State of the Sector report
Uniquely Australian: Fresh Authentic Exciting
January 2018 Contents
Introduction 3 History, evolution, revolution 4 Reasons to believe 13 Markets – performance and outlook 26 Domestic Australian market 27 China (mainland) 28 China (Hong Kong) 29 United States of America 30 Canada 31 United Kingdom 32 Europe (excluding UK) 33 Asia (excluding China) 34
All export figures are for calendar year 2017 unless stated otherwise. Values are in Australian dollars free on board (FOB) unless otherwise stated. Introduction
Australia produces unique wines that are This report looks at the parallel and Hiroshi Ishida, Japan’s leading fresh, authentic and exciting. Australia shared history of wine and music in sommelier said ‘There is no other wine- offers distinguished sites, the wealth of Australia, and how both have evolved producing country like Australia, which some of the oldest vines on the planet into something uniquely Australian, is never afraid of changes. Australia and multi-generational families whose appreciated by millions of people is the most dynamic and diverse wine long-standing dedication provides around the globe. The wine sector has producing country.’ inspiration and leadership while offering been through a particularly turbulent custodial care of Australia’s most decade since 2007, but our commitment precious vines and wines. to innovation and quality, diversity, creativity and authenticity means we There are distinct parallels between are primed for a new era of prosperity. Australian wine and Australian music. The latest market performances for Australian music and wine are unique Australia suggest that we are well expressions of a diverse Australian on the way. culture and landscape. Both are distinctly Australian while also universal. Like wine, Australia has a rich musical history that has played a huge part in shaping Australian culture. Music and ‘So, you look into the song are inseparable in Indigenous cultures and part of unbroken traditions land and it will tell dating back tens of thousands of years. Folk music, like grapevines, has existed in Australia since our colonial days. you a story’ Rock and popular music have an almost Great Southern Land, Icehouse limitless number of genres — including alternative, country, electronic, funk, grunge, indie, hip hop, pop, progressive rock, punk, R&B, rock, ska, and soul — just as there are more than 100 grape varieties grown commercially. These multiple genres and varieties provide a niche for every taste and every type of music and wine lover.
Wine Australia • State of the Sector • January 2018 3 History , evolution, revolution
History of innovation Musical exploration and innovation in Australia can be traced back to the goldfields, where improvisation was a significant part of music in the colonies. In the early 20th century, Percy Grainger (the pianist and composer) emerged as Australia’s first world renowned musical innovator. In his long career, he made many adaptations of other composers’ works but much of his work was experimental and quite unusual. Perhaps his best-known music experiment was ‘Free Music’ from the 1930s that challenged conformity with the traditional rules of set scales, rhythms and harmonic procedures. Grainger believed his Australian origin naturally led to innovation and experiment in his music.
This innovation continues today with Australian musicians interpreting old classics and creating new classics. Two examples illustrate this. On the back of a ground-breaking video, Gotye’s Somebody That I Used to Know became a global hit in 2011. The song samples Luiz Bonfá’s 1967 song Seville and has sold more than 13 million copies worldwide, becoming one of the best-selling digital singles of all time. In the classical arena, Australian violinist, conductor and composer, Richard Tognetti has established an international reputation for his compelling performances and artistic individualism. He was made a National Living Treasure in 1999. Percy Grainger
4 State of the Sector • January 2018 • Wine Australia Maurice O’Shea tasting wine at the Mt Pleasant Winery
‘I think I hear the sounds of then’ Sounds of Then, GANGgajang
Innovation and exploration have also The desire to embrace the funky and always been at the forefront of the gritty art of winemaking has led to Australian wine and grape community. wines that are truly exciting and Australian growers and winemakers capture a revolution in the glass. are curious and willing to experiment; One of the reasons for the success we challenge convention. Whether it’s of Australian wine is that, as a innovative techniques in the vineyards, collaborative community, it has pushing winemaking boundaries or innovated. Over the last 50 years the experimentation with non-traditional emergence of an Australian fine wine varieties, there is a trend to throw dimension owes a lot to individuals and out old rules and step forward with institutions who have experimented, a generational shift in attitude and tried new things, and come up with approach. For example, Maurice O’Shea novel solutions for problems. These hunted for the best vineyards and innovations haven’t just benefited wines in the Hunter Valley and across Australian wine, they’ve spread Australia for his stunning expressions throughout the wine world. of style or place. Max Schubert pushed boundaries in winemaking, taking Innovation has helped the Australian the latest in winemaking research to wine scene develop into the dynamic create Australia’s most famous wine — and diverse state it is in today. Penfold’s Grange.
