2017-2021 VICTORIAN INDUSTRY DEVELOPMENT STRATEGY

Photo credits Contacts Cover: Mount Langi Ghiran Email: [email protected] Phone: 136 186 Brown Brothers: p. 28, 30. Chalmers For more information: http://agriculture.vic.gov.au (Adam Hobbs, One Idea): p 14, 22, 25, 26, 40–41. Mount Langi Ghiran: p 8, 38. Pizzini Wines: p 17. Published by the Department of Economic Daylesford & Kyneton – food and wine of the region, Development, Jobs, Transport and Resources Mark Chew 2012 p 34. 1 Spring Street , 3000 Telephone (03) 9208 3799 Wine Industry Ministerial Advisory Committee Members who contributed to development of the strategy: May 2017 Ms Kim Chalmers (Chair), Chalmers Wines Authorised by the Hon. Jaala Pulford MP Mr John Harris (Deputy Chair), Mitchell Department of Economic Development, Harris Wines Jobs, Transport and Resources 1 Spring Street Melbourne Victoria 3000 Mr Damien Sheehan, Mount Langi Ghiran Wines Telephone (03) 9651 9999 Ms Natalie Pizzini, Pizzini Wines © Copyright State of Victoria, Department Mr Chris Dent, Gorton Drive Estates of Economic Development, Jobs, Transport Dr Mark Krstic, Research Institute and Resources 2017 Mr Neil Burgess, Glenelg Shire Except for any logos, emblems, trademarks, Mr Leigh Devine, Timmering Wines artwork and photography this document is Ms Nikki Palun, Octtava Wines made available under the terms of the Creative Commons Attribution 3.0 licence. Ms Katherine Brown, Brown Brothers Mr Michael Dal Zotto, Dal Zotto Wines This document is also available Ms Kate McIntyre, Moorooduc Estate in an accessible format at Mr Andrew Clarke, Yering Station economicdevelopment.vic.gov.au Ms Angie Bradbury, Dig&Fish (retired from MAC June 2016) CONTENTS

Minister’s Foreword 4 Wine Industry Ministerial Advisory Committee Chair’s Foreword 5 Executive Summary 6 About The Strategy 9 Victoria’s Wine Industry Is Vital For Regional Economies 10 Industry Snapshot 11 Wine 12 Challenges 14 Industry Opportunities 16 Critical Challenges 18 Adapt Support adaptation to a new industry operating environment 20 Visit Increase visitation and expenditure within Victorian wine regions 26 Trade Develop profitable and sustainable export markets 30 Lead Strengthen industry structure & coordination 34 Towards Sustainable Prosperity 38 MINISTER’S FOREWORD

4 Victoria’s wine industry contributes $7.6 billion to our state economy and directly employs nearly 13,000 people. Many of these jobs are in regional Victoria. Victoria has more cellar doors than any other state, creating opportunities for visitors to experience our diverse and authentic quality wine experiences across the state and contribute to the liveability and vibrancy of our regions. Victoria produces wines for every palate and budget, and our wines are on-trend with consumer preferences both here and overseas, yet our export markets do not always know the full story behind Victorian wines and our passionate, genuine and creative winemakers. We have an opportunity to grow our reputation for quality wines in new and reinvigorated markets by telling the stories of our wines, the places they are grown and the people who make them. Victoria’s wine businesses operate in a highly competitive global market, in which Victoria has less than a one per cent share. We need to be agile and innovative in finding ways to get the best value from our share. Our grape growers produce an array of varieties under conditions that are complicated by biosecurity challenges and the impacts of climate change. The Victorian Wine Industry Development Strategy 2017–2021 pinpoints key challenges and opportunities right across the wine value chain and sets out strategic priorities for the industry. The strategy supports our growers and wine businesses with skills and R&D investment to tackle challenges in the trading and production environments, initiatives for the wine industry to better connect with the food and regional tourism sector, and provides a framework for telling the stories of our wine in export markets. Critically, it supports the industry to develop a model of representation and coordination that will enable industry players to work together and with the Victorian Government for the benefit of the whole Victorian wine industry. The Victorian Government and the Wine Industry Ministerial Advisory Committee have worked together to prepare this strategy. It includes the input of wine industry stakeholders gathered through workshops across the state and interviews with representatives of industry bodies. We look forward to working with the wine industry to grasp new opportunities from a rapidly changing environment. This will achieve lasting, positive change in our wine industry and regional communities.

The Hon. Jaala Pulford MP Minister for Agriculture Minister for Regional Development 5 VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021

WINE INDUSTRY MINISTERIAL MINISTERIAL INDUSTRY WINE COMMITTEE ADVISORY FOREWORD CHAIR’S Kim Chalmers Committee Advisory Ministerial Wine Industry Chair, Victoria is the most diverse and interesting wine producing state in Australia. Its 22 unique regions and regions Its 22 unique in Australia. state wine producing and interesting is the most diverse Victoria all shapes and sizes. of winemakers 600 different over by each vintage expressed are climates of range wine styles and of brilliant array a produce to advantage with an unmatched This positions Victoria the wines for and cellar-worthy distinctive rare, wines to everyday drinkable deliciously from varieties of occasions. finest own our a wider audience across wines to and our this message can take we together, By working a road down lays 2017–2021 Strategy Development Wine Industry The Victorian land and the globe. key targeting the wine list by the vine to from wine businesses Victorian of the success grow map to between collaboration a fruitful through has been put together This strategy advancement. for areas wine. in Victorian players key of consultation as a broad-based as well and industry government by formed Committee, Advisory Ministerial a Wine Industry through has been represented Industry 2015. Development, in late and Regional Agriculture for Minister the Victorian MP, the Hon. Jaala Pulford and regions of range a broad individuals from of group a dynamic and robust consists of The Wine MAC the bring to the last 18 months to over worked have we Together wine scene. within the Victorian sectors all ensure and to knowledge, and technical experience practical of a wealth process formation strategy in the plan. represented well specialisation are of and areas regions global distils the current accurately 2017–2021 Strategy Development Wine Industry The Victorian challenges and of outline the range and economic conditions to and local environmental wine market these of so many capture is perfectly positioned to Victoria us. lie before opportunities that currently about the implementation enthusiastic very and I are members Wine MAC opportunities. My fellow and critical support industry action by decisive through years concepts in the coming these strategic of today and will benefit the whole industry ensure to hard working to look forward We Government. from come. to generations for You don’t have to dig too far to find passionate people in wine. Vignerons love love Vignerons passionate people in wine. to dig too far to find have don’t You sense of community a strong which creates and sharing their wares, crafting growing, to it. devoted are many and is the reason the industry and hospitality around as does pitching a regional ups and downs, comes with its But primary production wine in the Victorian is plenty of determination There on a global platform. product which need to be addressed also impediments to growth are community but there future. and prosperous on track for a sustainable the state to keep EXECUTIVE SUMMARY

