WA wine export market development
Western Australia has achieved a significant increase in its premium regional wine exports this year.
The value of bottled wine exports from January to September 2015 had increased 21% on the same period last year. With the October–December quarter usually the strongest, exports are on track to reach around $44 million in 2015.
This is our best result since 2012 when exports grew 30% to $44.8 million mainly due to growth in exports to China which became our largest export market. In the following two years exports to China slowed and then declined as Xi Jinping’s anti-gifting policy started to bite.
Exports to China have grown 49%, the United Kingdom increased 40%, Singapore rose 26%, Canada 34% and our wine exports to Japan more than doubled this year. Although our wine exports to Hong Kong decreased by 7% and the United States by 10%, our premium price segment grew strongly in all markets.
Fine wines (super-premium, ultra-premium and icon) are the fastest-growing segments of the global wine market, where WA performs the best and is the most profitable for producers. Fine wines are exported in the above $10 per litre, $20 to $50 per litre, and above $50 per litre price segments. The average export value of bottled WA wine in our main markets was: Japan $13.82 per litre, Singapore $12.91 per litre, USA $11.93 per litre, Canada $10.30 per litre, UK $8.80 per litre, HK $8.52 per litre and China $7.12 per litre.
The strength of the WA wine industry is in the premium market, alongside wines from the great wine-producing regions of the world, such as Bordeaux and Burgundy in France, the Napa Valley in the United States, and Marlborough in New Zealand.
Margaret River and Great Southern account for more than 80% of premium wines exported from WA. Although all of our wine regions, sub-regions and nearly 50% of producers are involved in export, just a few leading producers dominate exports. The distribution of export price point segments for each of our major wine regions is shown in Figure 1. Margaret River and Pemberton are high value regions focusing supply on the $10-$20 per litre and over $20 per litre segments.
These figures suggest that while not all producers export there is room to increase export volumes and price points. All WA producers benefit from the development of export markets.
With industry’s aim of doubling the value of wine exports by 2018 and sustaining this growth for the next 10 years, the department has been focusing resources and effort in the following two initiatives.
International Marketing Program
The department and industry (Wines of WA, regional associations and producers) have partnered in the International Marketing Program 2011-2017. The program has delivered export market development activities aimed at increasing the awareness of our fine regional wines in our key markets and building in-market relationships. These include China/Hong Kong, USA/Canada, UK and Singapore, and potentially Japan, South Korea and South East Asia. The program includes a range of in-market and in-bound activities and events involving trade, media, wine educators and market influencers. The program has helped build strong relationships with key influencers who are now our WA wine ambassadors in Asia.
This program of initiatives has contributed to the increased exports this year. Recent successful initiatives included visits by producers and representatives of the Margaret River Wine Association to China (Shanghai and Chengdu) and Hong Kong, and by the Great Southern Wine Association and its members to Singapore, to promote our regional fine wines at a series of masterclasses, media and trade tastings, and wine dinners.
Wines of WA also facilitated media and buyer tastings which included:
- UK distributors ABS Wine Agencies: from this tasting, four WA producers secured representation in the UK market.
- Le Pan Magazine: a new publication aimed at high-end consumers in Hong Kong and China. Australasian editor, Sophie Otton toured WA wine regions over a five-day period, tasting wine in Geographe, Margaret River, Great Southern and Perth. Accompanying her on the trip were Peter Forrestal and Erin Larkin.
Premium wine export market development strategy
The WA wine industry has recognised the significant opportunity to grow premium wine exports. WA exports only 13% of wine produced compared to our key competitors New Zealand at 68% and Barossa at 32%. We are very small players globally supplying 1% of Australia’s and 0.06% of global wine exports. For these reasons, key members of the industry have recognised the opportunity to strategically develop key export markets and channels, and the need for market presence and potentially an in-market joint approach.
The department and industry are working to develop a more targeted and greater resourced premium wine export development strategy to achieve these aims. The strategy will support new collaborative and coordinated ways of doing business within the industry, and with our customers, value chain partners and consumers.
The new strategy for future growth in wine exports will build on the success of our leading wine exporters and regions and help build the capability of all our fine wine producers and regions to export.
For more information on these initiatives, contact DAFWA Grape and Wine Project Manager Glynn Ward.