but it was a great learning experience,”
says Slade. “Today, importers are bringing
to market scaled-down, well-vetted port-
folios of stylish wines.” While there will
always be room in the market for value-
priced, easy-drinking wines, the trade or-
ganization is putting its emphasis on the
middle tier—“the $15 to $24 range, the
core of the industry,” Slade says.
Only strong, terroir-driven brands
could withstand the glut evaporation and
the exchange rate-squeeze, says George
Galey, president of American Estates
Wines, an importer of Australian wines
since 1986 which just added the Gren-
ache- and Shiraz-specialist Chapel Hill
Winery from McLaren Vale in anticipa-
tion of the Aussie wine comeback. “What
happened wasn’t necessarily that the Aus-
tralian category collapsed, but that the
Australian exporter market collapsed,” he
says. (Grateful Palate going out of busi-
ness in 2010 was among the most high-
profile.) “We are talking about brands
invented by marketing companies, not
family vineyards—brands so fanciful they
were ludicrous—and they have a limited
lifespan,” says Galey. “If you take out Yel-
low Tail, there wasn’t a whole lot in the
under $10 segment that was functional.”
“
What we found at Morrell is that
the $10-and-under Australian market is a
complete commodity market—it’s entirely
about price and there is no brand loyalty,”
says Reilly. “Well-known producers with
stellar reputations have a following that
never really left. We’ve always done ex-
tremely well with names like d’Arenberg,
Henschke, Leeuwin and Peter Lehmann.”
Interestingly, even Yellow Tail—
which has outperformed the category
every year and still accounts for 65% of
Australian imports volume—is making
accommodations. Brand owner Casella
Wines has announced plans to launch a
$10 wine in 2013, $3-$4 above Yellow
Tail’s price point. “The strong Aussie
dollar has tightened margins for us and
our partner and so far we have absorbed
those costs together,” says Tom Steffanci,
president of Yellow Tail’s U.S. importer,
Deutsch Family Wine & Spirits, adding
that price increases on the base brand
could happen in the future.
Steffanci chalks up the category de-
cline partly to a loss of “some of that dis-
covery element” as well as the emergence
of new categories that have captured con-
sumer attention—Moscato and sweet reds
among them(YellowTail has nicely cashed
in on these two trends with the launch of
Yellow Tail Moscato and Sweet Red Roo
which are off to strong starts). While wine
drinkers are aware that Yellow Tail is from
Australia, it’s viewed primarily as “a great
value—a wine that is consistent and can
be relied on, independent of its country
of origin.” But consumers haven’t aban-
doned Australia, he believes, “they have
just broadened their consideration set.”
Re-engaging the Trade,
Via Cool-Climate Wines
The path forward is in many ways a return
to what many Australian producers have
been doing for decades (after all, Austra-
lia has a 200-year-old winemaking his-
tory). “Premium, regionally-labeled wines
have been in existence for years and we
are starting to tell their story,” says Slade.
Between the blockbuster, un-food-
friendly style of many wines and the fact
that volume-focused Aussie winemakers
largely ignored restaurants, the category
never developed the on-premise chan-
nel, Epicurean’s Zahaba believes. Many
importers are working to change that
australian wines
With a new crop of boutique brands,
back-stocked inventory finally sold off, and
sales of premium wines growing faster than
cheaper wines, it seems the country’s wine
industry is hitting its sustainable stride.
Chapel Hill, seen here from above, specializes in Grenache and Shiraz,
but from a decidedly more terroir-based approach.
Yellow Tail—made by Casella Wines—is planning to release a new,
higher-priced wine in the near future.
Nick Spencer, winemaker at Eden Road Wines