6 Victoria’s Wine Industry The Victorian Government and business models in the has committed to support Victorian wine industry means Development Strategy the industry in its transition. that there is a diversity of aims to recalibrate the The Hon. Jaala Pulford MP, pathways to profitability for Victorian wine industry, Minister for Agriculture and individual wine businesses. Minister for Regional Each business will engage setting it on a pathway to Development, has appointed with different elements sustainable prosperity. a Wine Industry Ministerial of the strategy according Advisory Committee (Wine MAC) to their needs and goals. The Victorian wine industry to provide the government with The strategy is aligned with key directly contributes $7.6 billion specialist advice. The Victorian Victorian Government sector to the Victorian economy and Government and Wine MAC development plans in food and provides 12,995 direct jobs have worked together to develop fibre and the visitor economy. (including wine tourism). this strategy for sustainable industry growth. The Victorian Government Victoria produces a broad and the wine industry will range of wine styles in unique In developing this strategy, jointly deliver this strategy. and diverse geographic settings. stakeholders were consulted Together, we aim to achieve Victorian wine businesses, too, in 14 sessions across Victoria’s lasting positive change for the are diverse, encompassing all wine regions including a wine industry and the broader or various stages of production focused discussion session Victorian community, through from the vineyard to the glass. on biosecurity and research the downstream benefits that Many wine industry businesses and development. Over 45 the wine industry delivers. encompass different disciplines interviews were conducted with including , oenology, wine industry, visitor, retail and Successful implementation marketing, tourism and service-based organisations. of this strategy will see an hospitality. industry that is more profitable, This strategy has been more coordinated, more skilled structured around four core The wine industry currently and better informed. Victoria’s strategic platforms. A series faces considerable challenges wines and wine regions will of programs is proposed including an unpredictable be recognised globally and to fulfil the strategic aim global market, planned domestic at home. tax reform, as well as climate of each platform. Within and biosecurity challenges the four strategic platforms, to production. The industry the Wine MAC and the recognises the need to adapt Victorian Government agree in response to changes in its that areas of particular priority operating environment. . are transitioning industry structure and building capability, increasing domestic tourism and growing export capability. The four strategy platforms are interlinked and designed to position the industry for success. The diversity of skills 7 VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 Strong and coordinated industry networks and effective engagement engagement and effective networks industry and coordinated Strong enable industry’s will be needed to government of with all levels Programs under this strategy. profitability sustainable to transition a model of establish to support industry under this platform and the of information the flow that coordinates representation chain, among wine supply the full services across of delivery bodies. industry and between the regions Trade development activity is needed to capture Victoria’s share share Victoria’s capture activity is needed to development Trade The markets. export in higher value emerging the opportunities of trade focus to with Wine Australia will collaborate industry Victorian has a competitive Victoria segments where on efforts development of range a broad offer positioned to is uniquely Victoria advantage. appropriate making our offering at all price points, products quality industry raise aim to under this platform Programs markets. in diverse wine through Victorian of the reputation capability and grow export messaging. consistent and more stronger Victoria has many boutique wine businesses that rely on the higher that rely wine businesses boutique has many Victoria economy sales. The visitor direct-to-customer that come from margins income for in the industry many to important is also increasingly holistic expect a more now visitors At the same time, diversification. aim to under this platform Programs wine businesses. from offering Aligning experiences. local visitor to the wine industry connect better with those wine associations regional of the activities and messages wine regions to visitation increase aims to Boards Tourism Regional of flow- supply chain through the across of all businesses the benefit for economies. prices and regional grape to on effects Victorian wine producing and marketing environments are changing are environments and marketing wine producing Victorian wine and grape change is having an impact on Climate quickly. market dynamic, and global are preferences consumer production, wine market global challenging. While the traditional conditions are are particularly there price points, at the lower is unpredictable, enjoy. to business Victorian for opportunities emerging capability include: building business under this platform Programs and development; research in targeted investing areas; in key will These programs and data. insight market and improving change of the forces understand wine businesses help Victorian them. to respond options to and their future

Lead industry Strengthen and structure coordination Develop profitable profitable Develop and sustainable markets export Trade Visit visitation Increase within and expenditure wine regions Victorian Adapt Support adaptation industry a new to environment operating THIS STRATEGY HAS BEEN STRUCTURED AROUND FOUR CORE PLATFORMS. UNDER EACH PLATFORM, A SERIES OF PROGRAMS HAVE BEEN PROPOSED TO FULFIL THAT STRATEGIC AIM.

8 9 VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021

identifies the These platforms align closely These platforms and priorities goals with the key Government’s the Victorian of and Strategy and Fibre Food For Strategy. Economy Visitor Economy the Visitor example Strategy build on the opportunity to Victoria regional of potential clear and consistent through tourism improving marketing, and more infrastructure coordination. effective identified These themes are in Platform wine regions for and the Food 2. Similarly, equip aims to Strategy Fibre with skills and businesses build export innovate, to tools market capability and capture 1 ofopportunities. Platform supports wine this strategy prevailing adapt to to businesses and production trading research, through environments and extension, development technical skills, business and biosecurity, innovation build 3 aims to while Platform markets export sustainable capability. export and grow the the strategy, Throughout individual to ‘industry’ refers term the throughout businesses wine chain, regional wine value and the state associations Wine Victoria. body, industry

to a new operating environment. operating a new to all to applies The strategy to grape from businesses the visitor It embraces glass. events tourism, (i.e. economy will help and and hospitality) opportunities. export drive developed was The strategy the widely across consulting by and undertaking wine industry current of analysis a detailed identify conditions to market the industry. for critical issues outlines a series This strategy key under four programs of to that respond platforms challenges’ for the ‘critical the industry. It provides a clear direction for for a clear direction It provides meet the to the wine industry it before challenges currently opportunities over and capture This strategy years. five the next the achieving sets out a plan for MAC’s and Wine government’s mission: shared wine industry set the Victorian To sustainable to on a pathway a developing by prosperity the of understanding shared domestic grow actions needed to demand for and international and wines unique the state’s adjust to support businesses

),

MAC

STRATEGY ABOUT THE THE ABOUT The strategy was initiated initiated was The strategy the Hon. Jaala Pulford by Agriculture for Minister MP, Regional for and Minister Development, who also the Wine MAC. appointed been jointly has The strategy the Victorian by developed and industry Government the Wine by (represented with the assistance MAC) McKinna et al. consultants of The Victorian Wine Wine The Victorian Development Industry is a joint Strategy of the Victorian initiative through wine industry, Industry the Wine Advisory Ministerial (WineCommittee and the Victorian and the Victorian Government. VICTORIA’S WINE INDUSTRY IS VITAL FOR REGIONAL ECONOMIES

10 In 2015, the Victorian The industry generates an The events and festivals estimated 12,995 direct jobs coordinated by the wine industry wine industry, from (including tourism) and creates also bolster the social capital the vineyard to the a total flow-on effect in the of regional communities and glass, contributed an vicinity of 32,820 jobs. The give people a reason to visit majority of these jobs are regional Victoria. estimated $7.6 billion located in regional areas. Domestic and international The associated visitor industries direct effect to the visitors now expect a high of tourism and hospitality are Victorian economy. standard of food and wine significant employers of youth as part of the visitor experience This extends to in particular, often in areas and the Victorian wine industry of regional Victoria that suffer approximately is capable of meeting those high youth unemployment. $13.3 billion in value expectations. Furthermore, when downstream Primary production and most restaurants and cafés operations offer associated with the wine effects are included. substantial casual and seasonal industry are champions employment. The wine industry of local produce. also generates economic The Victorian Government benefits to industries such as recognises that the wine those providing infrastructure, industry is vitally important production inputs and to Victoria’s visitor economy professional services, most and to the wider economies of which are delivered by of Victorian wine producing local businesses. regions. Not only does the wine industry contribute economically to regional prosperity, it greatly enhances regional liveability. The amenity provided by cellar doors, cafés and restaurants enriches local lifestyles and attracts people to live in regional Victoria. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 11

4 2 3 billion 223 ML production crush value crush 23,088 ha 23,088 $5.7 billion $5.7 contribution 21% of national 21% of 17% national of in value adding in value of wine grapes of $7.6 $153.6 million $153.6 direct economic direct 2

