People in our industry are going through great hardship. One of the great things about the wine business is being part of a community that looks out for people and rallies to help people going through tough times.
Some forces bringing change, though, are impossible to stop. So although in this article I focus on the opportunities that the current times are creating, let’s don’t forget those who are doing it tough.
One of the first lessons I learnt about selling wine on the road, was that as a salesperson we are often offering a solution to our customers’ problems. The trick is seeing what the problems are, ideally before the customer has seen them.
The answer to the problem, unsurprisingly enough, would inevitably be a wine that the enterprising salesperson just happens to have in their portfolio, available at the right price, sure to make the retailer’s customers delighted that there is enough in stock for their dinner, their party or the upcoming wedding in the family.
Problems bring opportunity, and at the moment, if we read the sales figures, the newspapers and the LinkedIn feeds, we have a boatload of opportunity.
One thing to reflect on is what our wine is doing for our customer’s business. Is it driving customers into the store because it’s so popular? Is it bringing diversity to the offering that attracts customers looking for new discoveries?
Is it something with rarity that helps position the store as a stockist of hard-to-find wines? Is it a wine they can make a higher margin on? Or sell through in quick time?
How we find solutions will be the making or breaking of our businesses over the next few years. If we’re operating in categories that are shrinking, selling to a customer base that is drinking less and spending less, just working harder on the strategies that were designed for a different market won’t work.
Optimising declining performance is a Kodak strategy. The wonderful thing is that innovation is becoming essential, not a side project. Necessity is the mother of invention is a cliché for a reason. The other great thing to see is that people are responding, innovating and making their moves.
A few problems and solutions have caught my eye recently, and there are valuable nuggets of smart strategy in each of them to reflect on and get inspiration from.
1. The Problem – Inflation in wine retail prices plus cost of living pressure, leading to sluggish sales
The Solution – This is not innovation – it’s strategy – but in the current margin-hungry wine retail environment, Dan Murphy’s and BWS did start swimming against the tide, increased their competitiveness with discount activity, and got the benefits in terms of four straight months of increased year on year sales from September to December.
Their margins took a hit, but they have gained market share and revenue in a downturn, which they can turn into profits down the track.
In the current environment, we all have levers of price, discount and other marketing support. We can also direct our time and effort to trade that are responding to the consumer trends, if we think that will give us the best return on our spend.
2. The Problem – Changing consumer preferences with white and sparkling wines performing strongly, red wines especially Shiraz and Cabernet Sauvignon, struggling
The Solution – Via acquisition, gain more exposure to brands that are in growth categories. The bonus is that vineyard and winery valuations are lower due to the oversupply and the fall in wine consumption.
Wirra Wirra first purchased Ashton Hills, giving them access to Pinot Noir and Chardonnay, and then followed up with the purchase of Hahndorf Hill with its expertise in Pinot Grigio and Gruner Veltliner.
3. The Problem – Younger consumers consuming less alcohol in general and less wine
The Solution – Gen Z consume a wider portfolio of beverages, with wine getting a smaller ‘share of throat’.
Spritzers including RTDs, spirits, beer and no-lo options are all having an impact. Venues are responding with drinks to suit their preferences and some wine businesses are ‘meeting them where they are’.
At Home of Plenty on the Fleurieu Peninsula, rather than a traditional cellar door, the owners have created a venue that offers a range of drinks that includes the Home of Plenty wines, but also a selection of other drinks (limoncello spritzers, spirits, non-alcoholic options) so that everyone in the party will be well catered for.
It’s a stylish, Insta-friendly venue that is perfect for a birthday gathering. Home of Plenty are not alone, but very few have nailed the brief better when it comes to being accessible and relevant to younger consumers.
4. The Problem – Growing inventories, slower sales, dead stock
The Solution – The beginning of the Sam Fischer era at Treasury Wine Estates has had a rocky start, with a writedown of $687 million of the value of its USA business.
It’s a big number but the process of writing down assets, especially stock valuations, is one that a lot of Australian wineries are going through. It’s important, and necessary under accounting rules, but it is also a great chance to reset, and to learn whatever it is that we need to understand to avoid it coming around again soon.
A clean slate may mean some value has been wiped out, but mentally a clean slate has value in itself. Our opportunity is to make the most of it.
After the turbulence of early Covid, followed quickly by the upswing in purchasing for drinking at home during mid to late Covid, we’ve entered a rising interest rate, higher inflation environment, which along with changes in consumption, is creating the most difficult market that I’ve seen in the last 30 years.
In about five years’ time, I think we will look back and see that some people used this opportunity, this crisis, to respond to the changing dynamics in ways that created lasting value.
Our mission is to be among them.
• This article first appeared in the January/February 2026 edition of WBM – Australia’s Wine Business Magazine. Click here to subscribe.