Wine Australia • State of the Sector • January 2018 5 Emergence of the The post-war influx of European immigrants and returning soldiers table wine culture into Australia, also brought with them new skills in wine production. As new The influx of immigrants at the end of techniques were introduced and the Second World War had a profound developed, and as Australians gained impact on Australian music. The unique a taste for the newer, finer wines, the sounds of Australian rock, pop, folk, and table wine culture emerged in the jazz reflect the arrival of people from 1960s. Until then, sweet and fortified all around the globe, particularly from wines dominated the Australian wine Europe in the 1950s and 60s. However, landscape. the most influential event occurred in 1964 when the biggest band in pop While the renaissance of table wines history arrived on our shores for its occurred in the 1960s, the quality of only visit, causing scenes of fan frenzy Australian table wines was recognised that have never been repeated in in the 19th century. During a blind Australia. The huge crowds that turned taste at the 1873 Vienna Exhibition, out to welcome The Beatles (300,000 in French judges praised some wines Adelaide) signalled a new dawn for our from Victoria; however, they withdrew pop music culture. their laudatory remarks when they discovered that the wines were There was an explosion of new bands Australian and not French. The judges in the wake of The Beatles such as The protested on the grounds that ‘wines of Missing Links, The Twilights, the Masters that quality must clearly be French.’ Apprentices, The Loved Ones and the Bee Gees. The Easybeats were the most Australian wines may have garnered successful and influential act of the some insulting remarks at the Vienna era. The band had a string of local hits Exhibition, but the sector continued to including She’s So Fine, I’ll Make You win wine awards and receive global Happy, Wedding Ring and Sorry before praise. In 1878, a Shiraz from Victoria moving to England and releasing the competing in the Paris Exhibition was worldwide hit Friday on My Mind in likened to the French Chateau Margaux late 1966. and was described as a ‘trinity of perfection.’ One Australian wine won a gold medal at the 1882 Bordeaux International Exhibition and another received a gold medal at the 1889 Paris International Exhibition.
‘I drank the wine they had left on my table’ Just Like Fire Would, The Saints
The Easybeats
6 State of the Sector • January 2018 • Wine Australia The red wine boom In the 1970s, Australian music found its own voice, moving beyond English and American influences and creating a uniquely Australian sound. Skyhooks’ landmark debut album Living in the ‘Now listen, 70s, released by Mushroom Records in 1974, became the highest selling oh we’re Australian album in history to that point. This influential album proved to Australians that it was possible to be steppin’ out’ both alternative and popular and that it Eagle Rock, Daddy Cool was OK to sing about local places and Living in the 70s by The Skyhooks experiences. Such was its impact that six tracks from the album were banned Uniquely big and bold can also describe In the 1970s, red wine consumption on commercial radio in Australia. Australian wines in the 1970s. The table overtook sherry in Australia and the As punk music emerged in the mid-70s, wine culture of Australia continued fruit-forward styles that emerged began The Saints and Radio Birdman flew the to expand, led by a boom in red wine to capture international attention. The flag of a more rebellious, do-it-yourself sales, particularly bold and flavoursome end of this decade brought a preference rock attitude. September 1976 marked red blends such Cabernet Sauvignon/ for dry table wines and the emergence a watershed moment in Australian Shiraz. Sales of Australian red wine in of Chardonnay. music history. The Saints, at the time the domestic market increased from Wine regions expanded and were re- an unknown band from the suburbs of 10 million litres in 1964–65 to 36 million planted, while others were established Brisbane, released their self-produced litres in 1974–75, an annual average by new generation pioneers in debut single (I’m) Stranded. Amazingly, increase of 14 per cent per annum Yarra Valley, Beechworth, Canberra the record earned rave reviews in over the decade. In 1959, 69 tonnes District, Orange, Mudgee, Margaret England, and was dubbed the ‘single of of Cabernet Sauvignon were crushed River and more. A generation of this and every week’ in the UK’s Sounds in Australia — by 1979 the crush had Australian winemakers experimented magazine. With its central theme of grown to 25,000 tonnes. Over the same with new winemaking processes and alienation, it became an anthem for a period, the Shiraz crush grew from sophisticated blending techniques. generation of young people at a time 18,200 tonnes to 72,000 tonnes. when Australia shared its national anthem with Britain. But arguably more influential than the song itself was the Figure 1: Red wine sales in Australia (million litres) – 1955–1975 Saints’ fierce independence. There 40 were no venues to play in Brisbane, so the band hired out suburban halls. No 35 local record company was interested in what they were doing, so they hired 30 out a local studio, paid for the recording themselves and put out the song on 25 their own label, Fatal Records. Today, 20 this same attitude can be observed in
Australia’s young winemakers. 15 The 1970s also saw Australia give birth 10 to something uniquely big and bold in music — Aussie pub rock, where 5 AC/DC, The Angels, Cold Chisel, and Rose Tattoo, among others, created a 0 new hybrid of blues-oriented rock music 1971–72 in the nation’s pubs and clubs that 1955–561956–571957–581958–591959–601960–611961–621962–631963–641964–651965–661966–671967–681968–691969–701970–71 1972–731973–741974–75 influenced musicians here and overseas Source: Australian Bureau of Statistics for generations.
