Australian and American wines

[Gifted Gourmet]

The article

Australian wines claim six of the top ten places in the British market in a list dominated by new world wines, analysts A C Nielsen's research said. Hardys, Australia's largest wine producer, is Britain's biggest seller while compatriots Jacob's Creek can raise a glass to their third place. California's Blossom Hill was the second most popular.

"Over the last ten years per capita consumption of wine has doubled in Britain. At that same time, along came Australia with very fruit-forward, consumer-friendly wines and with brand names that were easy to understand and pronounce."

The Australians and Americans have experienced success in selling wine in England primarily because they use excellent branding and rely upon grape types. Apparently, the French have lost their former popularity because they have traditionally relied upon geography and pedigree when they produce their wines.

Is it possible that the trend in England has already been in evidence elsewhere? Is Australian wine the best buy for the money now? There is a list at the end of the article which names the top selling brands.

a bit more on this story from The Scotsman

In May, a documentary called Tempête dans un Verre de Vin - storm in a wine glass - caused outrage in French wine circles because it claimed that not only is the industry in crisis, but it is unimaginative, uncompetitive and has been slow to react to the threat of so-called New World wines.

Edited July 14, 2004 by Gifted Gourmet (log)

[Mark Sommelier]

The producers named are all bulk wine producers, both American and Australian. How sad. Of course, Riunite was the best selling wine in the world for many years. The fine wine trade accounts for 2% of the wine business in the world. Everyone can't drink Chateau Margaux!

[KatieLoeb]

Mark is right. Add to that what's mentioned in the second article linked about the huge surplus of Australian wines hitting the market due to overproduction, the easy to read and understand labels that require no knowledge of geography, wine region history, what's planted where, etc. and the newer, wiser British wine consumer is snapping up the bargains left and right without having to study up before heading to the wine shop.

Wines that are touted as the "biggest sellers", by definition, have to have the volume of product to back that up. The little boutique winery that only produces 500 cases/year is NEVER going to compete for that title. They can't. The big Refinery-not-Winery sized producers also have the revenue and structure to have a Marketing department that's making sure they stay in that position with well placed advertising in the wine press (think big beautiful full page four color ads in The Wine Spectator) and on TV and radio (Ecco Domani, Turning Leaf, Arbor Mist anyone?) donations of product to charities or wine education groups like Wine Brats, etc. that will make their products more accessable to the thirsty masses yearning to drink freely, and will become much like Kleenex, Band-Aids or Q-Tips - a BRAND of wine the average consumer will recognize and reach for again and again because it's readily available, not a high quality fermented beverage that's reflective of terroir, excellent horticulture and the able hand of a skilled artisan winemaker.

It's a self-fulfilling prophecy to a great extent. Sell oceans of crappy wine that was cheap to produce because it's made from high yield overcropped fruit in less desirable areas (read: NOT the high rent terroir of Bordeaux or Napa Valley), make lots of money, spend money on advertising/marketing/product placement to stay in the public eye, make MORE money, etc., etc. The cycle will repeat ad infinitum because as has been pointed out here and in other threads, "fine wine" is but a tiny fraction at the top of the market. Most folks buy wine for immediate consumption, at a price point that is more important to them than what's actually in the bottle.

[Boris_A]

To roughly illustrate this by some numbers (taken from an study 1997):

world wide market share of:

table wine (<$5/btl): >50%

premium wine ($5-$7): ~25%

super premium ($7$-$14): <10%

ultra premium (>$14/btl.) ~2%

As a footnote, wine consumption in France is ~60l/capita. I guess market share leader is still wine sold en vrac = reusable 5l plastic containers filled at rural wineries and wine shops with equipment not unlike to a gasoline station. 1963 yearly consumption in France peaked at 127.3 l (sic).

Edited July 14, 2004 by Boris_A (log)

[Dave the Cook]

The producers named are all bulk wine producers, both American and Australian. How sad. Of course, Riunite was the best selling wine in the world for many years. The fine wine trade accounts for 2% of the wine business in the world. Everyone can't drink  Chateau Margaux!

