Drew Noon from Noon Winery

Hi Kasey,

Glad to hear that you found our presentation at HdR interesting and that you are now studying in Adelaide. Are you a student of Steve Lloyd-Moffett?

Please find answers to your questions below. As it’s harvest for us at the moment, our responses may not be as in depth or well written as we would like but hope that they are helpful.

1.      How do you feel about Australia's current wine market? Mmmm, good question... we see Australian wine producers in an awakening phase at the moment. 10 years ago Australian wine producers thought they could do no wrong but in recent years we have experienced a check in our confidence. I feel that supply still exceeds demand for Australian wine in the medium term (say the next 3-5yrs). 2012 should see growers sell all of their fruit due to the smaller crop following a smaller harvest in 2011. We are confident that Australia’s wine reputation will recover in the international market and that criticism over recent years will help us to refocus and strive for improvement in our winemaking & viticulture practices. Australia has many excellent, diverse & interesting wine regions. We generally embrace new methods, are excited by new varieties and are not restricted by tradition/ expectation which allows us to be experimental. So I think the export market will slowly improve and the domestic market will remain strong.
2. How many cases do you produce annually? (so we can get an idea of the winery sizes that we are comparing). We are a small, 2 person, family operation. Our annual production varies more than many other producers who have irrigation to assist in low rainfall years. Our vines are dry grown & rely on natural rainfall so drought times are tough. A good vintage/normal harvest, will see us produce 3,000 cases (12 bottle cases = 36,000 bottles).

3.     About what percentage of your wine is exported? We export 20-25% of our annual production.

4.     Which countries do you choose to export to and why? Our largest markets are the UK & USA, both of these are strong wine markets & have been interested in our wine.

The following countries have also been very dear to us but that may be as much to do with our importers in each market as the market itself. Our importers in each country are committed, quality/value focused people who are extraordinarily interested in all things wine & food and we admire them greatly. They are in:  Germany, Switzerland, Canada (Ontario), Japan, Denmark, Belgium, NZ, Singapore, France, Israel & Russia.

5. How would you compare Australia's wine market to California? We would expect them to be quite similar in nature. Varietal labelling and bold fruit flavours are common to both. Australian consumers are perhaps slightly more comfortable/familiar/confident with wine as part of everyday life (though as in California there are many demographic groups here). In the market place we would be competing for similar customers due to the general similarities in our wines & styles. We expect that we share similar concerns in winemaking and viticulture and market share such as global warming, winegrowing and impact on our environment, wine style trends, global economy etc.

Good luck with your senior project & warm regards,

Raegan & Drew Noon.

NOON WINERY

www.noonwinery.com.au

PO Box 88, Rifle Range Road

McLaren Vale  SA  5171

AUSTRALIA

+61 (0)8323 8290 ph/fax/answer

Jim Barry Wines, the Barossa

Hi Lindsey,
Glad you enjoyed your visit to our winery.
Answers to your questions below:

1) Australia has been affected by the world oversupply of wine and the lack of confidence in the world economy.
2) Around 75,000 cases grown on our own vineyards
3) Around 40%
4) We export to 39 countries around the world, incorporating all of the major Australian wine markets. We focus a significant amount of our attention on the UK, EU, USA and more recently the Asian markets.
5) I do not know the Californian wine market and can therefore not comment.

Best of lick with your report.

Kind regards,
Peter Barry

Peter Lehmann, Barossa Valley

Hi Lindsey

Thanks for your note and also visiting the Barossa.  I'm glad to hear that you enjoyed your visit to Peter Lehmann and hope that you got to try and few of our wines at cellar door.  I've provided some answers below and hope that they will assist with your project.

Cheers

Paul

1. How do you feel about Australia's current wine market?

The current market is tough.  Oversupply in Australia and the wider global market is driving price points down and a very high $A is making export markets less profitable – in some cases unsustainable.  That said, strong brands that have high quality credentials and a strong consumer franchise will continue to do well.  

2. How many cases do you produce annually? (so we can get an idea of the winery sizes that we are comparing)

We produce around 750,000 9L cases per year.

3. About what percentage of your wine is exported?

Exports account for around 70% of our total sales volume.

4. Which countries do you choose to export to and why?

We currently export to over 60 countries around the world.  They are split between emerging, established and mature.  Different markets will offer different opportunities, so we look at what is currently selling within the Australian category and wider, what we can offer to add value to the market and what level of investment is required to get our wines distributed in the key channels we want to compete in.

5. How would you compare Australia's wine market to California?

From a production perspective, Australia is a much smaller than is California and I'd suggest far more diverse.  The land mass of Australia is pretty similar to the entire USA, and we've regions dotted throughout which leads to a great diversity of styles and varietals.  In a branding / marketing sense I think that there is a lot of similarities in the way wines are sold.