Wine Australia • State of the Sector • January 2018 7 Sunshine in a bottle – The evolution of Australian wine continued in the 1980s with a swing Figure 2: Chardonnay tonnes Chardonnay boom to white wine led by the rich and oak- crushed – 1979 v 1989 driven Chardonnay styles. Everything Australian music really flourished in 28000 was big in the 80s — expense accounts, the 1980s. The Sunnyboys, Hunters and shoulder pads and Chardonnay. With Collectors, Paul Kelly, The Birthday generous oak exposure, Chardonnays Party, Australian Crawl, Divinyls, the of the era were deep yellow, with Church, Hoodoo Gurus and The Stems butter on the palate and toffee on led the way. the nose. The popularity of Australian Some bands, like AC/DC, Men at Chardonnay with consumers led to Work, INXS, and Midnight Oil, achieved an explosion in plantings — during international success. AC/DC’s Back the decade the Chardonnay crush In Black released in 1980 is the second increased from 1,000 tonnes to biggest-selling album of all time after 28,000 tonnes. Michael Jackson’s Thriller. The growth in white wines, especially Men At Work’s album Business As Usual Chardonnay, was driven by a was a massive global hit in 1982. In continuing change in social attitudes the USA, it spent an unprecedented to table wine consumption as well as 15 weeks at number 1 on the USA the rapid rise of the soft-packs (or 1000 Billboard 200, led by the ubiquitous casks). Soft-packs broadened the single, Down Under. It was arguably consumption base in Australia as beer the musical equivalent of Yellow Tail. or spirits drinkers became wine drinkers. 1979 1989
The global success of Midnight Oil’s Australian wine was also finding Source: Australian Bureau of Statistics Diesel and Dust in 1987 is remarkable. success overseas, particularly in the UK. It is a concept album about the Varietal wines replaced generic terms struggles of Indigenous Australians and like claret and hock. While big brand Australia broke new ground by reaching environmental issues. In 1989, Rolling names dominated, a boutique winery out to consumers to actively help Stone magazine ranked it No.13 on their culture also emerged. Australian wines them understand what was in the list of the 100 best albums of the 1980s. became established in the traditional bottle — varietally led, and with taste markets of Europe. The world was descriptors on back labels. Australia embracing clean and fresh Australian made wine readily understandable and wines with fruit-driven white styles and ‘accessible’, by changing the language robust reds. of wine of the time.
‘Something shimmering and white’ Under The Milky Way, The Church
Diesel and Dust by Midnight Oil
8 State of the Sector • January 2018 • Wine Australia ‘Do you remember, Period of extraordinary export growth nothing stopped us in A wave of Australian musicians emerged in the 1990s who changed Australia’s the field, in our day’ musical landscape and looked towards Australian culture for inspiration. Acts Flame Trees, Cold Chisel such as Powderfinger, Silverchair, You Am I, Died Pretty, Tumbleweed, Clouds, Magic Dirt, Spiderbait, Custard This could describe Australia’s 2007, the Australian wine sector more and The Cruel Sea took alternative winemakers — they are free to than tripled production from less than music to the local masses aided by the produce unique and artisan wines 400 million litres to 1.2 billion litres and success of local music festivals such that express the wine’s terroir as well it achieved total revenues of $5 billion as the Big Day Out. as their own creativity. in 2007. The value of exports grew from $212 million to $3 billion. Australia stood out from many other The 1990s showed the world that countries in the 1990s as many bands Australia was adept at blockbuster, The sector built an enviable global created new sounds by blending full-flavoured, densely packed, powerful reputation for producing quality wine different styles of music. In 1991,Treaty , red wines. Robert Parker Jr, the famous and created strong export markets Yothu Yindi’s song of reconciliation, USA-based critic, with praise and particularly in the UK, USA and became the first track recorded by high scores for the wines of this style, Canada. Australia had conquered the predominantly Indigenous performers bolstered the image and supported mainstream consumer market through to make the charts. The song was Australian winemakers into reinforcing showcasing world-class wines that sung almost entirely in the Aboriginal this and related styles. Intense, expressed the vast diversity of talented language Gumatj. It was a true concentrated examples of Shiraz, winemakers and their unique regional collaboration, written by Paul Kelly, Grenache and red blends dominated aspects. Australian wines were marked Yothu Yindi and Midnight Oil’s Peter the Australian fine wine story. for their elegance and longevity and Garrett. The dance-oriented Filthy established a reputation for winemaking Global demand for Australian wine Lucre remix peaked at number 11 on the excellence that cannot be duplicated created a boom in new vineyard Australian charts, spending 22 weeks in anywhere in the world. the charts. plantings in the late 1990s. Australian exports grew at extraordinary rates However, a storm was coming over Regurgitator is arguably the best through to a peak in 2007. From 1991 to the horizon. example of an Australian band of the era, blurring genres to produce unique music. Formed in Brisbane in 1993, Regurgitator is one of the most original Figure 3: Australian exports – 1991 to 2007 (A$ billion FOB) bands Australia has ever produced and it defies categorisation. National 3.5 broadcaster Triple J has described Regurgitator as a ‘machine that 3.0 absorbs popular music in all its dizzying permutations, then spews it back out. 2.5 This technicolour approach means that Regurgitator are free to play whatever they want — as long as it’s delivered 2.0 with a nod and a wink.’ 1.5
1.0
0.5
0.0 1992 1994 1996 1998 2000 2002 2004 2006
Source: Wine Australia Regurgitator
Wine Australia • State of the Sector • January 2018 9 The perfect storm The dawn of the new millenium saw the emergence of two things that had a profound impact on Australia’s talented musical artists — the advent of reality television and the demise of live music venues.