Maybe rather than disparaging the overwhelming majority of the wine-consuming public for acquiescing to the effective marketing of New World wines, we should be happy that, these days, it's hard to find a bottle of Riunite among the bevy of Australian Shirazes and California Cabs. Isn't this really a step up?

It's a self-fulfilling prophecy to a great extent. Sell oceans of crappy wine that was cheap to produce because it's made from high yield overcropped fruit in less desirable areas (read: NOT the high rent terroir of Bordeaux or Napa Valley), make lots of money, spend money on advertising/marketing/product placement to stay in the public eye, make MORE money, etc., etc. The cycle will repeat ad infinitum because as has been pointed out here and in other threads, "fine wine" is but a tiny fraction at the top of the market. Most folks buy wine for immediate consumption, at a price point that is more important to them than what's actually in the bottle.

This strikes me as a little unfair. It's easy to complain about "advertising/marketing/product placement," but the other side of this is that alleged quality producers do little to explain themselves to the buying public, and often their advocates speak in terms that aren't comprehensible to someone who's just looking for a nice wine to go with the salmon off the grill. Price is important, yes, but most people, if shown something better for a dollar more, will buy it -- otherwise, they rely on shelf cards and the dubious advice of sales clerks. The problem is that no one is out there describing alternatives in ways potential customers can understand. I find it hard to fault bulk producers for seeing a need and filling it.

[ctgm]

From a merchant's point of view, I find that these branded wines are both good and bad. They are very good as they tend to be drunk by people who are not really into the ins and outs of wine but just want a bottle. However this at least means they are drinking wine and can be persuaded to try something different/better.

The bad bit is that a lot of people seem to be too unsure about their wine knowledge to move away from the big wineries. They tend to flit between the well marketed wines and convince themselves that because it is a big name it has to be good.

In the scheme of things everything is pretty small compared to E&J Gallo. I can't remember the figures but they are truly impresive. What is it 1 in 3 bottles drunk in the USA is a Gallo?

[Adam Balic]

I think that for ~£5-7 per bottle, which is about what these popular Australian wine sell for in the UK, better wine is to had from France, Spain, Italy etc. But it is a question of being able to identify a brand and many French wines fail terribly at this. Jacobs Creek Shiraz may not be the most thrilling wine in the world, but it isn't undrinkable, which sad to say is sometimes the case with the cheaper French wine. Most people will not risk an unknown bottle, if they have been burnt by a similar looking bottle.

I wonder how much market share the French have lost to the Australians because of people have been burnt by spending £7 on a bottle of swill quality Bordeaux and how much has been lost because Jacobs Creek was advertised during "Friends"?

[britcook]

I think that for ~£5-7 per bottle, which is about what these popular Australian wine sell for in the UK, better wine is to had from France, Spain, Italy etc.

Better wine and, of course, worse. What you are getting from the Australians is consistency of product and a regular supply. I can buy Jacobs Creek all year round and the vintage differences are minimal, but the latest vintage of one of my French favourites from the Cotes de Gascogne has just gone off list again and won't be available till the next vintage release next year, and it may (or not) be as good as the last one. Hardys, Penfolds and the like make decent wine, it may ultimately lack that last touch of finesse or individuality but it's honest, well made and well priced.

To try and get any useful knowledge of what is available from Europe is practically impossible unless you are prepared to put an inordinate amount of time into research and tasting, even if you concentrate on a specific area. This estate or that estate may produce exceptional wine this year, "priced to sell" as they say, but next year the wine may be worse, overpriced and no longer available from the same store due to a change of agency or importer or stocking policy. And this is before we have gone into aging or when the wine is ready to drink, a large number of European reds and even some of the whites are not at their best on release and need bottle age to reach their full potential, in some wines it might be a few months in others several years. Not a lot of use if you want to go out and buy a few bottles for your dinner party on Saturday.

The Australians take their oenology seriously and have put a lot of time and money into research into viticulture and vinification techniques. They have taken the products produced and marketed them well, and met the needs of the everyday wine drinker so it is hardly a surprise that they have taken the market by storm.

