While the past year has seen dramatic shifts in the wine industry, wines from Australia have successfully pivoted and are now showcasing a broader selection of regions and styles through online venues like Wine.com. “We are a platform that can amplify the incredible stories of Australian producers and enhance the discovery of new regions and varieties of Australian wine,” says Michael Osborn, co-founder and executive vice president of Wine.com. “Australian wines have grown 140%, and this compares favorably to our growth in wine of 127%.”
Founded in 1998 with the mission to help consumers decipher the vast world of wine, Wine.com serves 42 states and Washington, D.C. and in 2020 increased sales by 119% to $329 million. Thanks to a Wine.com partnership with industry group Wine Australia, the Australian wine category has gained more U.S. consumers who are purchasing at higher price points, after years of being dismissed as a value-driven segment. “Wine.com helps facilitate that education and awareness for higher-priced wines, at a time when hand-selling in brick and mortar retail is extremely challenging,” says Aaron Ridgway, regional general manager for the Americas at Wine Australia. “Despite the positive trends for premium Australian wine, U.S. consumers still have a lot to discover about it.”
According to Wine Australia, the value of Australian exports increased by 4% to $434 million in 2020 in spite of the myriad challenges the industry encountered last year. The U.S. represents one of the top five export markets for Australian wine, comprising 15% of exports at the end of 2020. While the value of Australia’s exported wine hit a U.S. peak of $382.3 million in 2015, declines followed, and in 2020 value fell 4% to $282 million, according to Impact Databank. Bottled Australian wines, however, grew 1.4% in the U.S. last year to just under 9 million 9-liter case shipments.
At the end of 2020, China remained as the largest-value export market for Australian wines, accounting for 35%, but amid tensions in late November the country imposed dramatic anti-dumping trade tariffs on Australian bottled wine imports, ranging between 107% to 212%. The result has led a number of leading Australian wine marketers and producers to shift attention to other strong export markets, such as the U.S. The full impact of the tariffs remains to be seen, but many players in Australian wine are optimistic about the bright future a renewed focus could bring to the U.S. market.
Though the Australian wine category is broadening in the U.S. with new producers and styles coming to market, it’s still largely dominated by heavyweights in traditional Australian styles. Treasury Wine Estates (TWE) markets a number of popular Australian wine brands. Since its debut in 2013, TWE’s 19 Crimes has exploded in popularity with consumers and last year grew in volume by nearly 34% to roughly 2.2 million cases in the U.S. Last summer, TWE introduced a new California-sourced 19 Crimes offshoot, Snoop Cali Red ($12 a 750-ml.), and this March launched a Snoop Cali Rosé, which are both poised to further draw in U.S. consumers to the brand. “19 Crimes has always resonated with consumers due to the authentic story and the real-life characters behind the labels,” says TWE Americas CMO Carl Evans.
TWE has also turned to California to broaden the other standout in its luxury Australian portfolio, Penfolds. This spring, the company rolled out four wines ($50-$700 a 750-ml.) predominantly created from California vineyards, some of which were grafted from TWE’s vineyards at Magill Estate in South Australia. A couple of the wines also include a small amount of Australian wine in the blend. “We hope that these wines will introduce Penfolds to new U.S. consumers that enjoy California wines,” says Evans.
With more than 120 retail outlets stretching across the state of Florida, family-owned ABC Fine Wine & Spirits sees tremendous upside for Australian wines from its expansive consumer base. The company says that in the 52 weeks from early March 2020, they were up about 18% on Australian SKUs. While ABC does carry a healthy selection of smaller Australian producers featuring lesser-known grape varieties, it says 60% of its Australian wine sales are dominated by the value section, with its most popular options being Deutsch Family Wine and Spirits’ Yellow Tail ($9 a 1.5-liter) and TWE’s Lindemans ($5 a 750-ml.). “I would be lying to you if I told you it didn’t baffle me that our sales were not stronger in the premium tier, based on the quality and the price that they can produce,” says director of sales Alex Poreda. But he’s confident consumers will eventually turn to Australian wine more frequently for its strong quality at reasonable price points. “When you look at domestic wines, you struggle a bit to find that kind of quality at retail from California or even Washington,” he adds.
