Skip to main content
Expert OpinionNewsSustainabilityTech Conference

Beyond The Tech Conference, What Now?

By Wednesday 29 June 2022One Comment

So beyond the Technical Conference, where do we go from here? WBM doesn’t normally publish paid content from the magazine on this website, but in the interests of discussion about the future of the Australian wine industry, we publish David LeMire MW’s column from the May-June issue. Please give us some feedback.

 

We are in the eye of the storm. We are at one of the most fascinating moments in our evolution as a grapegrowing and winemaking country, with all kinds of challenges, and all the opportunities of the world reopening after Covid.

As we see our political leaders competing to offer a vision of leadership, what leadership do we want and need in the wine business?

What are the crucial issues facing us and who is best placed to provide the leadership that we need to give long term success, resilience, sustainability and profitability?

I asked a diverse group of people I consider to be leaders in wine – including grapegrowers, winemakers, educators, marketers and leaders of industry bodies – for their views on the top one or two issues facing the wine industry and who is best placed to provide leadership on those issues, and I got some great insights into what these leaders see as the most important challenges.

There were four main themes that each got multiple mentions: Industry organisations, Marketing Australian Wine, Sustainability and Quality. Below are the dot points summarising the responses and below that, my commentary:

Industry organisations

  • There is ongoing concern about the number of peak organisations, the amount of duplication and the effectiveness of representation.
  • One small producer was strongly critical of the lack of a strong and coordinated voice for small producers, felt their interests were not well represented, and that the full WET rebate should be reinstated or the WET tax abolished.
  • From a different perspective of a larger producer, the WET rebate was seen as encouraging and supporting too many small brands, and preventing “effective consolidation”.
  • With the number of bodies, both industry and government, at regional, state and national level, collaboration is crucial, but is currently not very effective, and there seems to be no clear plan that defines what each body does, to avoid duplication and waste.
  • Giving producers value from the industry bodies rather than having bureaucracy consume funds.
  • Having an effective consultation mechanism to feed through to peak industry bodies like Wine Australia.

There are lots of divisions in the industry, between growers and producers, between different states and regions, between small and large producers.

Many producers outside of South Australia feel disconnected from the national peak bodies that are based in SA.

The organisations closest to the producers and best able to know and understand their needs are the regional associations.

However, the regional bodies tend to have scarce money and resources, and limited influence on the agenda for the peak bodies.

What would happen if the levies paid by growers and producers went firstly to the regional bodies, who passed on an agreed percentage to the peak bodies, and had significantly more influence over them, as well as significantly more resources at regional level?

Strong regional bodies are a feature of the structure in Europe, and while their system is by no means perfect, it is worth us looking carefully at the ways in which it is effective.

To quote industry commentator Peter McAtamney: “Where once the appellation control system was painted by the New World as the Achilles’ heel of the Old, regional organisations all over Europe are putting into place programs designed to improve the soil, the vines, the vineyards, the cropping regimes and the winemaking so as to improve the quality, profitability and sustainability of each region.”

Marketing Australian Wine

  • Spreading the risk in export markets was the number one marketing concern.
  • Accessing government support for market diversification.
  • Building sustainable long-term markets.
  • Retail concentration in Australia was also raised as a concern that doesn’t get so much airtime at the moment, but that has been quietly growing.
  • Connecting with consumers and listening to them so that we stay relevant and attract the next generation.

Wine Australia is obviously one leading voice in developing export markets, and they do a tough job with limited resources. Having Wine Australia staff who have serious wine credibility hosting tastings and providing educational content (as Mark Davidson does in the USA) is a core function that could add a lot of value in Asia and Europe as well.

We need to be consistent with our market presence across a wide range of markets, and avoid being seen as opportunistic or fair-weather friends.

One of my concerns, not reflected in the comments from my survey, is the need to communicate messages about wine and health to the government and the public. This, along with lobbying government on taxation and industry support, are in my view the most important functions of Australian Grape & Wine.

Sustainability

  • Managing climate change and in particular water security.
  • Pursuing carbon neutrality but also “genuine sustainability measures beyond simplistic carbon offset schemes”.
  • More transparent and credible certification of sustainability.
  • Regenerative farming and biodiversity – in the view of one respondent, the term ‘sustainability’ “is quickly becoming a meaningless term” and a more holistic approach to land management is needed.
  • Becoming a more diverse and inclusive industry, and not just in terms of gender and understanding the importance of this to the future relevance of wine in our communities.

Sustainability needs many advocates, but the local regional associations can play a key role in linking growers and producers with national bodies, and helping wineries understand the various options and opportunities for more sustainable viticulture and winemaking.

There are a myriad of organisations in this space, both wine specific (Sustainable Winegrowing Australia, the AWRI, ASVO) and non-wine specific (e.g. organic and biodynamic certification bodies).