Edited July 14, 2004 by britcook (log)

[Adam Balic]

All very true. One of the problems with Australian wine in the UK is that being Australian, I wouldn't normally buy or drink the majority of Australian wine sold in the UK. My fiends/relatives in Australia have a hard time coming to terms with the fact that the success of Australian wine in the UK is less about "the good stuff" and more to do with large volume commercial brands.

It would be interesting to know the break down of consumer choice, obviously a lot of people are going for Australian wine in the £5-10 bracket, but if consumers were to spend say £20-40 would they pay that for an Australian wine or would it more likely be French?

[Winot]

It would be interesting to know the break down of consumer choice, obviously a lot of people are going for Australian wine in the £5-10 bracket, but if consumers were to spend say £20-40 would they pay that for an Australian wine or would it more likely be French?

Agreed. However these price brackets probably aren't that representative in the UK -- I beleive the average spend per bottle is closer to £3-4.

[Adam Balic]

It would be interesting to know the break down of consumer choice, obviously a lot of people are going for Australian wine in the £5-10 bracket, but if consumers were to spend say £20-40 would they pay that for an Australian wine or would it more likely be French?

Agreed. However these price brackets probably aren't that representative in the UK -- I beleive the average spend per bottle is closer to £3-4.

I don't believe so, that sounds too low. £2.99 will by you a bottle of supermarket Rose de Anjou, the cheapest Australian red at Oddbins is 'Rawson's Retreat' blend and this is £3.99 a bottle. Considering that the latter contains Ruby Cabernet (= filth and second rate filth at that) this is an expensive wine for what it is. £3-4 pounds would have to be at the very lowest end for what you could buy a bottle of Australian wine for in the UK.

[britcook]

It would be interesting to know the break down of consumer choice, obviously a lot of people are going for Australian wine in the £5-10 bracket, but if consumers were to spend say £20-40 would they pay that for an Australian wine or would it more likely be French?

I think they're going for the £5-10 bracket because that is what they are presented with. Most consumers won't even think of spending more than £20/bottle retail, certainly not me, but even in the £10-20 range there is very little Australian on the shelves over here, although there is some and damn fine it often is.

[Adam Balic]

I dunno, I live in Edinburgh and I would estimate that ~1/3 of the Australia wine is priced over £10.

edit: by variety, not volume.

Edited July 14, 2004 by Adam Balic (log)

[endless autumn]

The average price of a bottle of wine purchased in the off-trade is £4.60 (according to BBC and BBR). I thought it was much lower than this (I'm sure Tim Atkin always rants on about it being sub £4).

88 per cent of Australia's British market costs less than £5 (according to Sydney Morning Herald), so I guess the bogofs and 33% off (esp. on Rosemount/ Lindemans Bin 65) are keeping the prices down.

[Winot]

It would be interesting to know the break down of consumer choice, obviously a lot of people are going for Australian wine in the £5-10 bracket, but if consumers were to spend say £20-40 would they pay that for an Australian wine or would it more likely be French?

Agreed. However these price brackets probably aren't that representative in the UK -- I beleive the average spend per bottle is closer to £3-4.

I don't believe so, that sounds too low. £2.99 will by you a bottle of supermarket Rose de Anjou, the cheapest Australian red at Oddbins is 'Rawson's Retreat' blend and this is £3.99 a bottle. Considering that the latter contains Ruby Cabernet (= filth and second rate filth at that) this is an expensive wine for what it is. £3-4 pounds would have to be at the very lowest end for what you could buy a bottle of Australian wine for in the UK.

I've down some quick searching and my figure is clearly out of date (I think I got it from an Oz Clarke book but that may have been from 10 years ago).

However this article from the Guardian 19 Feb 2003 suggests that

The UK trend is for more expensive wines: the average price per bottle is now £4.65

so it still ain't that high.

[Adam Balic]

That price is for the average price per bottle as a total, no the average price paid for a bottle of Australian wine. You have to take out all those Black Tower drinkers.

But assuming that 4-5 quid per bottle is an average price for all wine, I think that a 'better' (note: entirely subjective) wine can be had from say the Languedoc, then from South-Eastern Australia. But again I am bias because I can't bring myself to pay 4-5 quid for a bottle of Rosemount/Jacob's Creek/Rawson's Retreat etc.