The advent of reality television in the Midnight Oil performing live 2000s affected the ability of young and upcoming independent acts to gain a recording contract and airplay. The first of the music reality programs, Popstars Live, aired in Australia on ‘We can lock away the 8 February 2000 and forever changed the musical landscape in Australia. Thousands of young musicians/singers bad memories together, from all over Australia competed for a record contract through stages of close the doors to the elimination. The first series of Popstars was one of the year’s highest rating TV programs, at its peak attracting an past forever’ audience of over 2.5 million viewers. Alone With You, The Sunnyboys The pop group Bardot, created from the Popstars television program, achieved a number one hit single, two additional However, a combination of government As a result, live music venues began gold singles and a number one album regulation, insatiable industry a steady decline. For example, there in Australia. Popstars was the precursor profiteering and disregard for the value has been a 40 per cent decrease in of other global reality music programs of music started to strangle Australia’s revenue from live performance venues such as the Australian Idol, The Voice, live music industry, leaving a vibrant in the Sydney CBD lockout areas, X Factor and Australia’s Got Talent. and diverse culture gasping for breath. according to data by music body APRA At the same time as reality TV was Musicians found themselves victims ACMOS. The figures, collected from taking over our television screens, there of a financial squeeze caused by the 1 February 2013 to 31 January 2015, was a steady decline in live music progressive impact of regulations show a decline in ticket sales, spending venues in Australia, once the lifeblood imposed on venues. Stricter drink- on live music and attendance at dance of Australian musicians. Until the 2000s, driving laws combined with the home venues with a recorded music licence. hundreds of local artists were playing entertainment boom saw patron This is not a uniquely Australian in venues across the country, driving numbers slump. Already desperate phenomenon: it’s happening worldwide. a booming local industry and birthing to counter this decline, venues were Australian icons like AC/DC, INXS and instead smashed when increased Midnight Oil. residential development brought a new issue: noise complaints. Inundated by angry residents seeking quieter nights, councils succumbed to lobbying and introduced noise restrictions on inner-city venues. Owners were confronted with a financial dilemma: soundproof their businesses at an astronomical cost, restrict live music, or shut their doors.
10 State of the Sector • January 2018 • Wine Australia Figure 4: Australian exports – 2007 to 2013 (A$ billion FOB)
3.5
3.0
As the Australian wine sector reached its peak in sales volume (and, in recent 2.5 history, profitability) a ‘perfect storm’ began. From 2007, forces combined to hit the sector, which saw profitability fundamentally lowered for many 2.0 participants over the next six years. The factors included: • The global financial crisis (GFC) that hit world markets starting in August 1.5 2007 and accelerated through 2008 2007 2008 2009 2010 2011 2012 2013 — coinciding with a significant fall Source: Wine Australia in Australian wine exports. Export volumes recovered through 2009, only to fall again in 2010 and 2011. The ‘storm’ intensified due to the From 2007 to 2013, export volumes fell • Fall in demand for Australian wine in oversupply of wines that resulted by 100 million litres from 786 million to key markets, especially the USA, UK from excess planting and winemaking 686 million litres and value declined by and Canada, from 2007 to 2012. capacity given the unexpected fall $1.2 billion from $3 billion to $1.8 billion. • From 2004, the Australian dollar in export demand and rise in the Exports to the USA were hardest hit over rose steadily from 80 US cents to Australian dollar. This created a series of this period. From a peak of $960 million almost parity in July 2008. A sharp responses with negative implications. A in 2007, Australian exports to the USA fell fall to 62 US cents in August 2008 market for uneconomic grapes and wine to $360 million in 2013. preceded a steady climb to parity developed ensuring supply was slow in November 2010. to respond to the fall in demand and Domestic retail consolidation, supplier profitability. This put further price and management and vertical integration volume pressure on wine producers and accelerated through the period. educated the market to expect lower Woolworths accelerated its growth of priced wine, damaging the Australian Dan Murphy’s and acquired Langton’s wine brand and the demand for exports. in 2009 and Cellarmasters in 2011. As a result: Wesfarmers acquired Coles in 2007 and • Retailers were able to source cheap began to transform its management, wine to support their private label and strategy and performance — including promotional strategies. its liquor business. • There was a flood of cheap Australian wine onto export markets, much of it The situation was not helped by in bulk or packaged without proper low domestic demand growth and branding support. increasing imports. • Winemakers accessed cheap fruit to maintain or increase wine production to amortise fixed costs — this provided a market for uneconomic grapes, and put further price and volume pressure on winemakers. • There was an increased focus by some participants on ‘leveraging’ the Wine Equalisation Tax rebate.
Wine Australia • State of the Sector • January 2018 11 ‘Time for a cool change, I know that it’s time
Emerging from the storm for a cool change’ Cool Change, Little River Band On the musical front, the last decade has seen the biggest changes in Australian music, not just in the broadening styles and their popularity Figure 5: Australian exports – 2013 to 2017 (A$ billion FOB) but in the way music is recorded, listened to and distributed. Digital 3.0 downloading and music streaming have fundamentally changed the way people listen to and access music. Jon Rose, acclaimed improvising violinist and instrument maker, explains the impact from his perspective, ‘Even an 2.5 obscure artist like myself can find a dozen websites my material can be downloaded from for free, or for a few dollars. I don’t have the time or the resources to go chasing after these 2.0 people — it’s how it is. We accept, we adapt, or we try to get a real job’.