There’s a large ecosystem that revolves around helping wineries protect their ecosystem. We also need to be aware of the growing expectation in export markets of more transparency, certification and authenticity in our sustainable messages.

Quality

  • “The seminal issue that requires constant vigilance and championship is the focus on quality improvement.”
  • Quality in the vineyard is a huge need and opportunity – “some regions with reputations as high-quality regions need to do much more to improve the quality of vineyards.”
  • “It is remarkable how quickly and often this effort for improvement becomes sidelined by peripheral political issues.”

The comments on quality were fewer in number, but quite compelling, and the quality challenge is integral to marketing and sustainability. We have a robust wine show system, but much less focus on vineyard quality. Recognising and valuing great viticulture more highly and visibly can create huge value for the industry over the long term.

We can all be leaders in pushing the quality message, but in export markets Wine Australia and regional associations have a key role. One small but symbolic change would be to make value per litre the key metric that we use to measure our export performance. If that number is not healthy and increasing, then we have a major problem.

Read David LeMire’s views in each issue of WBM – Australia’s Wine Business Magazine. Australia’s #1 Wine Industry Magazine since 2005. Subscribe here.

The Urgency Of Levy Reform

One Comment

  • Ashleigh Seymour says:

    If it wasn’t for my colleague (sales and marketing manager pfff) absconding with the hard copy of WBM from the office I may have read and linked Brian and David’s articles earlier. There definitely seem to be problems with the structure of how levies are used and distributed and potentially fixing or realigning this would have the flow-on effect of improving many of the other issues and topics that have been brought up in this article and at the AWITC last week. I have firsthand experience of how levies work when they are first directed to regional organisations after working in the Montepulciano Appellation for 11 years. Each regional body, whether or not famous like Brunello and Barolo, has a voice, and a strong one at that, and the resources to promote their region and brands locally and internationally. This is backed up by serious funds from the EU government which were touched on by Bryan Fry’s closing address at the conference. I don’t remember the figures but our government’s support to the wine industry in terms of funding Industry 4.0 within our vineyards and wineries and funding promotional activities for export flails in comparison. Yes, they are $ for $ money a lot of the time but enough to fund building a winery or improving efficiency or sending your team to some far-fetched corner of the globe to educate consumers of the delights and magic that we have in this drink called wine. The real wine that is, not the one with all the alcohol taken out. Now don’t get me wrong, the industry has a responsibility to encourage responsible drinking and innovation, and if there’s a market for it then why not get on the train if it feels right for you. I just feel like we’re getting a long way from the heart and soul of wine when we have to start adding maltodextrin and proline into or beverage to make it taste like something vaguely associated with wine. Growing grapes to distill into alcohol…that doesn’t seem like a sound business model to me either, not for the long term. Convert to potatoes or grain if that’s your long game. It may though help a few people out of the very big hole China has left us in the short term, and whilst people still haven’t figured out that buying a bottle of grappa, some soda water, and a lemon is much more cost-effective (and sustainable) than buying hard seltzer, well we may as well milk it I suppose. Who’s fault is China anyway? Is it little producer Joe Pastrami’s fault for jumping on the bandwagon that was pushed quite hard by industry bodies? Watch out for those bandwagons. Yes, we all have a responsibility to insure ourselves against any particular market fallout (see Russia as a prime example) but perhaps more could have been done by industry bodies to encourage producers to put their eggs in several different baskets and lobby the government more effectively in the first place so we didn’t end up in this mess. 2:1, that was one of Mr. Battaglene’s fun facts to open the conference. Wine in the tank to sales ratio, looks scary and daunting and some suggestions as to what to do about it wouldn’t have gone astray. Anyway, I digress, we pretty much come back to the whole debate on levy reform.
    There are plenty of other things to through in there too, though.
    Why are we getting a bad rap about alcohol? Hard seltzers and the like are basically cold hard alcohol masquerading as soft drinks for kids. A bit like flavoured vaping stuff, now they’re all doing it.
    Gender balance – we’re still not there, all it takes is a quick scan around the exhibit hall at WineTech to figure out that men still outweigh women by shitloads.
    Wages – wine industry wages in production, middle management, and cellar door management are far below the national average. If you’re a woman, add a bit more to that. We need more transparency in this space if we want to encourage new talent and retain it in our industry.
    I must admit I left the conference a bit confused thinking we need to make low-alcohol wine that tastes like beer that’s also natural (not sustainable that’s lost its buzz apparently), yet people still like the idea of wine and yes we should also be championing a sense of place and story telling. That’s a lot to get your head around. ALternate vineyard rows with hops maybe? Maybe we should just get back to the basics of making delicious, value-for-money wine and leave the meddling to the multinational food giants out there.

Leave a Reply