499 1 in exports in exports 319,471 t 319,471 cellar doors $1.5 billion crush volume crush in annual sales in annual 20% of national of 20% $297 million

12,995 jobs 12,995

including tourism

747 747 1132 growers wineries wine grape wine grape 9 million visitor nights visitor international 3.2 million 3.2 domestic visitor nights domestic visitor

4

3 Job estimate calculated using equivalent state numbers from the national Ag-Econ-Plus 2015 direct employment calculation calculation employment direct 2015 the national Ag-Econ-Plus from numbers state equivalent using calculated Job estimate including tourism. report. Vintage 2015 WFA from price per tonne applying average by calculated value volume; of estimates ABS 2015 data.. ABS crush applied to 2016, March Wine, Australian of State from sourced rate National extraction 2016 Directory Winetitles – Wine Industry

2

DIRECT EFFECT DIRECT CONTRIBUTION ECONOMIC BILLION $7.6 VICTORIAN WINE WINE VICTORIAN SNAPSHOT INDUSTRY 1 2 3 4 1 The Victorian wine industry wine industry The Victorian each regions spans 22 diverse history, distinctive with their own and wine mesoclimates , wine businesses styles. Victorian all or various can encompass chain in the supply links wineries, including vineyards, contract brokers, marketers, and logistics, freight bottlers, (vineyard input suppliers pruning and wine making), contractors, and harvest advisors professional retailers, elements and the various visitor the associated of wine Victorian Many economy. juggle operators business skills of different the vastly business oenology, viticulture, management and tourism. skills and of The diversity models in the Victorian business means that there wine industry to pathways of is a multitude for individual wine profitability success some, For businesses. on a focus may come through or e-commerce, while exports direct- increasing others for sales through to-customer experiences, on visitor a focus more to or transitioning and practices contemporary may be the key. varieties grape

The average value of value The average is higher wine Victorian than the national value. average SNAPSHOT INDUSTRY INDUSTRY WINE VICTORIAN VICTORIAN WINE REGIONS OF VICTORIA

BROKEN HILL Wentworth Mildura Renmark

ADELAIDE 21 Robinvale

12

Ouyen 22 Pinnaroo Swan Hill ADELAIDE

Kerang

SYDNEY SYDNEY Cobram Rutherglen Albury 6 Corryong 13 Wodonga ADELAIDE Nhill Rochester 7 10 Bordertown 9 Mt Beauty Horsham 8 16 14 Bright 11 12 Naracoorte Moonambel Maldon Castlemaine Seymour Mansfield Avoca SYDNEY ADELAIDE Edenhope Stawell Maryborough 15 Omeo Halls Gap 17 Kyneton Yea Eildon Ararat Daylesford Kilmore 5 Macedon 19 Creswick Marysville SYDNEY Sunbury Dunkeld 4 1 Healesville Orbost Cann River ADELAIDE Bacchus Marsh MELBOURNE Warburton Bairnsdale Mallacoota Hamilton Lilydale 20 Mount Metung Lakes Entrance Gambier 18 3 Traralgon Warragul Sale Colac Queenscliff Moe Sorrento Morwell Port Fairy Portsea 2 Portland Phillip Korumburra Lorne Island Foster Port Campbell Wonthaggi Inverloch Apollo Bay

AROUND MELBOURNE NORTH-EAST VICTORIA CENTRAL VICTORIA SOUTH-EAST VICTORIA

1 6 Rutherglen 11 Bendigo 16 20

2 7 Glenrowan 12 Heathcote 17 NORTH-WEST VICTORIA 3 Geelong 8 13 18 21 4 Sunbury 9 14 Strathbogie Ranges 19 Ballarat 22 Swan Hill 5 Macedon Ranges 10 Beechworth 15

Source: Wine Victoria

AROUND MELBOURNE NORTH-EAST VICTORIA CENTRAL VICTORIA WESTERN VICTORIA NORTH-WEST VICTORIA

1 Yarra Valley 6 Rutherglen 11 Bendigo 16 Pyrenees 21 Murray Darling

2 Mornington Peninsula 7 Glenrowan 12 Heathcote 17 Grampians 22 Swan Hill

3 Geelong 8 King Valley 13 Goulburn Valley 18 Henty SOUTH-EAST VICTORIA 4 Sunbury 9 Alpine Valleys 14 Strathbogie Ranges 19 Ballarat 20 Gippsland* 5 Macedon Ranges 10 Beechworth 15 Upper Goulburn VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 13 Brisbane Sydney Canberra Hobart 100 Melbourne Unsealed 80 Kilometers 60 N Sealed 40 Adelaide 20 AUSTRALIA M/6504 0 Darwin Freeway Highway Major Roads Statewide Route Numbers Melbourne International Airport Avalon International Airport Perth YDNEY S Mallacoota YDNEY S Cann River g g lin r lin a r l D a

l and D y Hil

and* a y Hil n

a a n urr a w urr S Gippsl M w Orbost S Gippsl M 21 22 20 21 22 20 NORTH-WEST VICTORIA NORTH-WEST VICTORIA SOUTH-EAST VICTORIA SOUTH-EAST VICTORIA Lakes Entrance

Omeo

Corryong Corryong

Bairnsdale Metung

99 Sale

YDNEY Albury S t Bright SYDNEY t a a y y Wodonga enees lar Mt Beauty r enees ampians lar r r ampians ent y r ent y Bal G H P 00 Bal P G H 11 17 19 18 16 17 18 19 16 WESTERN VICTORIA WESTERN VICTORIA 88 Traralgon 2020 66 Beechworth Morwell Mansfield Moe Foster Rutherglen 77 Benalla Eildon 1515 Marysville Warburton y Wangaratta e l 1414 Inverloch l y i lle Ranges v a lle lburn Ranges Warragul V

a u les

e Korumburra lburn t V o a

u

ogie e o e t Lilydale G o b

c urn ogie Cobram H o r h G h 1313 b b

c urn Yea t l e digo r h Seymour h 11 b a Wonthaggi t l e digo r eat t a Phillip Island r Ben H Gou S Upp eat t Ben H Gou S Upp 22 11 12 15 13 14 Shepparton 11 12 15 13 14 CENTRAL VICTORIA CENTRAL VICTORIA 1212 Sorrento Nagambie Sunbury Queenscliff Macedon Kilmore 44 MELBOURNE 55 Kyneton Portsea Echuca Rochester 1111 33 Castlemaine Lorne s Daylesford y Kerang s h y y t lle Geelong h r Bacchus Marsh e Creswick y t a lle Maldon Apollo Bay o r Bendigo e V a glen

wan all o

w V o Maryborough glen V 1919

wan e all h

w Swan Hill o V l e her h

e her pin l b pin A Beec Glenr King Rut Colac l m Ballarat 1616 A Beec Glenr King Rut 7 8 9 6 10 7 8 9 6 Avoca 10 NORTH-EAST VICTORIA NORTH-EAST VICTORIA oona 2222 M Stawell Robinvale a 1717 Ararat a Warrnambool sul sul Port Campbell enin nges Dunkeld P enin

y a Horsham nges P

e R y a l Halls Gap

l e Mildura ton R n l

a l g g ton n V a

1818

g Port Fairy g ury V

edo a Ouyen

ury r c rnin edo a r r a o c rnin unb a r Wentworth a o Y M Geelon S M Portland unb a Y M Geelon S M 1 2 5 3 4 1 2 5 3 4 2121 AROUND MELBOURNE AROUND MELBOURNE HILL Hamilton Nhill BROKEN Edenhope Bordertown Mount Gambier Renmark ADELAIDE ADELAIDE Naracoorte ADELAIDE ADELAIDE Pinnaroo ADELAIDE CHALLENGES