Coriole Vineyards, McLaren Vale, South Australia

Here's a little background info on Coriole (we visited this winery on our field trip to McLaren Vale):

Established by the Lloyd family in 1967, Coriole has become known for their Shiraz (accounting for 65% of their vineyard space), Sangiovese, and Chenin Blanc.  In total, there are 25 various vineyards--some new (3 years), some old (90 years).  Just this year, they began the shift to organic viticulture.  According to the website, "Coriole owns or manages most of the vineyards where our grapes are sourced. One of the features of the winemaking is that each block or part of a block are processed separatly to maximise the potential of the fruit. This also allows the wine quality to be linked to the vineyard management of each block. Winemaking at Coriole is a very traditional process. Red wines are mainly open fermented in stainless steel or old wax lined concrete tanks. Ferments are hand plunged. New oak is used but many wines such as Sangiovese and Redstone Shiraz are specifically matured in older oak to gain maturity but with minimum contribution of oak flavour and extract in the wine."

Here's their response to our questions!

Hi Lindsey,

 

Thanks for the email - glad you enjoyed your time at Coriole. See below answers.

 

1. How do you feel about Australia's current wine market?

The current market is very challenging. Lots of wine around - which includes many imports with plently of discounting. The strong brands will still shine but margins are being eroded.

2. How many cases do you produce annually? (so we can get an idea of the
winery sizes that we are comparing)

 

Coriole produces approx 35,000 cases per year. This is small to medium in Australian terms.

3. About what percentage of your wine is exported?

 

Only about 10-15% gets exported.

4. Which countries do you choose to export to and why?

 

We export to about 15 countries. China is the biggest market and offers the best potential. Historically the US and UK were the strongest but a high A$ has impacted. We choose to export to any and all markets as this represents great world wide exposure for the brand.

5. How would you compare Australia's wine market to California?

 

Hard to say as I haven't spent much time in California. I'd possibly suggest that California has a bigger market to supply (USA) and demand for their wines would be higher in your home market. That said, our exports would be stronger than Califirnia's.

 

Hope this helps?

 

Cheers,

John

Interview with Arlene Rampono from d'Arenberg

Hi Kasey,

Good to hear from you.

I am glad you enjoyed herself at d’Arenberg recently.

I will try and help out with your questions.

1. How do you feel about Australia's current wine market?  The current Australian wine market is overall positive.  Australian wineries are producing greater numbers of premium wines that promote regionality.  Australian consumers are reasonably well educated more confident with the economy than most other countries, so there spending on wine has continued and in some cases strengthened.

2. How many cases do you produce annually? (so we can get an idea of the winery sizes that we are comparing).  We produce approximately 300,000 cases a year.

3. About what percentage of your wine is exported? On average 70% is exported.

4. Which countries do you choose to export to and why? We export to over 50 countries.  A full list is provided on our website.  Since d’Arenberg’s inception, the owners (the Osborn’s) have always valued and seen value in exporting Australian wines from family owned wineries to the rest of the world.  Spreading the good word about the quality wine d’Arenberg produces globally has always been important to the family and to the brand.  Recently d’Arenberg was one of the founding members of a group called AFFW – Australia’s First Family of Wine.  This is a group of family owned wineries that produce quality wines, have stories and lots of personality. – http://www.australiasfirstfamiliesofwine.com.au/ .  While we founded the group 2 years ago, the principles behind the group are the same reasons why d’Arenberg exports to so many different markets.  In addition it makes sense commercially not to have all your eggs in one basket.

5. How would you compare Australia's wine market to California?  Given the ongoing recession in the US, the Australian wine market is more buoyant.  Consumers are buying at higher price points in Australia as their outlook on the economy is brighter than those generally speaking in the US. They are similar in that both markets have strong loyalty to local wines. 

Arlene Rampono
Regional Sales Manager

d’Arenberg

PO Box 195 Osborn Road, McLaren Vale SA 5171
ph: +61 8 8329 4873
fax: +61 8 8323 9862
mobile: +614 02 844 841 www.darenberg.com.au

Interview with Charles Melton Wines, Barossa Valley, South Australi

Hi Lindsey,

I have spent much of the last ten years managing Australian wineries sales both 
domestically and internationally. At Charles Melton Wines we only make a limited 
amount of wine each year and sell out of each vintage so do not experience the 
issues that a lot of Aussie wineries are currently facing. Below I have put 
together a bit of an overview of the market.

1. How do you feel about Australia's current wine market? 

There has been a real consolidation in the Australian market in the past few years. Producers have had to change their production to suit the demands of the market both domestically 
and internationally. I feel as though as an industry we are starting to get the 
mix in balance.(supply versus demand) A few low yielding vintages have also 
helped in not leaving us with too much of a surplus as an industry. Our 
domestically market has travelled well and some emerging export markets have 
really helped the industry. 

 
2. How many cases do you produce annually? 

Average approximately 15,000 cases per annum.

3. About what percentage of your wine is exported? 

Approximately 30-35%. 

