US wine industry

Rising prices turn restaurants away from Australian wine

November 24, 2019
By Alana House

The 2019 Benchmarking Report from Restaurants and Catering Australia (R&CA) shows a swing away from featuring Australian wine on menus due to price pressures.

The industry survey that forms the basis of the report found 38.7% of businesses believed it was ‘very important’ to showcase Australian wines on their menu, which significantly down from 57.3% in the 2018 survey.

An additional 23.53% of survey respondents in the 2019 survey rated showcasing Australian wines on their menu as ‘important’, which is similar to last year.

However, 21% of respondents indicated that featuring Australian wines on their menu was ‘not important’ or ‘not very important’, which was is a large increase from the 6.7% listed last year.

Australian wine

For the 26.8% of respondents who indicated that the percentage of Australian wines on their menu had increased over the past five years, the main reasons provided included customer demand, quality of local wines and price.

Reasons for choosing Australian wine

Respondents were also asked what the biggest contributing factors were in determining whether they featured Australian wines on the menu.

The top reason at 51.27% of respondents identified ‘Price’ as the biggest contributing factor, which was followed by market demand at 36%.

The factor which contributed the least in determining whether Australian wines featured on the menu was ‘relationship/sales calls from Australian wineries’ (8.6%).

Respondents were also asked about the main method they used to purchase their wines. Purchasing wines from a third-party wine distributor was the most popular option among business-owners, with 64.1% of respondents indicating that this was their preferred option.

Also, 33.2% of respondents indicated that they purchased their wines directly from a winery, while 14.1% purchased wine online.

This represents a much larger portion of businesses purchasing wine online in 2019 compared to 2018, at the expense of direct relationships with wineries and third-party distributors.

Other comments included how the business produced their own wine on-site as they operated their own winery.

“This year’s report shows a snapshot of an industry that is under significant pressure,” said R&CA CEO Wes Lambert.

“Rising food costs, wage costs, energy costs, rent and the disruptive influence of digital technology such as online food delivery all point to a difficult year ahead.”

The 2019 R&CA National Benchmark Report covers favoured bank and superannuation funds, business expectations, outdoor seating areas, business costs, skills and labour, digital technology, use of social and digital marketing channels and the importance of serving Australian wines.

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