While the technology has changed, Australians continue to produce amazing music. We’ve had international acclaim 1.5 for acts across many genres, including 2013 2014 2015 2016 2017 Pnau, Vance Joy, Chet Faker, Tame Source: Wine Australia, 12 months ended September 2017 Impala, DMA’s, Meg Mac, Birds of Tokyo, Flume, The Presets and Gang of Youths, to name a few. The Australian wine sector has also A new generation of experimental Over the last decade, Australian seen significant change. We once led winemakers began to emerge, with hip-hop found its voice through the world but ‘the perfect storm’ saw artisan production and organic/ Hilltop Hoods, The Herd, Bliss n Eso, the Australian grape and wine biodynamic credentials being explored. Urthboy, Tkay Maidza, 360 and, community retreat into defend or Today, there’s a particularly strong most significantly, A.B. Original. survival mode. However, it was during focus on freshness, natural acidity, and Both members of A.B. Original are these tough times that a counter regional distinction. Australian wine has Indigenous Australians. Their music culture began to arise. Conversations never been more exciting, diverse or is overtly political and has been shifted to Australia’s often-overlooked focused on improving its own culture. described as ‘angry, polemical, cool climate wine regions. Whole bunch brutally frank and meant to inspire fermentation, lower alcohol, earlier This focus is resonating around the a response, good or bad’. picking, brighter red wines styles world. Since falling to a low in 2013, and a knack for seeking out the best Australian exports have steadily grown. from old vines, unique sites, unsung In 2017, the value of Australian wine regions and a mesh of new, interesting exports grew by 15 per cent to grape varieties outside of the noble $2.56 billion and volume increased varieties emerged. by 8 per cent to 811 million litres. The average value of exports grew by 7 per cent to $3.16 per litre FOB, the highest since the equivalent period in 2009.
A.B. Original
12 State of the Sector • January 2018 • Wine Australia Reasons to believe
Despite the challenges faced by the There can be no doubting our music industry through the digital age credentials: and the decline in live music venues, • Australia is home to talented Australian music has never been more artisanal winemakers attuned to diverse or exciting with many artists their vines and place and skilled from a wide range of genres finding in their craft. success locally and internationally. • Australia is home to distinctive From the commercial pop of Sia to the terroirs, exceptional vineyards, blissed-out psychedelic rock of Tame talented winemakers, expressive Impala, Australian musicians today wines and a new generation are continuing to build on the past improving and carrying on the while remaining authentically and legacy of their predecessors. uniquely Australian. • Australia’s food and wine offering is The Australian grape and wine world class. Research undertaken by community has endured a tough period Tourism Australia shows that people but has emerged stronger than ever, who have visited Australia rank us ready for a new, sustained period of as number two in the world for our prosperity. With grapegrowers and food and wine experiences, behind winemakers focused on wines that are France and ahead of Italy (third). an authentic representation of their place, the Australian dollar expected to remain relatively low and perceptions of Australian wine improving (among trade and consumers), it’s time for the world to embrace Australia’s unique and exceptional premium wines.
‘There’s no time like the right time, and that’s now’ The Right Time, Hoodoo Gurus
Wine Australia • State of the Sector • January 2018 13 ‘Playing in the dirt, we find the seeds of fun’ Kiss The Dirt, INXS
Diverse and authentic Songwriters are often the unsung heroes of the Australian music industry. They are the Australians who make the world sing while staying behind the scenes. There’s a rich history of Australians who’ve made their fortunes being the person putting words into a singer’s mouth. Often songwriters are happy to let those stars take the glory, happy to stay out of the limelight. They love to make music and find the right voice to lift their song to the next level. The songwriters may not be household names but their songs are.
One example is Mike Chapman, who Coonawarra soil dominated the glam rock scene of the early 1970s either writing or producing Australia has some of the oldest grape The evolution of Australian wine can hits for Suzi Quatro, The Sweet, Racey, vines in the world, dating back to the be seen through the abundance of Mud and Smokie with musical partner 1840s. Australia was one of only two varieties available and a wide spectrum Nicky Chinn. He later produced countries in the world whose vines were of different wine styles from the classic classic albums for Blondie, The Knack, not destroyed by phylloxera in the to the contemporary. Australian Crawl and Baby Animals, as nineteenth century. In the right grower’s Australia has distinctive terroirs and our well as hits for Toni Basil, Pat Benatar hands, old vines give concentration winemakers embrace their differences and Tina Turner in the 1980s. His list of of flavour, depth and complexity. to produce unique styles and varieties. hits is extraordinary, including Mickey Linked to lower yields, old vines give a (1982), Love Is A Battlefield (1983), Can profound expression of the place where While production is dominated by the the Can (1973), The Ballroom Blitz (1973), they are grown. likes of Chardonnay, Shiraz, Cabernet Living Next Door to Alice (1976), Lay Your Sauvignon, Grenache and Semillon, We now grow more than 100 different Love on Me (1979) and The Best (1989). there’s been a recent surge of interest grape varieties in 65 wine regions Yet Chapman is not in the Australian in ‘alternative’ varieties that are often across the country. Australia has Recording Industry Hall of Fame. well suited to Australia’s climate; these some of the most diverse climates for include varieties like Fiano, Nero d’Avola The songwriters of the Australian wine grape growing in the world. These and Grüner Veltliner. sector are the growers whose grapes include ultra-cool to moderate-cold underpin Australia’s rock star wines. regions, high elevations, warm climate The imagination of Australian Australian wines express the diversity subtropical regions, coastal and inland winemakers and curiosity of Australian of the people who craft them and the wine-growing regions. grapegrowers means that many unique regional characteristics of their Southern Mediterranean varieties have Australia has some of the oldest and origins. Australia’s climate, unspoilt land been very successful and plantings of most varied soil profiles on Earth, from and ancient geology is truly unique emerging varieties are increasing. rich and fertile through to rugged and and as a result produces an incredibly desert-like, with high mineral content diverse range of wine. Australia’s wine regions are scattered and arid areas. with multi-generational families whose long-standing dedication provides Combine the world’s best viticulture inspiration, leadership and custodial and oenology teaching with a diverse care of some of the country’s most landscape and it’s no surprise that precious vines and wines. Australians craft wines that are truly an expression of place.
