Skip to main content

Exports grow 20 percent to $2.76 billion, but America goes backward

By Tuesday 24 July 2018August 26th, 2018No Comments

The value of Australian wine exports grew 20 percent to $2.76 billion in the last financial year, according to Wine Australia’s Export Report.

This is the highest rate of growth in 15 years.

The average value of wine grew nine percent to $3.24 per litre – its highest value since 2009.

Not so positive was our performance in America – the world’s largest wine market – which saw no growth in value in the same period.

Wine Australia CEO Andreas Clark said, “Of our five largest markets, only one market – the USA – didn’t grow in value last year. Importantly, the USA is the world’s largest wine market and Australia has the opportunity to capture more of the premium end of the market as American consumers trade up to higher priced wines.

“Australia has been very strong in the commercial half of the USA market (54 percent of the US
off-trade volume is wines under US$8 per bottle), but this market is shrinking. As American consumers transition from commercial wines to more premium wines, Australia has to be there to capture the opportunity.

“The premium end of the USA wine market is enjoying robust growth, as are Australian exports in nearly all price points above $10 per litre (albeit off small bases) and we’re working to accelerate this growth in demand through a marketing push supported by the Australian Government’s $50 million Export and Regional Wine Support Package.”

On Sunday, Wine Australia launched the inaugural Australia Decanted at Lake Tahoe, California. This four-day wine education program is immersing 100 key influencers from the USA in Australia’s diverse wine scene to raise awareness of the breadth of Australia’s fine wine offering and the perception of the Australian wine category in the USA.

“Australia Decanted will become Wine Australia’s signature annual event in the USA and will be followed by Aussie Wine Week in September this year and Aussie Wine Month in September 2019,” Andreas said.”

Volume grew by 10 percent to a record 852 million litres, or 95 million 9 litre case equivalents.

The average value of exported wine increased by nine percent to $3.24 per litre.

There was a record average value of bottled wine: the value increased by 19 percent to $2.2 billion, the volume increased by eight percent to 376 million litres (around 42 million 9 litre case equivalents) and the average value of bottled exports reached a record $5.94 per litre.

There was record value and volume of exports in bulk containers: value increased by 22 percent to $504 million, volume increased by 11 percent to 467 million litres (or about 52 million 9 litre cases) and the average value of bulk exports increased by 10 percent to $1.08 per litre.

The increase in average value of bottled exports was shared by 69 of the 127 destinations for Australian wine, with demand for premium Australian wine in Northeast Asia being the biggest contributor to value and volume growth.

The growth in exports was driven by a 15 percent increase in active exporters compared to the previous 12 months, with 2,298 exporters shipping 23,761 unique products. Of these exporters, 1,616 either started exporting or grew the value of their exports, contributing $653 million to the growth in overall export value.

In the 12 months to June 2018, all but one of Australia’s export price segments showed growth, as detailed in Table 1 below, with exports above $10 per litre increasing by 45 per cent to $855 million, a record value.

The key price segments that drove this growth were wines priced $20–29.99 per litre FOB and $50–99.99 per litre FOB, both of which grew by over 80 per cent. Also driving growth in overall value is the $2.49 per litre FOB and under segment, reflecting the increase in demand for bulk shipments.

Nearly all regions that Australia exports wine to increased in value in the past 12 months, with Northeast Asia having the stand out performance, growing by 51 per cent to $1.2 billion.

Other regions that experienced encouraging growth included:

• Europe, by 7 percent to $608 million;
• Southeast Asia, by 3 percent to $168 million;
•Oceania, by 15 percent to $99 million; and
• The Middle East, by 39 percent to $30 million.

North America was the only region to decline in value, by four percent to $624 million, a $12 million increase in the value of exports to Canada only partially offsetting a $39 million decrease in the exports to the USA.

The top 5 markets by value in 2017-18 were:

• China, including Hong Kong and Macau (40 percent of export value);
• USA (15 percent);
• United Kingdom (14 percent);
• Canada (7 percent); and
• New Zealand (3 percent).

Leave a Reply