A recent study performed by Wine Australia has found that, in the ten key markets that make up 90% of Australian wine sales, grape variety remains the single most important factor influencing wine purchases.
The study analysed IWSR data provided to Wine Australia and found that “grape variety was in the top two most important cues in seven of the ten markets.” This includes being the number one cue choice in Australia’s three most important, the UK, the US and Australia. It was also the number one choice cue in New Zealand and China and the number two cue in Canada and Germany.
The IWSR research provided to Wine Australia shows that Cabernet Sauvignon and Merlot remain the top red varieties across the board, with each being the top variety in four of the ten key markets. Australia, topped by Shiraz, and New Zealand, topped by Pinot Noir, were the markets that went against this trend.
“Apart from Australia, the only market among the 10 analysed where Shiraz is inside the top three is in New Zealand where it ranks third behind Pinot Noir and Merlot,” continued Wine Australia’s study.
Shiraz, which remains Australia’s most exported red wine grape, ranks as the fourth most consumed variety in the UK, Canada, Japan, and Singapore, the sixth most consumed in Germany and China, and the seventh most consumed in the US and South Korea. However, the current data shows that Shiraz is decreasing in popularity both domestically and internationally.
This includes the latest 2023 export data which revealed a 9% hit to Shiraz exports by volume compared to the year prior. Wine Australia also found that “none of the 10 markets reported an increase in the popularity of Shiraz but there were five markets reporting a decline in percentage of drinkers reporting consumption over the past four years.” The markets in decline were the UK, New Zealand, Singapore, Canada, and Australia. Domestically, Australia’s consumption of Shiraz decreased from 49% to 42% between 2019 and 2023.
According to Wine Australia, “the decline in Shiraz does not appear to be offset by corresponding increases in other red varieties.” Tempranillo was the only grape that showed notable growth in on-premise sales, however its 3% increase is less significant when factoring in its small starting basis.
Similarly, Sauvignon Blanc, the number one or two ranked variety in eight of the ten markets studied, has seen an increase in consumption in only one of the markets and has decreased in four. The market that recorded a positive increase was the US, which remains one of the two markets in which Sauvignon Blanc does not rank as either the number one or number two white variety.
In Australia, consumption of Sauvignon Blanc has decreased from 52% to 48% between 2019 and 2023, and in New Zealand from 63% to 55%.
Overall, Chardonnay consumption has either remained flat or has been in decline. In Australia, this decline was significant, with consumption dropping from 49% to 38% over the four year reporting period.
So what does all this mean for producers and retailers? Firstly, that Australia’s wine industry will need to take heed of forming trends to adapt to a changing wine consuming landscape. Within Australia, this landscape is becoming increasingly diverse, as seen by the decreasing dominance of the leading grape varieties.
The Wine Australia report recognises the opportunity of secondary varieties that are popular across all key markets such as Sangiovese, Grenache and Riesling. A separate report brings light to the growing importance of alternative varieties, which now represent 3% of total Australian production by volume.
The shift towards diversification is becoming even more relevant in Australia as the climate continues to warm. This means grapes that were once synonymous with their primary growing regions will have to be replanted with varietals better adjusted to the changing conditions.