14 State of the Sector • January 2018 • Wine Australia The Australian grape and wine while winery productivity and wine community is open to new and old quality have continued to improve. ideas. Our winemakers ‘push the We lead the world in innovation. envelope’. They are innovative, The vast majority of carefully tended defying stereotypes and challenging vineyards and nurtured fine wines in the norms from varietal composition this country are the consequence of a and winemaking techniques through huge investment in capital and human to packaging. commitment to knowledge and its Australian winemaking techniques application in eliciting the very finest have adapted over time and are expressions of the noble grape varieties Creative continually evolving. from the unique Australian terroirs to which they are naturally suited. Australian musicians are among the Australia is an innovative wine country most creative in the world, taking unafraid to make adjustments to To quote esteemed Japanese wine influences from around the world and enhance quality and make great wine journalist Makiko Morita, ‘In Australia, producing something unique. A perfect that people enjoy drinking. Australian producers with different backgrounds example of this is Since I Left You, the wines are emerging with a strong focus are aiming for “wines that only I can debut album from the Avalanches. on freshness, natural acidity, balance make” without being restrained by Released in 2000, the album contains and regional distinction. traditions or law, nor concerned about over 900 individual samples, from competition or Mr Parker’s reviews. Australia is recognised as a world long-forgotten R&B records to golf This is such a pleasure, almost like leader in many aspects of grape and instructionals to Madonna’s ‘Holiday’. borderless music. There’s the punk that wine production driven by a significant But what really makes this album destroys stereotype, the rock full of and sustained investment in research brilliant is not so much the number or rebellion, the exciting pop and rather and innovation. Our research funding quality of the samples used as the way sexy funk. There is also the classic that is different to other approaches used that they’re employed. The Avalanches interprets the tradition freely, as well as around the world. The Australian wine have managed to build a totally unique hip-hop that takes anything fun.’ context for all these sounds, while still sector combines their resources into allowing each to retain its own distinct a collective R&D investment pool, flavour. As a result,Since I Left You which is matched dollar for dollar sounds like nothing else in the world, by the Australian Government. This past or present. It was critically and collective and cooperative investment commercially successful, peaking in the in innovation is one of the reasons top 30 on the Australian Albums Chart, Australia is now established as a number 12 in Norway, number 8 on the leading wine producing nation. We UK Album Charts and, in the USA, at have internationally recognised grape number 10 on the Top Electronic Albums and wine research organisations and chart and in the top 40 on the Top researchers, including the Australian Heatseekers chart. Wine Research Institute (AWRI), the Commonwealth Science and Industrial Like Since I Left You, wine is also greater Research Organisation (CSIRO) and than the sum of its parts. There’s the South Australian Research and nothing like Australian wine because Development Institute (SARDI), and there’s nothing like the people and the a strong focus on innovation. Our Since I Left You by The Avalanches places of Australia. There’s freedom, commitment to R&D has seen our creativity and a desire for excellence in vineyards become more drought- the Australian wine community. tolerant and pest and disease resistant
‘There’s a warmth in the eyes and a clearness of thought’ The Deepest Sighs, The Frankest Shadows, Gang of Youths
Wine Australia • State of the Sector • January 2018 15 ‘Time was right because you told it to, Award winning I really like you’ While musicians don’t make music Lock It, Falling Joys to receive accolades, international awards do highlight the global reach of Australian artists and they can help generate more airplay and sales, Decanter World Wine Sommelier Wine Awards 2017 especially in the USA. Awards 2017 The Sommelier Wine Awards (SWA) is In 2012, Gotye became the second The Decanter World Wine Awards is the only competition aimed solely at Australian artist ever to win the the world’s largest and one of the most the UK on-trade. Grammy for Record of the Year for influential wine competitions. In 2017, Somebody That I Used to Know — the While Australian wine has been clearly more than 17,000 wines were judged number one in the UK off-trade for first being Olivia Newton-John in and awards given. 