Export report shows 20 per cent growth for Australian wine

30 July, 2018 by Andy Young

The value of Australian wine exports grew by 20 per cent to $2.76bn in 2017-18, the highest rate of growth for 15 years, according to Wine Australia’s Export Report for the year ended 30 June 2018.

The average value of wine also increased, up by nine per cent to $3.24, which is the highest it’s been since 2009.

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Buoyed by the strong growth, Wine Australia’s CEO Andreas Clark said that the focus for Australia’s grape and wine community now would be to redouble its efforts in the US market, to bring further export opportunities.

“Of our five largest markets, only one market, the USA, didn’t grow in value last year. Importantly, the USA is the world’s largest wine market and Australia has the opportunity to capture more of the premium end of the market as American consumers trade up to higher priced wines,” Clark said.

“Australia has been very strong in the commercial half of the USA market (54 per cent of the US off-trade volume is wines under US$8 per bottle), but this market is shrinking. As American consumers transition from commercial wines to more premium wines, Australia has to be there to capture the opportunity.

“The premium end of the USA wine market is enjoying robust growth, as are Australian exports in nearly all price points above $10 per litre (albeit off small bases) and we’re working to accelerate this growth in demand through a marketing push supported by the Australian Government’s $50m Export and Regional Wine Support Package.”

The Chinese market, including Hong Kong and Macau is by far the biggest market for Australian wine exports and it saw a stunning 55 per cent increase in 2017-18, going up to $1.12bn.

Of the other top five markets, the US dropped by eight per cent to be valued at $424m, the UK grew by 12 per cent to $384m, Canada increased seven per cent to $199m and New Zealand also saw growth, up 17 per cent to $88m.

The Export Report also highlighted good news in the price point of exports, with all but one of Australia’s export price segments showing growth. Exports above $10 per litre increased by 45 per cent to $855m, a record value.

The key price segments that drove this growth were wines priced $20–29.99 per litre FOB and $50–99.99 per litre FOB, both of which grew by over 80 per cent. Also driving growth in overall value is the $2.49 per litre FOB and under segment, reflecting the increase in demand for bulk shipments.

Wine Australia said that the growth in exports was driven by a 15 per cent increase in active exporters compared to the previous 12 months, with 2298 exporters shipping 23,761 unique products. Of these exporters, 1616 either started exporting or grew the value of their exports, contributing $653m to the growth in overall export value.

The determination to redouble efforts and bring the US market back into export growth was highlighted last week, with the inaugural Australia Decanted event at Lake Tahoe. This event saw 100 key influencers from the US trade and media giving deeper insights into the range of Australian wines on offer in the US.

Clark said: “Australia Decanted was a great platform to launch the wine sector’s strong return to the US market with the assistance of the Australian Government’s $50m Package. The US trade has told us that now is the time for Australian exporters to reengage with the US market.

“This event will flow into Aussie Wine Week and we’ve earmarked September 2019 as Aussie Wine Month to hit the US market en masse and really grab hold of the growth opportunities available.”

Senator Anne Ruston, Assistant Minister for Agriculture and Water Resources added: “Australia Decanted is an exciting part of this year’s $6.5m investment to accelerate growth of Australian fine wine in the US, which is the world’s largest wine consumer and largest import market by value.

“The Australian Government’s $50m Export and Regional Wine Support Package provides the opportunity to kickstart a renewed push by our exporters into this critical market, allowing the sector to build on the export growth Australian wines are experiencing in China, the UK and Canada.”