The Australian revolution: wines from down under are number two—with a bullet

Cheers, July-August, 2004 by Pameladevi Govinda

Australian wine is big and we're not just talking about their style of shiraz. The wines made Down Under have surged past French imports to become second only to Italian vino in the U.S. Statistics show that 18 million cases of Australian wines were sold here last year, with sales growing by an astonishing 38.5% from 2002. The growth even suggests that they could soon surpass Italy and become America's best selling import.

In light of Australia's immense success, sommeliers are tweaking their lists to include more Aussie juice, adopting a new approach when it comes to the wines from Down Under.

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There are a myriad of reasons why Australian wine is experiencing surging success in the U.S. market and the most obvious one has to do with taste. In general, Aussie reds are easy and lush while their whites (primarily chardonnay and semillon) are big and round. Richard Verrecchia, beverage director for Outback Steakhouse, echoes a sentiment held nearly unanimously by the industry. "Australian wines are incredibly drinkable, they don't have too much of a tannic edge, they're fruit forward and just really easy to drink."

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The wine list at Outback is primarily California, but the consumer shift towards Australian wines has encouraged Verrecchia to increase the Aussie inventory to almost fifty percent of listed wines. Verrecchia adds that the taste profile of Australia is catering to a market ready for change.

"Shiraz is certainly the growth vehicle when it comes to the boom in Australian wine sales but I also think that there are some great blends coming out of there that we're featuring. A lot of people find single variety California cabernet a little too big and tannic, so an Australian cabernet-shiraz is perfect for that consumer. Shiraz wines are also winning over a lot of merlot drinkers because the Australian style is similar but spicier."

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EASY READING, EASY DRINKING

Eric Buxton, wine director at Excelsior in Boston, offers an additional theory on what motivates the popularity of wines from Down Under. "The labels are in English, making it easier for consumers to recognize vineyard names and to understand exactly what is in the bottle, whereas in the old world, even the value-driven wines are difficult for some to comprehend."

Buxton's point has been ringing in the ears of the French for years and we are now witnessing the influence of Australian wine styles and nomenclature in France. Perhaps acknowledging that French wine sales were down by ten percent in the U.S., and Aussie wines were at an all-time high, the French government recently relented and permitted winemakers to label their wines with the name shiraz as well as syrah (they are the same varietal).

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Price point is high on the list as well when it comes to the success story of Australian wines in America. The weak dollar is showing influence on what consumers buy. Wines from Europe are reflecting the strength of the Euro, and though the U.S. dollar is also down against the Australian dollar, Aussie producers are holding prices: there is a wine glut to deal with down there, after all. According to the Australian Wine and Brandy Corp. the record of Australia's 2002 harvest was recently topped by 9 percent. (The drought in 2003 caused a drop in volume.)

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In light of Australia's overwhelming flow of juice, it's fairly clear that we will see more value-driven table wines at low prices and maybe even a drop in price point for the premium and super-premium wines. Excelsior's Buxton comments, "Australia's strength is that they make a lot of medium to high-end quality wines because of the weather, it's warmer and so much easier for them to produce a lot of good wine."

TALE OF THE TAIL

When it comes to the success of value-driven wines, it's impossible to ignore the phenomenal growth of Yellow Tail, a brand that has experienced a sales boom never seen before. The brand launched in the U.S. in June 2001 when importer William Deutsch brought in about two hundred thousand cases; they went up to 4 million cases in 2003.

Peter Deutsch has this to say about why sales have gone through the roof. "I think our success is a combination of things. First of all, the visual package design of our label invites consumers to try our wines. The price point of Yellow Tail offers a lot of value and when consumers taste our product it appeals to the average American taste for fruit forward wines. We also offer five varietals, though the shiraz sells the most, we sell a chardonnay, verdelho, merlot and cabernet. Whereas when you think of other big brands their success is usually based on one wine, such as Kendall Jackson Chardonnay or Lindemans Bin 65 Chardonnay. We've been able to successfully introduce five different wines that appeal to the global consumer."

Marian Jansen op de Haar, wine director at Fleming's Prime Steak-house and Wine Bar, acknowledges the influence that Yellow Tail has had on the Australian wine industry but she points out that it's not exactly a pioneer in the category of big brand Australian wines. "Yellow Tail has made a tremendous impact on the market but they certainly did not kick start the trend. The brand came onto the market after U.S. consumers had discovered Australian wines. Brands like Lindemans, Penfolds and Rosemount are the predeccessors of Australian brand wines. When consumers saw Yellow Tail they tried it because it was another fun, new cheap wine. I think it grew to be so popular because it's a crowd pleaser."