biodynamic is now very normal.” Those practices can take many forms. At Weszeli Terrafactum in the Kamptal region, efforts are organized around farming in conjunction with nature. “We try to have very high biological diversity, with a lot of different plants and animals in the vineyards,” says Davis Weszeli, who acquired the centuries-old winery in 2011. The winery’s practices encourage wild plants to grow between rows of vines, creating a habitat for local wildlife. This natural environment is reflected on the wine’s labels, which depict wildlife in the vineyards—ranging from a gopher on the Langenlois Kamptal Reserve Grüner Veltliner (around $18 a 750-ml. bottle) to a stag on the Purus Kamptal DAC Reserve Grüner Veltliner (around $35). “The soil is the most important capital for us,” Weszeli says. “We always try to put the terroir in the glass, and we do a lot by hand.”
As availability of Austrian wines in the U.S. market increases, consumers are embracing the country’s diversity beyond Grüner and Riesling. Le Dû’s offers unusual wines like the Stadlmann Zierfandler ($17.99 a 750-ml. bottle) and Sattlerhof Sauvignon Blanc ($22.99). At Le Bernardin and Aldo Sohm Wine Bar, Sohm stocks a wide variety of Austrian wines, with recent offerings including Loimer Extra Brut sparkling wine ($20 a 5-ounce pour) and the 2011 Schloss Gobelsburg St. Laurent ($130). While Sohm finds that guests often hesitate to commit to a full bottle of an unusual varietal, by-the-glass sales are more robust.
Red wine remains a small part of the Austrian category, but varietals like Blaufränkisch and Zweigelt have started to attract attention. “The reds are a much less mature part of the market, but they do have a natural appeal,” says McRoberts of Le Dû’s. “They’re in the same vein as Northern Rhône or Piemonte.” McRoberts does well with the Wachter-Wiesler Bela-Joska Blaufränkisch ($21.99). At Wally’s, red wines also represent a tiny portion of Austrian sales. “Very little of the category is red,” Montalto says. “I’d say it’s 98-percent to 99-percent white. It’s just not our customer base.” At Addy Bassin’s, however, the reds are coming on strong. “In the last three to five years, I’ve definitely seen an increase both in customer interest and in the quality of the reds,” Bernstein says. “They’re at good price points, and in the last few years there’s been a trend toward reds that are low in alcohol and low in tannin, but with higher acidity.”
Selling Strategies
Selling Austrian wine takes a certain amount of personal attention. At Le Dû’s, the Austrian market is bifurcated. “We have different sides of our business—our regular foot-traffic customers, and our private clients and email list,” McRoberts says. “We sell a lot of $20-to-$40 wines in the store. It’s pretty easy to press them into people’s hands, and occasionally they get hooked.” Pricier wines sell primarily to email customers, with F.X. Pichler, Schloss Gobelsburg and Nikolaihof as perennial favorites. “People will buy them in quantity with an eye to putting them away, which is what they really deserve,” McRoberts adds. Since the wines have long aging potential, the collectors’ market is a natural outlet. “People normally drink the wines too young,” Pichler says.
In the Los Angeles market, Wally’s has historically been a Burgundy, Bordeaux and California wine store, but has found consumers receptive to Austrian wines. “I came on about a year and a half ago and put a huge emphasis on our German and Austrian selections,” Montalto says. “Since then, Austrian wines have probably tripled in sales. That’s with just a mild push, sending out emails, and letting people know we actually have the wines.”
Austrian wine’s versatility in food pairing is one of its greatest assets. “The only better food pairing wine is Champagne,” Sohm of Le Bernardin says. “Other than that, it’s Austrian wine.” Fish and Asian cuisine have become natural pairings for the wines, especially the lighter Federspiel offerings. “Federspiel and Smaragd wines are both food-friendly, but for different kinds of dishes,” Sinclair of González Byass says. “A young Federspiel Terrassen Grüner Veltliner has very zingy, fresh, fruity characteristics, but a Smaragd can lend itself to a whole different level of food matching because of the weight and the texture.”
Austria naturally is compared to its larger Teutonic neighbor, and while Germany has the clear lead in overall volume, the winner in the fine wine segment is less clear. “German wines don’t sell as quickly as Austrian wines across the board,” McRoberts of Le Dû’s says. Bernstein of Addy Bassin’s recounts the opposite experience. “Nowadays, Germany’s actually coming out a little bit stronger,” he says. “German wine has definitely become more accepted and trendy.” Both categories have some common problems, such as a complex nomenclature and a labeling system that retailers note can be confusing to customers. Sinclair of González Byass admits that most consumers don’t know the difference between Federspiel wines—which are lighter-bodied—and fuller Smaragd wines. Several retailers suggested indicating on Austrian Riesling labels that the wines are always dry.
Nevertheless, increasing consumer sophistication and a continuing focus on sustainability and quality bode well for Austrian wine. “The idea of Austria being exotic or a niche market is coming to an end,” McRoberts of Le Dû’s says. Peter Weygandt sees growth ahead. “The younger generation is very open and experimental,” he notes. “The Austrian category will continue to expand by value, and I see a lot of growth in reds.” Sohm agrees and predicts a bright future for his homeland. “Austria is a great country,” he says. “We just don’t advertise it.”