ABC has also noticed the Australian category fragmenting after the popularity of well-known varieties like Shiraz, Chardonnay, and Cabernet Sauvignon. While the sheer size of Australia allows for extremely diverse growing regions and climates, the retailer’s consumers have yet to fully buy into the other Australian wines it carries in the stores, such as Viognier and Sémillon. Shiraz is one of Australia’s signature grape varieties, and looks likely to remain so in the near future despite a crop of new producers branching out in fresh directions. Wine Australia notes that sales of Shiraz in 2020 on partner Wine.com’s platform eclipsed sales in 2018 and 2019 combined, indicating the popular Australian grape variety still commands the U.S. market.
New Options Emerging
The Riverland region of South Australia has traditionally been known for its bulk wine production, but a new wave of producers is raising its profile with interesting wines grown from grapes more suited to its hot, arid climate. Founded in 2003, Ricca Terra has been producing wines inspired by southern France and Italy, with grapes such as Nero d’Avola, Montepulciano, Lagrien, Negroamaro, Fiano, Vermentino, Tinta Cão, Arinto, and Touriga Nacional, among others. “People talk a lot about matching wines with food, but we talk about matching wine with climate,” says Ashley Ratcliff, director of Ricca Terra. “Our style is all about varietal characteristics. We avoid the use of new oak; we want to see the flavors of the fruit. We want to make wines that suit our drinking conditions.”
Ricca Terra’s portfolio has been available for about two years in the U.S. through New Jersey-based Vine Street Imports, and it currently exports about 1,000 cases stateside. The company says that its most popular wine in the U.S. is its Nero d’Avola ($27 a 750-ml.). “The region is awash with varieties such as Shiraz, Cabernet Sauvignon, Merlot, and Chardonnay, but Nero d’Avola fits perfectly with our mission,” Ratcliff says.
Another Riverland producer crafting wines with Mediterranean grape varieties such as Nero d’Avola, Montepulciano, and Vermentino is Delinquente. Founded in 2013, Delinquente began exporting to the U.S. around 2017 and has since grown availability to roughly 19 states with about 2,000 cases through Hudson Wine Brokers. Some of its most popular wines in the U.S. are the Bianco d’Alessano pétillant naturel and Nero d’Avola Rosato (both $20 a 750-ml.). Delinquente saw the opportunity to highlight the uniqueness of Australian wine and has found a following for its minimal-intervention, fresher styles of wine. “We looked to the parts of Europe that have similar hot, low-rainfall climates, and grape varieties that thrive in those areas,” says Delinquente owner and winemaker Con-Greg Grigoriou. “We wanted to work with fruit that was better suited to the region, and that was of a premium level rather than 99.99% of what was actually growing in the Riverland.”
Wine Australia’s Ridgway points to the extreme diversity of Australia’s many wine-growing regions as fostering a huge potential for experimentation from the country’s producers and exploration among U.S. consumers. “Australian winemakers are curious and not beholden by tradition, and they take playful experimentation very seriously,” he explains. “There are some really exciting wines in the market from ‘alternative’ varieties like Fiano and Nero d’Avola, or winemakers experimenting with different techniques like natural winemaking or whole bunch fermentations, along with our more established wine styles that keep the offering rich and complex.”
Iconic Hunter Valley wine producer Tyrrell’s has also created a following for its signature Sémillon wines. Having established a footing in the U.S. that began in the 1980s, Tyrrell’s has recently seen its sales rebound after selling off its popular value brand Long Flat in the early 2000s and focusing instead on its premium selection, with its U.S. portfolio starting at about $20. Available nationally, Tyrrell’s has seen strong sales through retail venues such as Wine.com and Whole Foods. Some of its most popular wines in the U.S. include the Hunter Valley Sémillon, Hunter Valley Shiraz, and Rufus Stone Shiraz (all $20 a 750-ml.). “We’re about fruit and acid rather than alcohol and tannin. Our wines are medium-bodied at best,” says Bruce Tyrrell, managing director and fourth-generation winemaker at Tyrrell’s. “Fine and elegant—we make the best Sémillon in the world.”