Challenging operational This is a change in operating The Commonwealth Wine 14 environment from previously Equalisation Tax (WET) Rebate conditions of the strong demand and prices and the Victorian Liquor Subsidy domestic and global wine for Victorian grapes and wine. (VLS) are embedded in the business models of small to industry have led to an Although at an aggregate level, medium sized wineries. The national supply is approximately unpredictable market planned reduction in the in equilibrium with demand, WET Rebate and any flow-on environment across the there is significant variation impacts to the VLS is likely industry as a whole. between varieties, styles and to change the way these price points. This is reflected Australia produces four per businesses access government in grape and wine prices cent of global production (2014) support. Transition processes will around the state. Most of the and six per cent of the volume be carefully planned to minimise wine produced in Victoria is of wine traded internationally. the impacts of these changes being sold, but on average it Victoria is an even smaller on both the recipients and also is sold at heavily discounted player on the international the regional communities which prices. This could be corrected stage, producing approximately rely on the businesses for by reducing overall supply 0.8 per cent of global production. employment opportunities. and shifting the product mix The wine industry operates to better meet existing and The Victorian Government in a highly competitive, global emerging market demands. will work in partnership with market, where trade is relatively industry to support adaptation flat and oversupply is forecast The industry is facing other to the challenges presented to prevail for some years. challenges such as climate in the current operating change and its related issues The Australian and Victorian environment. of earlier and more compressed wine industry has experienced vintages, decoupling of sugar declining profitability over the and flavour ripening, rising last decade, mostly owing to water costs, heightened the global wine surplus and biosecurity risk and greater persistently low prices. potential for smoke taint events. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 15 3 3 rank National 8 8 8 18 17 33 44 19 14 National share (%) share ml VICTORIA 7 5 3 6 10 10 223 135 240 23.5 294 1040 Total VICTORIAN PRODUCTION VICTORIAN 233 7 5 5 11 15 rank Global 2 2 6 ml 7.3 4.4 Global share (%) share NATIONAL 1 2 4 4 4 4 714 154 669 2777 2168 1200 Total NATIONAL PRODUCTION NATIONAL 1200 1 2 4 4 4 7573 37,119 9804 Total 27,566 37,390 ml GLOBAL Measure Hectares (,000) Hectares GLOBAL PRODUCTION GLOBAL 27,500 Export volume (ML) Export volume Import value (AUD M) (AUD Import value Export value (AUD M) (AUD Export value OIV – 2015 Global Economic Vitiviniculture Data (Australian data comparable to Wine Australia data). Wine Australia to comparable data (Australian Data Global Economic Vitiviniculture OIV – 2015 2014. figure Forecast 2015. OIV – Report Mainz Congress data. ABS crush applied to 2016, March Wine, Australian of State from sourced rate calculations – National extraction Production Data. Global Economic Vitiviniculture OIV – 2013 2016. Directory Winetitles Media – Wine Industry data Calendar year wine exports. – Victorian and Resources Department Transport Economic Development, Jobs, of ending December 2015. Department Economic Development, Jobs, of to submission Development Economic Strategy – Regional Wine Victoria – 2015. and Resources Transport Australia. total for figures Wine Australia calculation uses Share 2016. Wine – March Australian of The State – Wine Australia Q1 2016. Wine Victoria for analysis Wine Australia Wine production (ML) Wine production Domestic value (AUD M) (AUD Domestic value 1 2 3 4 5 6 7 8 9 10 0.68. 1 = EUR at AUD Euros from Export/import converted values INDUSTRY OPPORTUNITIES

This strategy outlines • Victoria is well placed Victoria has a number of well 16 to capture export growth established, iconic wineries, a clear direction for opportunities in new and which are important drawcards overcoming these reinvigorated markets for visitors to the wine regions. industry challenges and • online sales and digital Through working together and addressing the future marketing can showcase with the Regional Tourism Boards, Victoria’s many boutique there are opportunities to build development of the producers to wider markets visitation with benefits for all businesses in the wine regions. Victorian wine industry. • Victoria produces a broad range of wine styles across Victoria also has an opportunity to It aims to guide industry and a range of price points be an industry leader in sustainable government investment to in unique and diverse production practices and new grow a more productive and geographic settings. innovative products, giving competitive wine industry that Victorian grape growers and is able to overcome obstacles There is scope to improve wine producers an advantage and capture the opportunities recognition of the individual in the global marketplace. offered by an increasingly offerings of Victorian wine sophisticated domestic regions by better differentiating The Victorian Government’s and export market. Victorian wines in key export partnership with the wine industry will contribute to With a clear strategic direction, markets and creating a narrative environmental sustainability, the Victorian wine industry for Victoria’s wines, regions stronger regional economies, is well placed for an exciting and producers. increased visitation, investment, future because: The Victorian industry has jobs and exports in regional • Victorian wine styles are an opportunity to leverage Victoria. on trend with consumers its competitive advantage in cooler climate, lighter styles • many of Victoria’s iconic and alternative varieties. These cellar doors are within easy attributes should be marketed reach of Melbourne’s key to highly targeted market visitor destinations segments. The Victorian wine • Victoria has a point of industry must be a nimble niche difference and competitive market player, skilfully targeting advantage in wine export market segments that suit its markets in its cooler climate varied wine styles and areas and alternative varieties of competitive advantage. • Victoria’s fuller bodied wines . are highly sought after as wines for every occasion by emerging Asian markets VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 17

PLACED FOR AN EXCITING FUTURE. PLACED AN EXCITING FOR WITH A CLEAR STRATEGIC DIRECTION, DIRECTION, STRATEGIC WITH A CLEAR THE VICTORIAN WINE INDUSTRY IS WELL WINE INDUSTRY THE VICTORIAN CRITICAL CHALLENGES

Many Victorian wine businesses across the supply chain have adapted successfully to industry challenges and opportunities. However, much can be done to assist further industry growth. Extensive consultation and analysis identified a range of ‘critical challenges’ for the wine industry. The strategy’s four core platforms respond to these critical challenges. The platforms emphasise building industry capability, growing the visitor economy, developing exports and transitioning industry structure.

The industry requires support to understand the Trade development activities need to Climate change is having a major impact Industry collaboration and coordinated challenges and opportunities associated with be focused on higher value markets and on grape growing and wine making. leadership is needed to deliver this strategy. the new industry operating environment. segments to lift average sale price 18 and improve profitability.

Growers need research, development, extension and Consistent messaging is needed to enable Victorian wine lacks a clear context in biosecurity support, within the national framework. Continued investment in infrastructure is regional tourism bodies to communicate the international markets: shared messages and This will help growers to grow grapes more suited to needed from industry and government. Victorian wine proposition. program delivery between the industry and the contemporary drinker preferences, improve government is needed to support export vineyard efficiency and adapt to climate development. change impacts.

Parts of the industry lack capability in key areas The dialogue between industry and that will enable businesses to capture new government needs to be strengthened to opportunities to improve profitability. address regulatory burden and to address CRITICAL CHALLENGES any policy challenges including health and taxation.

