THE AUSTRALIAN REVOLUTION
WINES FROM DOWN UNDER ARE NUMBER TWO – WITH A BULLET

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.

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.”

Fleming’s Prime Steakhouse and Wine Bar

The wine list at Outback is primarily Californian, 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 Californian 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.”

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).

SHIRAZ WINES ARE ALSO WINNING OVER A LOT OF MERLOT DRINKERS BECAUSE THE AUSTRALIAN STYLE IS SIMILAR BUT SPICIER.” –RICHARD VERRECCHIA, OUTBACK STEAKHOUSE

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.)

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.”

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 Steakhouse 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.”

If Yellow Tail wasn’t the first to give the market a wholly unpretentious, bargain level wine, it won’t be the last either. Southcorp recently launched a new brand called Little Penguin, packaged in vibrant labels depicting a cutesy picture of a penguin. It’s an attempt to appeal to young consumers who don’t want to get cerebral about wine and prefer to spend less money on a bottle. Senior vice president of marketing for Southcorp, Doug Rogers, says that the wine possesses the kind of up-front fruit and structure that appeals to the American market.

Owning the likes of Lindemans, Penfolds, Wynns and Rosemount Estate, Southcorp knows a thing or two about the appeal of Australian wines to the U.S. consumer. “Americans are drawn to Australia because the country is sort of similar while remaining exotic at the same time,” says Rogers. “Besides that, the wines of Australia are a great value relative to the wines of the rest of the world.”

Alex DeWinter, wine director at Boston’s Grill 23 and Bar, agrees with Rogers, especially at the higher-end of the pricing spectrum. “We serve a lot of high-end Australian wines like Henschke, Clarendon Hills and some of the top-end Penfolds because I find that they offer the best value at the seventy-five dollar and upwards mark.”

When it comes to the big brands, Australian wines have more of an off-premise reputation than they do on bar and restaurant lists. While Yellow Tail is, according to Deutsch, the number one selling imported brand on-premise, some bars and restaurants shy away from pouring it because it is so heavily associated with the bargain retail price. Verrecchia explains, “Yellow Tail is a huge off-premise success but we try not to serve it too much at our restaurants because customers know it as this great bargain wine. We don’t want to offend anyone with an on-premise mark up; we have to be careful.”

Of course, not all Australian wines are cheap. Figures show that one million of the eighteen million cases of Aussie wines sold here are over the $13 price point. Tony Jordan, CEO and chief oenologist of Domaine Chandon Australia, has witnessed a gradual change in the industry. “About ten years ago Australian chardonnays were all big, round and oaky. Now there is a more subtle approach to making chardonnay that is grown in cooler areas. Yarra Valley terroir offers attractive fruit opposed to big fruit flavors and shows true varietal character.”

The region Jordan discussed is home to the vineyard sites for Chandon’s recently launched Greenpoint. Their cooler climate chardonnay and shiraz wines are being introduced to the market at a time when there is an increasing trend for medium to high-end level, smaller production wines from Australia.

Rob Renteria, the sommelier at Eos in San Francisco, is keen on offering small production wines from Down Under. “The best varietals are going to come from specific regions as they do in France. People will soon be talking more about the typicity and terroir of Australia’s winemaking regions. It is up to the wine buyer to look for the wines of distinction. At first it was all the cheap mass produced wines that hit the market, now we are seeing more of the higher end wines available to us and I find that people don’t mind paying sixteen or seventeen dollars for a good glass of Australian wine.”

Subscribing to a similar philosophy, Excelsior’s Buxton says, “The predominant image of Australian wine is certainly one of cheaper, value-oriented wines but people are increasingly recognizing that they also make world class wines. Our mission is to expose diners to the lesser-known and higher-end wines. The next step is for people to become familiar with appellations but I think it will be a gradual process.

“The Australian wine industry has already started to promote themselves in terms of appellations. I’ve even been asked by winemakers and importers to write my wine list according to region instead of grape variety. Right now I think it would be a bit too confusing for diners to see shiraz in five different places on the list but I am slowly implementing changes in that direction.”

There’s no doubt about it, Aussie wines are hot and the country of never-ending experimentation and modern thinking (they were the first to use screw caps on a mass level, after all) is poised for more growth. New brands are launching, shiraz is immensely popular and Yellow Tail continues to sell like hotcakes. When it comes to restaurants, however, the shift is more gradual. The number
of Aussie wines on restaurant lists are on the rise and companies such as Southcorp say that they intend to pay more attention to the on-premise sector.

Consumers are also discovering terroir-driven wines from smaller vineyards favored by the dining establishment, from specialized importers such as the Grateful Palate, Old Bridge Cellars, Australian Premium Wine Collection and Click Imports, among others. And it seems there are only more to come.