Natural Wines Stand Out
As U.S. consumers turn to healthier food and beverage options, producers of natural and organic wines in Australia have found an intuitive fit. In 2004, Trinchero Family Estates partnered with South Australia’s Angove Family Winemakers to bring its line of sustainably produced wines to the U.S. The latest debut, Naturalis ($15 a 750-ml.), is a line of gluten-free, vegan-friendly, non-GMO wines made from 100% organic grapes and packaged in bottles up to 28% lighter in weight. The Angove range features wines at a variety of price points from $15-$100 in a mix of on-premise accounts and retail. “With their wide price range, Angove wines appeal to everyone, from Generation Z and younger millennials entering the wine category who tend to be more price-conscious to consumers reaching up to higher-priced wines for collecting or saving for a special occasion,” says Trinchero’s senior vice president of marketing, Dave Derby. “Angove’s sustainable winemaking practices and commitment to quality differentiate them from other wines within these price points.” Bestsellers in the Angove portfolio include Family Crest ($25 a 750-ml.), a line of premium small-batch, hand-crafted McLaren Vale wines; Warboys Vineyard ($75), single-vineyard wines that are certified organic and biodynamic; and Medhyk ($100), Angove’s flagship old-vine Shiraz that pays homage to the family’s founder.
The Riverland’s Delinquente winery has found an instant following for its organic wines among U.S. consumers, who the company says were gravitating in that direction in line with broader market trends. “The style of wines that we make—minimal intervention, natural wines, lower-alcohol, sort of a fresher take—is obviously an expanding category in the wine trade around the world, and particularly in the U.S., so making wines that fit into that category definitely helped with that growth,” says Grigoriou, who sees opportunities for Australian winemakers exploring more natural styles of wine. He notes that the number of small, natural, or minimal-intervention winemakers and wineries is growing as well. “They’re also getting interest from export markets quickly, whereas eight or ten years ago, when we started the company, it took a long time to start exporting.”
Virtual Path Forward
In addition to the attractive price-quality ratio Australia is becoming known for, a number of other factors portend the category’s bright future. While widespread closures of on-premise venues have disrupted the usual means of bringing consumers into a wine brand or region, some producers like Tyrrell’s see opportunity to reach a broader audience with ease through virtual events. At a recent virtual tasting, the company notes, it was able to offer 60 attendees a taste of all its most popular wines at about 10% of the cost of traveling to the U.S. and hosting a similar event in-person. “Everyone had the wines in front of them and you end up staying longer because you don’t have to run somewhere else,” says Tyrrell. “This has just been a stunning impact to business.”
Being able to connect with more consumers in an easier manner will aid in Wine Australia’s goal of bringing more diversity to what is available in the U.S. “With 100 different grape varieties grown across 65 wine regions, our wines are an expression of our distinctive terroirs and the vibrant communities that cultivate them,” says Ridgway of Wine Australia, noting that out of more than 2,500 wineries in Australia, only about 400 are in distribution in the U.S. “There’s a lot of room for growth, and in promoting exports of wines at $10 and above.” The trade group has launched Australian Wine Connect as a virtual platform to bring the global wine community together; it includes consumer-facing activities like virtual tastings, as well as its “Made our Way” campaign across Facebook, Instagram, and Pinterest that’s targeted at younger consumers open to exploration.
Outside of any specific consumer demographic, Delinquente sees the friendly relationship the U.S. has with Australia as benefiting the broader Australian category. “In most cases in the U.S., Australia has such a good reputation,” Grigoriou says. “If we can produce wines that are of a quality that are worth paying for, and we market them in the right way, Americans will embrace them.” However, the sheer size of the U.S. market can often be one of the biggest challenges a smaller Australian producer faces in launching in the market. Grigoriou notes how important it is for Australian wineries to partner with the right importer to allow access to the distribution networks it would need to grow to different U.S. markets. “It would be very difficult to do it piecemeal, or state-by-state,” he says. “Having a very good importer that understands the logistics and has that set up well makes everything a lot easier.”
While wine delivery services and virtual marketing events have helped offset the pandemic-induced slowdown of on-premise wine sales, some see the return of on-premise accounts as vital to the continued growth of the premium Australian category. Poreda of ABC says that Australian wine is in a strong position retail-wise, but over the next several years Australia will need to reinvest in the on-premise. “Twenty dollars at retail would be about $50 on a wine list,” he says. “Compared to Napa Valley, it’s going to look like a great value, because it really is a great value.”