Adapt Visit Trade Lead

Support adaptation to Increase visitation Develop profitable Strengthen industry a new industry operating and expenditure within and sustainable structure and coordination. environment. Victorian wine regions. export markets. STRATEGIC RESPONSE STRATEGIC

Global perceptions and Wine businesses are better Regional wine marketing export value of Victorian Industry works together equipped to respond to the is enhanced through wines are raised through and with government new global market dynamic leveraging resources focused export development to drive change OUTCOME VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 19 Lead

to drive change to drive development. Strengthen industry industry Strengthen and with government and with government Industry works together together works Industry structure and coordination. structure Victorian wine lacks a clear context in a clear context wine lacks Victorian government is needed to support export support export is needed to government Industry collaboration and coordinated coordinated and collaboration Industry leadership is needed to deliver this strategy. this deliver is needed to leadership international markets: shared messages and messages shared markets: international program delivery between the industry and the and the the industry between delivery program and taxation. The dialogue between industry and industry The dialogue between any policy challenges including health challenges policy any government needs to be strengthened to to strengthened be needs to government address regulatory burden and to address address and to burden regulatory address

Trade and sustainable and sustainable export markets. export Develop profitable profitable Develop Victorian wine proposition. Victorian Global perceptions and perceptions Global wines are raised through through raised wines are export value of Victorian of Victorian value export focused export development focused export on grape growing and wine making. growing on grape Climate change is having a major impact change is having a major impact Climate Consistent messaging is needed to enable is needed to messaging Consistent regional tourism bodies to communicate the communicate bodies to tourism regional Visit Increase visitation Increase is enhanced through is enhanced through leveraging resources leveraging change impacts. Victorian wine regions. Victorian and expenditure within and expenditure Regional wine marketing wine marketing Regional and improve profitability. and improve segments to lift average sale price liftsegments to average Trade development activities need to need to activities development Trade be focused on higher value markets and markets value on higher be focused vineyard efficiency and adapt to climate climate and adapt to efficiency vineyard contemporary drinker preferences, improve improve preferences, drinker contemporary biosecurity support, framework. within the national This will help growers to grow grapes more suited to to suited more grapes grow to This will help growers Growers need research, development, extension and extension development, need research, Growers opportunities to improve profitability. improve to opportunities that will enable businesses to capture new new capture to that will enable businesses Parts of the industry lack capability in key areas areas lack capability in key Parts the industry of Adapt environment.

Support adaptation to Support adaptation a new industry operating industry a new equipped to respond to the equipped to respond Wine businesses are better better businesses are Wine new global market dynamic market global new needed from industry and government. industry needed from the new industry operating environment. operating industry the new Continued investment in infrastructure is in infrastructure investment Continued

challenges and opportunities associated with associated challenges and opportunities

The industry requires support to understand the understand support to requires The industry

OUTCOME STRATEGIC RESPONSE STRATEGIC CRITICAL CHALLENGES CRITICAL 20 SUPPORT ADAPTATION TO A NEW INDUSTRY OPERATING ENVIRONMENT

INDUSTRY CRITICAL CHALLENGES ADDRESSED 01 Adapt 01 • The industry requires support to understand the challenges and opportunities associated with the new industry operating environment. • Parts of the industry lack capability in key areas that will enable businesses to capture new opportunities to improve profitability. • Climate change is having a major impact on grape growing and wine making. • Growers and producers need research, development, extension and biosecurity support, within the national Research, Development & Extension framework. This will help growers to grow grapes more suited to contemporary drinker preferences, improve vineyard efficiency and adapt to climate change impacts.

OUTCOME Wine businesses are equipped to respond to change with better skills and new practices. 01 Adapt 01 VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 21

Murray Valley Wine Grape Grape Wine Valley Murray Development Industry Committee Grape Wine Valley The Murray Committee Development Industry body established (IDC) is a grower to fund activities that collects levies and the that benefit local wine growers with the closely The IDC works industry. Association Winegrowers Valley Murray body) to deliver growers’ (peak regional station services that include a weather crush survey winegrape network, biosecurity management input, reports, information marketing advice, extension advice for growers. and commercial WHAT’S HAPPENING NOW WHAT’S Fund Growth Wine has Fund Growth The Wine by the Victorian been established and grow to develop Government Projects wine industry. Victoria’s a total have funded in 2016–17 of $3 million, in excess value contributing with government in the order and industry $750,000 of $2.3 million. The fund will support markets, of export the development and tourism initiatives, marketing in wine production, improvement developments infrastructure new and job creation. Industry Government Business (Small Victoria) Government (Agriculture Victoria) Industry Industry Industry Government (Agriculture Victoria, Victoria) Trade Government (Agriculture Victoria) LEAD

In partnership with national bodies, invest in invest In partnership with national bodies, viticultural and statewide localised, regional and development and wine research, support adaption to and programs extension innovation, technical change, climate to productivity products, and innovative new management. and biosecurity improvement and the Engage with Wine Australia Institute Wine Research Australian data production Victorian improve to information. and industry with the information industry Provide identify new and insights needed to opportunities in domestic and markets. export those and support to information Provide environment operating the new by impacted or change refocus retire, retrain, to models. or business crops industries, Build capability in business skills and planning skills capability in business Build and wineries through producers growers, for wine-specific of and promotion development programs. industry

SWAN HILL GRAPE HILL GROWER SWAN

in switching to production of higher value grapes.” of higher value production to in switching with the right buyers so they can benefit from an investment investment an benefit from can so they buyers with the right Valley of exceptional quality; we just need to connect growers growers connect to need just we quality; of exceptional Valley We have the capacity to grow alternative varieties in the Murray the Murray in varieties alternative grow to the capacity have We 1.2 1.3 1.4 1.5 PROGRAMS 1.1 / “ 01 Adapt 01 22 RATIONALE

The operating environment to which industry will need to adapt presents challenges and opportunities.

CHALLENGES OPPORTUNITIES

Global oversupply of wine and Australian Victorian wines are on trend with consumers oversupply of lower quality grapes

Recent flat domestic and global markets There is a shift in food styles to favour lighter, Increasing wine imports flavoursome wines 01 Adapt 01

More complex market and channel Higher visitor expectations of cellar segmentation door experiences

Category devaluation due to supermarket Growth in international visitor numbers discounting and private label

Declining per capita consumption of wine Growth of on-line and phone sales and impact of social media

Rise in popularity of craft beer and cider Lower Australian dollar making Victorian wine exports more competitive and fuelling domestic tourism

Planned changes to the WET Rebate scheme and Recent growth in Asian markets, which Victoria any change to the VLS could impact expanding is well placed to service businesses the most

Impacts of climate change Prices holding for premium grapes

A high cost structure reduces Victoria’s global Demand for entry level grapes increasing competitiveness as plantings decrease

More savvy and price-driven, less brand-loyal Victoria’s geographic diversity supports retail customers a broad range of wine styles 23 WHAT’S HAPPENING NOW

Research, Development VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 and Extension