4. Which countries do you choose to export to and why?

 We have traditionally exported to the UK, Ireland, Canada and USA as did most Australian wineries in the past. The exchange rate with a weak Aussie dollar was our advantage as a 
country when we were developing these export markets. Sales were strong when our 
currency was weak in comparison to theirs. The rapid increase in the Australian 
Dollar compared to the USD, Canadian dollar, Euro and Pound has made Australian 
wines a lot more expensive in these countries. 
Here's an example of the rise in the Aussie dollar compared to these export 
markets. Highlighting the exchange rate towards the end of 2008 compared to what 
it is today and showing you the increase in the Aust dollar. 

US Dollar  now $1.05   Oct 08 .64   64% increase
UK Pound   now .68 Oct 08 .39   74% increase
Can Dollar   now 1.06 Oct 08 .78   36% increase
Euro    now .8085  Oct 08 .48   65% increase

This has meant that we have also lost our competitive advantage against 
producers that trade and operate with USD, English pound and Euro. (eg. Spain, 
Italy, France, South America.)
Therefore most Aussie brands have needed to support the exchange rate increase 
by lowering their prices during the last few years to maintain market position. 
Emerging markets with a strong currency similar to the Aussie dollar have 
therefore come into play the last few years. Eg. Asia/Russia. 
The Aussie domestic market has travelled pretty well during this time which has 
kept many wineries afloat but there is definitely an increase threat from 
imports due to the competitive advantage they now have importing into our 
country. Plus their lower costs of production. Staff, taxes, shipping etc. 
Consumers are far more conservative when it comes to high end wines with the 
increase reporting of doom and gloom for the world economy and the possibility 
of Australia experiencing the recession that much of the world has experienced 
since 2008.

 
5. How would you compare Australia's wine market to California? 

Very hard question. Both countries have a wide range of producers from high volume, low 
priced wineries to small volume, super premium wineries. Both countries have 
quite loyal domestic markets. California would be experiencing the advantage of 
a low US dollar for their export markets at the moment. The premium regions in 
both countries should still be travelling pretty well due to the limited nature 
of their production. 

Feel free to send me an email or give me a call if you have any further 
questions and good luck with your studies?


Regards,
Sam

Interview with Molly Dooker, McLaren Vale, South Australia

I've decided to copy and paste the response that we got, so you can see the exact responses ( I still can't repeat enough how much I love these guys! ) :

Hi Lindsey,

We are so happy to hear that you loved the winery tour here and most of all the 
wines! Sorry that I have not gotten back to you sooner, I wanted to gather some 
information from both the Winemakers (you may have met, Pete) and our Australian 
National sales person (Nick) who had a great back ground in the industry. So 
here goes:

1. What do you think about Australia's current wine market?
Australia’s wine market is facing one of the most challenging times in its 
history. Five key structural issues have adversely impacted the industry, 
namely;
 # The Global Financial Crisis (GFC) has reduced worldwide demand for Australian 
wine consumption (along with other luxury goods).
 # Oversupply – Extensive vineyard plantings planned during the high growth era 
of the late 90’s and early 2000’s are now producing fruit. Australian 
viticulture production now supplies approximately 200% of domestic consumption, 
leading to increased pressure on exports and downward pressure on both grape and 
finished wine prices at a time when global demand for wines is reducing.
 # The strong $AUD – since the GFC, the Australian dollar has risen 
significantly against foreign currencies, raising Australian wine prices at a 
time when global and export wine prices are in decline.
 # Water / Weather  – Continued drought and high water prices in Australia have 
impacted the cost of growing grapes. Recent vintages have also seen heat waves 
(2007 / 2008) and large scale botrytis infections / crop losses (2011) which 
have decimated grape grower’s incomes.
 # Competition – significant improvements in large scale, low cost, quality 
winemaking in France, Italy, Spain, Chile and Argentina have displaced 
Australia’s previously unassailable position as the world’s low cost value wine 
producer,
Despite this, Mollydooker sales continue to grow in Australia both via the trade 
and direct to consumer channels.

2. How many cases do you produce annually?
We try and aim at 60,000 cases every year. This may fluctuate by +/- 10,000 
cases depending on season variation.

3. About what percentage of your wine is exported?
90%

4. What countries do you choose to export to, and why?
Canada, Denmark, Germany, Hong Kong, Indonesia, Israel, Japan, Singapore, 
Switzerland, Taiwan, Thailand, Singapore & Malaysia, United Kingdom, and USA. 
Mostly Sarah and Sparky had personal relationships with these people, and also 
persistent people who keep asking for our wines.

5. How would you compare Australia's wine market to California?
Australians, like Californians, are very parochial. We tend to drink a lot of 
Australian wine and particularly from those regions where we live. Our favourite 
varietals are Chardonnay, Shiraz and Cabernet Sauvignon. 70% of all Australian 
retail wine sales occur through the supermarket chains Woolworths and Coles, 
which creates significant price competition in the market. This combined with 
the oversupply, means there are great bargains to be had for consumers

I'm not sure if you have the chance to check out our website (both a Aussie and 
USA), you might find some of the info and videos quite helpful as well: 
www.mollydookerwines.com 

We wish you all the very best success with your studies. :)

Simone
Helping Hand