1974 for I Honestly Love You. In 2006, 15 years, Australia trails France and Wolfmother won the Grammy for best The world’s biggest three producers Italy in the on-trade. Hence the SWA is hard rock performance while in 2017, — France, Italy and Spain — walked an important platform to help boost the Flume won the Grammy for best dance/ away with the most awards. However, Australian category in the UK on-trade electronic album. In 2017, Sia picked up Australia outperformed all three plus market. The results of the 2017 SWA have two nominations in the Best Pop Duo/ competitors from Chile, Argentina, the just been released. Group Performance category for Cheap USA and South Africa in the share of The following medals are awarded: Thrills, as well as Best Pop Vocal Album gold and above awards. • Gold for her seventh studio album, This Is Of the 981 awards Australian wines Acting. Staying on the dance scene, a • Silver received, 6.7 per cent were gold and remix of local songwriter Ry X’s Only by • Bronze above (see Figure 6). In comparison, USA producer Kaskade and Melbourne’s • Commended. of the 3,781 awards France received, Lipless scored a nomination in the Best 3.6 per cent were gold and above. Italy Remixed Recording category in 2017. In the 2017 SWA awards, France, Italy received 2,802 awards, 2.7 per cent and Spain received the most SWA Winemakers also don’t make wine to of which were gold and above. medals, no doubt due in part to the receive awards, however the results fact that they produce far more wine By variety for Australia, the most gold of two recent international wine than other countries and entered more and above awards were achieved by: competitions — the Decanter World wines in the competition. However, • Shiraz (18) Wine Awards 2017 and the Sommelier like the Decanter Awards, Australia Wine Awards 2017 — highlight the • Chardonnay (12) outperformed all key competitors in its growing positivity about Australian • Cabernet Sauvignon (11) share of gold medals (see Figure 7). wine around the world. • Riesling (4) Of the 172 medals Australia received, 18 per cent were gold medals, placing Australia ahead of France (17.4 per cent), Italy (16.4 per cent) and South Africa (15.8 per cent).
Fifteen wines received Food Match medals of which Australian wines won three, behind only Italy with five.
Shiraz achieved the most golds for Australia with eight, ahead of Chardonnay with five and Cabernet Sauvignon with three.
16 State of the Sector • January 2018 • Wine Australia Figure 6: Share of gold and above awards at the Decanter World Wine Awards 2017
6.7%
5.9%
4.2% 4.0% 3.9% 3.6% 3.5%
2.7%
Australia Argentina Chile Spain South France USAItaly Africa
Figure 7: Share of gold medals at the Sommelier Wine Awards 2017
18.0% 17.4%
16.4% 15.8%
14.6%
12.0% 11.5% 10.8%
Australia FranceItaly South Spain ChileUSA Argentina Africa
Wine Australia • State of the Sector • January 2018 17 Influential As with anything unusual and exciting, Australian music has influenced musicians around the world looking for a different angle for their own music. From Grainger through to The Avalanches and beyond, Australian music has continued to assert itself into the world music scene.
The great Norwegian composer Edvard Grieg once wrote of Percy Grainger: ‘Even among the very greatest pianists, The Go-Betweens I do not know one that I could compare with him. He has actually realised my 30 greatest Australian songs. The song Australian ingenuity in winemaking has, ideals of pianism.’ In the 1950s, Johnny was also selected by NME writers in and continues, to influence the world O’Keefe earned global acceptance their ‘100 Best Indie Singles Ever’ in 1992. of wine. Penfolds Grange is arguably for the Australian version of rock ‘n’ Australia’s most famous wine and the Perth band, The Scientists, formed roll, his influence spawning the Iggy story of its creation by legendary in 1980, were pioneers, creating a Pop cover of Real Wild Child (Wild winemaker Max Schubert with the genre that changed the global One). In the 1960s, The Easybeats, in help of brilliant research chemist musical landscape forever in the contrast to some of their English and Ray Beckwith is a modern tale of early 1990s — grunge. The Scientists American contemporaries, provided imagination, a battle against the odds were much more influential than their positivity to the international music and redemption. minimal commercial success would scene, like colour TV in an age of black indicate. Their sound predated Max Schubert reminisced about the and white. AC/DC followed in their Nirvana by a decade. influence of Grange in a presentation to footsteps, becoming the most influential the first Australian National University Australian rock band ever. There is Australian musicians continue to Wine Symposium in Canberra in 1979. no end to the artists who quote AC/ influence the global music scene. For He said, ‘I would like to express the hope DC as an influence. Chrissy Amphlett, example, Perth’s Tame Impala, like that the production and acceptance frontwoman of the Divinyls, was a many Australian bands in history, is of Grange... as a great Australian wine powerhouse performer and paved producing music that is ahead of the have proved that we in Australia are the way for generations of female curve. Ingenuity and experimentation capable of producing wines equal to artists who followed. with different effects pedals has led to the best in the world. But we must not be its songwriter, producer and performer, While international commercial afraid to put into effect the strength of Kevin Parker, creating new and unique success has eluded many Australian our own convictions, continue to use our sounds. This, combined with a strong artists, they have had a profound imagination in winemaking generally, sense of melody in his music, has made influence on musicians around the and be prepared to experiment in order Tame Impala one of the most influential globe. Influential groups of the 1980s, to gain something extra, different and musical acts working today. like The Go-Betweens, The Triffids and unique in the world of wine.’ Nick Cave and the Bad Seeds, were less commercially successful but were critically lauded in the UK and the USA. Robert Christgau, critic for the New ‘Change in mood, I York-based Village Voice, once wrote that Grant McLennan and Robert Foster of The Go-Betweens were the greatest can sense it, changing songwriting partnership working at the time. McLennan’s song, Cattle and everyday’, Cane, about growing up in Queensland, was named in the Australasian Change In Mood, Kids in the Kitchen Performing Rights Association’s top