The Victorian Government works within the national R,D&E framework to invest in areas that are important for Victoria’s wine industry. Current research focuses on control and understanding the impacts of climate change on vineyard productivity and grape quality. Building on the Victorian Government’s $4 million investment in Agriculture Victoria’s Centre of Expertise in Smoke Taint Research, the Victorian wine industry contributed an additional $40,000 to ensure continuation of key research and delivery of new tools for vignerons to determine atmospheric smoke risk. Further co-investment by the Victorian and Commonwealth Governments and Wine Australia (industry R&D levy) has delivered important mitigation and remediation solutions for smoke taint. The Australian Wine Research Institute (AWRI) node in Victoria was established in late 2011 under a Memorandum of Understanding among Wine Victoria, Wine Australia and the Victorian Government. AWRI delivers workshops and seminars on topics as diverse as consumer and market insights, precision and low-input viticulture, cost of production benchmarking and aromas in wine. 24 Victoria’s wine grape growers are passionate experts who produce a wide array of quality grape varieties. However, many in the industry are experiencing a lack of profitability as they face challenges in adapting to the prevailing industry operating environment. Apart from making 01 Adapt 01 great wine, winemakers increasingly need to think about product and income diversification, direct marketing, delivering a memorable cellar door experience, providing a holistic food and wine visitor experience, export marketing and new and innovative products in order to be successful. While some Victorian wineries have already successfully adjusted to the new operating environment, many face capability gaps that prevent them from taking full advantage of new opportunities. Building capability in key areas, along with better data and market analysis, will assist some producers to adapt to these new market conditions. For example, improving business management skills or increasing awareness of market signals will help producers to better identify drivers of profitability and to produce grapes that are more accurately targeted to the needs of wineries. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 25

Varieties Wine Show (AAVWS) (AAVWS) Show Wine Varieties that fall outside varieties showcases over and attracts the mainstream Australia across from 200 exhibitors Zealand. The AAVWS and New funded association is completely partnerships and industry through entries and events. income from a handful of just from Growing entries to 772 entries in 2001 in encompassing 102 grape varieties diversify has helped to this event 2016, AAVWS wine offerings. Australian each year, international guests hosts global exposure. providing to tailor these programs to the wine to the wine to tailor these programs uptake. to increase industry Alternative The Australian Show Wine Varieties Alternative The Australian WHAT’S HAPPENING NOW WHAT’S Business Skills and Training supports Government The Victorian all small businesses with a range of and local support programs low-cost the example, For the state. across Workshops Small Business Victoria 350 low-cost over provides program than to more per year workshops is potential There 4000 participants. This affects grape and wine and grape This affects decoupling through quality ripening and flavour sugar and logistical and creates at pressures processing via a compressed vintage Some wine window. harvest will become more varieties in certain to grow difficult although others regions, Victoria’s may become easier. and climatic geographic is an advantage diversity these changes. of in the face is also taint smoke The risk of change, with climate associated and planned burns with fires frequent. become more to likely ever- Biosecurity concerns are change and climate present some risks, may exacerbate and especially Phylloxera pests and diseases other exotic disease). Pierce’s (e.g. Readily accessible and easy and easy accessible Readily and data understand to insights will help industry conduct long range to growers align the varieties planning to with future grow that they Wineries and trends. market will also benefit winemakers information industry better from supply match help them to existing mix to and product trends. market and emerging experiencing Some producers may need profitability a lack of and support to information retrain, the decision to make or change refocus retire, or business crops industries, includes models. Support financial counselling, transition on and information workshops biosecurity risks reduce to how when leaving the industry. regionally require Producers development research, relevant better grow to and extension productivity improve grapes, the challenges and adapt to Climate change. climate of average change means warmer and higher temperatures heatwaves, of frequency shifting seasonal rainfall water and reduced patterns quality and water availability season. during the growing 26 INCREASE VISITATION AND EXPENDITURE WITHIN VICTORIAN WINE REGIONS

02 Visit INDUSTRY CRITICAL CHALLENGES ADDRESSED • Consistent messaging is needed to enable regional tourism bodies to communicate the Victorian wine proposition. • The wine industry and regional tourism bodies would each benefit from shared strategic intent, programs and in some cases resources. • Continued investment in infrastructure is needed from industry and government.

OUTCOME Regional wine marketing is enhanced through shared resources, a clear vision and coordinated approach. 02 Visit VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 27

WHAT’S HAPPENING NOW WHAT’S Wander Victoria Wander and beauty of regional The diversity the State an epicurean make Victoria and food Wine playground. visitor’s of current feature is a key messaging Victoria by Visit undertaken marketing and international markets. in domestic marketing intrastate Victoria’s Visit captures Victoria’ campaign ‘Wander campaign elements. wine and food in core This $4.5 million campaign will be over supported with further activity aiming to inspire years two the next Victoria. to visit regional Melburnians of food and wine The promotion continues to be a experiences Victoria’s fundamental element of Visit is There strategy. marketing regional guidance an opportunity to provide industry Boards, Tourism to Regional businesses associations and individual to best to help align their activities strategy. marketing the regional leverage LEAD Industry Visit Victoria Visit Victoria Visit Victoria Industry Government (Regional Development Victoria) Industry

Explore opportunities for regional wine regional opportunities for Explore Boards Tourism and Regional associations leverage to relationships formal develop to set out in the opportunities the many Strategy. Economy Visitor Victorian Victorian develop to with industry Work relevant into and integrate wine messaging activities. and communication marketing Wine Boards, Tourism Engage with Regional and Wine and the Melbourne Food Victoria round year of a program develop to Festival and wine events. food regional Boards Tourism with Regional Collaborate in investment facilitate to and industry infrastructure and wine tourism food experiences. and new to Support individual wine businesses product infrastructure, their own improve skills and visitor hospitality presentation, offering. experience Build on Victoria’s food and wine competitive and wine competitive food on Victoria’s Build partnerships with Regional through strength Australia, Tourism Boards, Tourism partners industry/brand travel commercial and media.

ALPINE VALLEY BUSINESS MANAGER BUSINESS VALLEY ALPINE

dining experiences that enhance the value of our the value that enhance dining experiences income through investment in accommodation and and in accommodation investment through income This business has survived because we diversified our diversified we because survived business has This wine brand.” PROGRAMS 2.1 2.2 2.3 2.4 2.5 2.6 / “ 02 Visit 02 28 RATIONALE Victoria has many boutique wineries that depend on the higher margins of direct-to- consumer sales for their overall profitability. Visitation drives cellar door sales, wine club membership, repeat purchases and encourages brand loyalty. 02 Visit It is therefore essential that the wine industry aligns closely with the regional visitor industry to drive food and wine tourism and build awareness of Victoria’s wine styles, regions and diverse wine experiences. The Victorian tourism sector relies on strong wine tourism offerings and the Victorian Visitor Economy Strategy identifies wine and food tourism as key to regional economic growth. Wine is a core component of tourism marketing in most regions of Victoria, yet the industry tends to operate independently from tourism boards, duplicating resources. Although wine is a critical element of regional tourism, there is strong evidence that it is no longer enough by itself. Visitors seek experiences beyond cellar door tastings. Their expectations include, for example, boutique accommodation options, local food, food and wine matching, cooking classes and wine appreciation knowledge. Visitors also value opportunities to engage in other experiences such as nature-based activities, art and culture, and health and wellness treatments during their stay. They seek to buy products that they cannot find at home or at a special price. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 29

to showcase the region and Victoria’s and Victoria’s the region to showcase Noirs. Pinot best Wine La Dolce Vita Festival and Food Festival and Food Wine The La Dolce Vita as the aims to cement the King Valley home of Italian wine styles. Australian authentic offers wine tastings, The festival recipes to family according cuisine regional and heritage and celebrates the history is supported by The festival of the region. of association investment wine regional attended visitors 3,800 Over $85,000. million generating $1.4 festival, the 2016 for the local economy. Shiraz Seriously the Melbourne in the Grampians over Held Shiraz is a Seriously Cup weekend, collection of wine, food and entertainment local celebrating Shiraz and other events is supported This event specialty varieties. campaign marketing by a collaborative the Grampians Winemakers between Association, the Grampians and Pyrenees and Grampians Tourism. Shires WHAT’S HAPPENING NOW WHAT’S Peninsula Mornington Noir International Pinot Celebration Peninsula The bi-annual Mornington Celebration Noir International Pinot visits vineyard tastings, includes tutored dinner featuring local and a degustation and a selection of international produce opportunity It is a wonderful Noir. Pinot