18 State of the Sector • January 2018 • Wine Australia Australia has produced world class Perceptions are shifting in large parts Consumers are recognising this fact, wine for much of its post-European thanks to Australia leading with our best with the share of consumers believing history, but we haven’t always been wines. Now more than ever consumers this up 11 per cent in the last 7 years widely recognised on the global stage. regard Australia as one of the key to 83 per cent, while the lift among The huge success of a handful of countries for consideration when non-consumers increased at even major brands often obscured to the selecting an expensive or fine wine. greater rates (up 40 per cent). everyday consumer what the smaller Over the last seven years, the share of Our wines have always been viewed wineries were doing. However, the global wine consumers viewing Australia as a as value for money, punching well consumer is beginning to discover that valid choice has climbed 16 per cent for above their weight for quality in any there is much more depth to Australian existing consumers, and again, the news price range. In 2010, three quarters of wine than they had perceived before. is getting through to non-consumers of Australia’s consumers viewed our wines Consumer research shows Australian Australian wine, with the share of non- as such. As of 2017, this had improved wine shines brightly as value for money regular consumers climbing a whopping a further to 83 per cent with a larger and our reputation as an expensive/fine 57 per cent. More encouragingly, the lift among non-consumers. Maintaining wine is on the rise. shift has been even more pronounced the perception of good value for in Australia’s traditional major markets Globally, perceptions of Australian money while our consumers move of UK and USA where Australia has wine have improved measurably. up the quality scale is reassuring for often been pigeon-holed only as ‘value Research from Wine Intelligence shows consumers and producers alike. for money’. that among existing consumers of Australian wine, quality perceptions Australian chefs, baristas and food have increased three per cent in producers have been playing a more the last five years. Furthermore, our prominent role in global cuisine trends. consumers are converting their friends, Although Australia’s multicultural history as perception of quality among non- does not lend itself to a particular regular Australian wine consumers has style of food, the mixing of cultures climbed by an impressive nine per cent has also brought with it a fusion of over the same period. food from across the globe that can be perfectly matched with Australian wine.
Figure 8: Share of regular wine drinkers viewing Australia as an expensive/fine wine
90% 2010 201
80%
70%
60%
50%
40%
30%
20%
10%
0% China Canada UK Singapore USA Hong Kong Japan Quebec (excl. Quebec)
Source: Wine Intelligence
Wine Australia • State of the Sector • January 2018 19 ‘Going up and down and back again’ Up & Down & Back Again, Powderfinger
Australian wine production is on the rise while global wine supply has tightened, providing an opportunity for Australian wine to support the increasing global demand for premium wines.
World wine production in 2017 is expected to be 24.6 billion litres — 2 billion litres (8 per cent) below 2016 and the lowest since 1961, according to the recent announcement by the International Organisation of Vine and Wine (OIV). This equates to 222 million cases of wine not being available. To put this in perspective, Australia’s total production in 2016 was 1.3 billion litres or 144 million cases.
The OIV reports that there were falls in the three top producing countries Clarity Records, Adelaide — Italy, France and Spain — which recorded historic low harvests, while Chile had another small year compounding an existing short supply. Argentina recorded significant growth from a very low crop in 2016, but 2017 Resilient is still well below the long-term One of the great tragedies of the average. The USA’s harvest is slightly digital age has been the demise of down on 2016. the independent record store, the last This drop in global production comes refuge of the music-obsessed freak. A at a time when consumption is on the real place run by real people where you rise after a period of decline following can peruse the racks and touch and see the Global Financial Crisis. The OIV an album and the artwork. Who doesn’t estimates that consumption will be love the smell of vinyl in the morning? between 24.1 and 24.6 billion litres in While record stores are an endangered 2017 — which will bring it equal to, or species they are not yet extinct. The above, production for the first time annual Record Store Day, first held in ever, putting pressure on existing global the USA in April 2008, is now a global stocks and prices. phenomenon and has helped record stores survive. There is a vinyl revival The lowest global harvest since 1961, — sales of vinyl increased for the sixth combined with the increase in global consecutive year in 2016 to reach a consumption, presents a window of 25-year high. This was also the first opportunity for Australia. This supply year that spending on vinyl outstripped pressure in the market may provide that spent on digital downloads. The a launching pad to establish new boost in vinyl sales is part of a wider products firmly in the market, which shift in the fortunes of the music may then have an advantage over industry back towards making a profit. products trying to re-enter.
20 State of the Sector • January 2018 • Wine Australia Figure 9: Australian wine stocks, production and sales over time