They provide advice to to advice provide They and on supply government the industry of demand areas organisations the key and are seeks which government from funding to input in relation as the Regional such programs, Fund. Infrastructure Tourism opportunity is a great There work to the wine industry for closely with Regional more capture to Boards Tourism professional their expertise, and and networks experience the from return gain a better spend. marketing existing wine Victoria’s of The diversity strength is a great offering across Spread the state. for each with 22 wine regions, inspiring landscape, its own wine quality produces Victoria style, conceivable in every palate. every price and for a lack of however, is, There about Victorian clear messaging a set of The development wine. the for and assets messages of in assist would wine regions communications marketing and create greater clarity for clarity for greater and create and visitors. both industry the will capture The messaging attributes and unique diversity wine and will Victorian of for complement messaging add to activity in order export differentiation. through value It will build on the growing It will build on the growing brand Victoria’s of strength communication. cohesive through

Wine businesses now find now Wine businesses bridge needing to themselves oenology viticulture, of the worlds Skills in sales, and tourism. are and marketing hospitality in wine businesses. variable an integral is now food Because wine the overall component of also the industry experience, develop continually needs to culinary and and refine ensure skills to hospitality the evolving to that it caters visitors. needs of commitment by A shared to and the industry government infrastructure in tourism invest as articulated and experiences, Economy Visitor in the Victorian will support regional Strategy, and enable the economic growth with pace keep to wine industry expectations. changing visitor Luxury accommodation is noted areas gap in many as a product Victoria. regional of will and industry Government opportunities to investigate experiences in tourism invest create to cellar doors beyond visit to compelling reasons to the government and allow economic of meet its objectives Victoria. in regional growth regional between Collaboration and Regional wine associations and improved Boards Tourism is critical strategies of integration cellar door visitation drive to Tourism and wine sales. Regional been established have Boards Government the Victorian by tourism be the peak regional to organisations. 30 DEVELOP PROFITABLE AND SUSTAINABLE EXPORT MARKETS

INDUSTRY CRITICAL CHALLENGES ADDRESSED 03 Trade • Trade development activities need to be focused on higher value markets and segments to lift average sale price and improve profitability. • Victorian wine lacks a clear context in international markets: shared messages and program delivery between the industry and the government is needed to support export development.

OUTCOME More Victorian wine sold at higher prices through focused export development and better global perception. 03 Trade VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 31

Australia’s First Families Families First Australia’s of Wine made of Wine, Families First Australia’s leading family-owned up of 12 of Australia’s based four of which are wine companies, wine in Australian promote in Victoria, tells the “Heart This group markets. export and of wine to a domestic and Soul” stories audience, with quality and heritage export at the forefront. WHAT’S HAPPENING NOW WHAT’S Export Australia Wine Development Market wine industry the Victorian In 2014–2015, of to the value Australia funded Wine $2.2 million in export market development, development, market $2.2 million in export million. of $1.7 levies including industry of businesses also paid a total Wine Australia’s to participate in Wine $500,000 to programs in- and outbound export including China, the USA, markets, key the UK and Canada. and Wine levies In addition to industry the largest programs, export Australia development market in export investment is estimated to come from individual individual to come from is estimated industry The companies. Victorian companies benchmark for exporting is their markets to maintain and grow 10 per cent of their export approximately to case, this equates In Victoria’s value. $20 million of approximately investment human infrastructure, of in-market activities. and marketing resources Industry Government Victoria) (Trade Industry Industry Government (Agriculture Victoria) Industry Government Victoria) (Trade LEAD

Work with Wine Australia to develop a develop to with Wine Australia Work activities that of program rolling shared wine. Victorian for a context can create export collaborative Enhance and promote clusters. as export such initiatives, with export industry Victorian Provide that outlines and intelligence data market opportunities. and product specific market Assist businesses to determine export export determine to businesses Assist capability and capacity and grow readiness programs. with specific wine industry MURRAY VALLEY INTEGRATED WINE BUSINESS MANAGER BUSINESS WINE INTEGRATED VALLEY MURRAY

Yes, you could say that our business is an export success success an export business is that our say could you Yes, work. leg of in-market years many has taken but it story country. each for and marketing styles tailor our wine We opening up the FTAs about excited incredibly are We new opportunities.” new 3.2 3.2 3.3 3.4 PROGRAMS 3.1 / “ 03 Trade 03 32 RATIONALE Being less than one per cent of global production, the Victorian wine industry must position itself as an agile and innovative niche market player. The development of export markets is critical to the profitability of all parts of the Victorian wine industry. The movement away from a commodity

03 Trade market to premium positioning is key to the future of the Victorian wine industry. The diversity of Victorian wine is both its strength and weakness. Victorian wine lacks a definitive proposition in export markets. The Victorian Government and industry will work together to build international recognition of Victoria’s diverse wine regions, varieties and producers. Creating this context depends on shared messages and increasing the foot-traffic through Victoria’s wine regions by wine buyers and industry representatives in key international markets. Wine Australia will be a critical partner in this work. Coordination with Visit Victoria (Platform 2) is essential to ensure congruence with messaging for domestic tourism. Victoria’s point of difference and its competitive advantage in wine export markets is its diversity of varieties, including a range of high quality alternative and cooler climate varieties. An export focus on higher value products will benefit all wine grape growers and producers by building Victoria’s international reputation for quality wines in all export markets. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 33

Growing Victoria’s Victoria’s Growing Exports Wine the Victoria, Wine In late 2016, Victorian Government, Victorian Associations Wine Regional formed an Australia and Wine and aimed at growing agreement wine exports. positioning Victoria’s combining By aligning and investment, and industry government the the partnership aims to increase wines of Victorian and volume value each year. exported in Government, The Victorian also partnership with industry, export helps businesses to capture market opportunities by providing capability with enhancing insights, training and strengthening export chain and trade relationships. supply will continue to The government inbound trade missions and host support targeted outbound missions development. and market Mornington Peninsula Pinot Pinot Peninsula Mornington to London Roadshow Noir and their wine producers Ten to the London Wine travelled by the co-ordinated 2016, Fair Vignerons Peninsula Mornington Association in conjunction with and self-funded Australia Wine Mornington by the producers. showcased was Noir Pinot Peninsula time en masse to the for the first 200 people London trade. Over a with 40 attending attended Masterclass. specialist Export Market Development Development Export Market Association Development The Export Market cooperative Association coordinates market facilitating export programs for member wineries. development markets export can test Producers in a low-cost, for their product the by Investment manner. low-risk 30 per cent of association covers (up to $5000) for four or five costs to participate in programs producers state or Australia Wine by offered these Each year governments. see up to 80 qualified wine programs influencers including trade, media, and sommeliers buyers distributors, for region visit the King Valley and educational an immersive experience. WHAT’S HAPPENING NOW WHAT’S A strong export sector is as sector export A strong growers grape to important because winemakers, as it is to higher of effect the positive of prices. wine prices on grape is strategy export A focused Wine Australia, by endorsed targeting which recommends and Victorian the USA and into styles Victorian fuller-bodied these wines where China, into The highly sought after. are in China may market entry-level be challenging, as Victoria’s the across high cost structure it difficult chain makes supply globally; however compete to high-enddemand for Australian wine and Victorian rapidly. is growing sized small mid to Many not confident wineries are and may about exporting do so successfully. lack skills to often do businesses Smaller to the critical mass not have in their exporters be sustainable could they right;own however, successfully export potentially cluster. as part an export of wine producers Victorian understand need support to target needs of the product promote and to markets export difference. points of Victoria’s 34 STRENGTHEN INDUSTRY STRUCTURE & COORDINATION

INDUSTRY CRITICAL CHALLENGES ADDRESSED 04 Lead • Industry collaboration and coordinated leadership is needed to deliver this strategy. • The dialogue between industry and government needs to be strengthened to address regulatory burden and policy challenges in areas including health and taxation.

OUTCOME Industry works together and with government to drive change. 04 Lead VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 35

Victorian Viticulture Viticulture Victorian Biosecurity Committee Biosecurity Viticulture The Victorian venture is a collaborative Committee and key Victoria Agriculture between industries, in the viticulture stakeholders including the wine grape, table grape and plus the nursery and dried fruit industries, a It provides sectors. vine improvement biosecurity policy forum for government involved stakeholders and major industry and processing with the cultivation, of vines and vine products marketing in Victoria. WHAT’S HAPPENING NOW WHAT’S Ministerial Industry Wine Advisory Committee appointed Government The Victorian Advisory Ministerial Industry the Wine it with (MAC) to provide Committee advice on opportunities for specialist and issues industry wine the Victorian affecting the long term performance and sustainability of the industry. of the industry. and sustainability industry MAC has provided The Wine this strategy. leadership in developing Industry Industry Government (Regional Development Victoria) (Lead) Industry Government (Visit Victoria) Industry LEAD

Develop a business case for a sustainable a sustainable for case a business Develop model that articulates funding Wine Victoria it partners and where role Wine Victoria’s and industry with other government champion industry to organisations development. scale and economies of how Investigate can be achieved outcomes improved the number of rationalisation through and identify wine associations regional of with Regional collaborate opportunities to 2.1). Program (see Strategy Boards Tourism regulatory address to with government Work challenges including failure and market service responsible signage, road tourism and industry alcohol, labour regulations of and biosecurity. taint smoke awards, Define the value proposition of Wine Victoria of Wine Victoria value proposition the Define it can support how this strategy. and assess

GIPPSLAND VIGNERON GIPPSLAND This is a fantastic industry to be part of and part of and be to industry is a fantastic This all the challenges of recent times, I do feel I do feel times, all the challenges of recent the future.” for our vision lost have we I have enjoyed my many years in it, but with in it, but years many my enjoyed I have

4.2 4.3 4.4 PROGRAMS 4.1 / “ 04 Lead 04 36 RATIONALE The Wine Industry Development Strategy articulates a clear imperative for the Victorian wine industry to transition to a sustainably profitable footing. The wine industry has committed to work effectively together and with government to realise

04 Lead the benefits of the strategy and protect its assets in the face of the challenges it faces. Strong internal coordination and cooperation will be essential to drive change. In developing its future representation model, the wine industry will consider the need to: • coordinate service delivery and provision of information across the wine supply chain and across the Victorian regional wine associations, which themselves have a range of administrative arrangements • deliver consistent messages to governments, Wine Australia, visitors and export markets.

The Victorian wine industry has the opportunity to cultivate a spirit of working together for the benefit of the whole industry by forming strong, coordinated networks and making a realistic assessment of its future needs. Effective engagement with government will raise awareness of impediments to industry growth. There is an opportunity to strengthen the dialogue between industry and government in areas such as road signage, biosecurity challenges and controlled burns. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 37

Aussie Wine Month Wine Aussie Australia Wine Each year, a campaign to raise coordinates and about the diversity awareness wines among quality of Australian influencers. consumers and key wine regional businesses, Wine retailers restaurants, associations, parties also interested and other Month, Wine in Aussie get involved biggest celebration of Australia’s wine. The month-long Australian excitement aims to create event wine and buzz about Australian media, the among consumers, bars wine trade, restaurants, influencers. and key Wine Yarra Valley and and Valley Yarra Wine Ranges and Yarra Valley Yarra Wine to together worked have Tourism wine and cider trails new develop and encouraged wineries to invest product Ranges Tourism in Yarra and marketing development Valley Yarra Wine initiatives. Ranges Tourism with Yarra works the tourism experience to improve for visitors to the region. Yarra Ranges Tourism Ranges Tourism Yarra

Wine Victoria Future Leaders Future Victoria Wine launched Victoria Wine In 2015, With Leaders program. its Future Victoria in mind, Wine the future of a group together has brought leaders wine industry next Victoria’s to develop in a mentoring program of industry their understanding and relationships and government Many Victoria. of Wine the roles now leaders have of these young Victoria, within Wine on roles taken and their local MAC the Wine boards. industry Victorian Winegrower Winegrower Victorian Liaison Committee Liaison Winegrower The Victorian co-ordination provides Committee and extension of innovation, Agriculture activities. adoption a Victorian co-funds Victoria by officer employed extension Research Wine the Australian under the Liaison Institute agreement. Committee WHAT’S HAPPENING NOW WHAT’S

As the peak industry body, body, As the peak industry Wine for is a role there play in delivering to Victoria the strategy. of the objectives placed is well Wine Victoria and government assist to tailor to organisations industry and the industry to programs professional of awareness raise opportunities. development regional The current presents model representation are some challenges. There wine 22 regional currently operating many associations, to resources with limited the industry. for growth deliver unnecessary This creates competition and duplication With associations. between independent of this number for it is difficult associations, clear deliver to the industry in its interactions messages Regional with Wine Australia, all levels and Boards Tourism of government. of regional of A review is recommended. representation identify would The review duplication, reduce to strategies and resources consolidate alignment greater achieve with Regional Tourism Boards. Tourism with Regional is Government The Victorian the industry, assist to ready supporting a by example for facilitating by review, structural Tourism alignment with Regional services delivering by Boards, or identifying service delivery the and through partners, partnerships model regional priority setting. regional of TOWARDS SUSTAINABLE PROSPERITY

38 The Victorian Government and the wine industry will jointly deliver this strategy. Together, we aim to achieve lasting positive change for the wine industry and the broader Victorian community, through the downstream benefits that the wine industry delivers.

Successful implementation of this strategy will see measurable progress in the following areas

04 Lead →→ A more informed and better skilled sector →→ An environmentally sustainable industry that is better equipped to manage biosecurity challenges →→ A higher proportion of sales through a vibrant visitor economy →→ A more profitable wine industry with fewer unviable businesses →→ Better global recognition of Victoria’s iconic wine regions →→ A more coordinated and connected industry

The Victorian Government and the industry will work together to develop actions that support the strategic intent of each of the four platforms. These will build on the initiatives highlighted in this strategy, which are already setting the scene for a more profitable industry poised for an exciting future. VICTORIAN WINE INDUSTRY DEVELOPMENT STRATEGY | 2017–2021 39

TO ACHIEVE ONGOING SUCCESS. TO ACHIEVE THAT IS NATIONALLY AND GLOBALLY GLOBALLY AND IS NATIONALLY THAT RECOGNISED AND WORKING TOGETHER TOGETHER AND WORKING RECOGNISED OUR SHARED VISION FOR THE FUTURE IS A THE FUTURE VISION FOR SHARED OUR VIBRANT, AGILE VICTORIAN WINE INDUSTRY INDUSTRY WINE AGILE VICTORIAN VIBRANT, DEDJTR 10609/17