There were no punches pulled by the wine industry experts who addressed last week’s WA Wine Industry Outlook Conference 2005.
There were no punches pulled by the wine industry experts who addressed last week’s WA Wine Industry Outlook Conference 2005.
Delegates were left in no doubt that the wine industry, both in Western Australia and on a national level, is under significant pressure.
While the conference proved a sobering reminder of the current state of the domestic wine market amid ongoing oversupply, it was also an opportunity for industry leaders and experts to offer advice and solutions for the wine community to turn its fortunes around.
Wine Industry Association of WA president John Griffiths was first among a forum of diverse speakers to cover topics from the nature of the WA market, through to the varying challenges of wine exportation.
Mr Griffiths provided a blunt reminder of the industry’s current malaise: “We’re doing it a bit tough in the [wine] industry, everyone knows that.
“But it is only going to be through innovation and collaboration that the industry will pull itself out of its current slump.”
State Development Minister Alan Carpenter told delegates that, despite the sector’s troubles, the value the wine industry to the state’s economy showed WA was not all “rocks and gas”.
The WA wine industry generated $500 million last year, $50 million of this from exports.
Helping further the growth of exports and the fortunes of wine producers, Mr Carpenter said, were initiatives such as the WA Trade and Development office opened in Los Angeles three weeks.
It will be through this office, and the appointment of David Doepel as regional director in Los Angeles, that the state government hopes to spearhead a WA wine invasion of the US.
Steve Burns, who has been recruited by the WA Wine Industry Association to spearhead the US marketing initiative, agreed that the US was the future of WA wine exports.
Mr Burns said only about 57 per cent of the US population of almost 300 million people regularly drank alcohol, representing a complex array of challenges for WA wine exporters.
As Mr Burns told Gusto in April this year, while wine has become the preferred alcoholic beverage for many Americans, gaining entry to the market often involved navigating complex shipping and distribution challenges. Marketing Australian product to an audience already accustomed to old-world wine choices was another hurdle.
The American wine psyche had some “unique” aspects, Mr Burns told delegates. For example, there had been a 39 per cent increase in the sale of pinot noir since the release of the movie Sideways.
Department of Industry and Resources business and trade services group deputy director general, Kevin Brahim, said building brand awareness and a strategic approach to future export initiatives were vital steps for the industry’s future, with regard to both the US and other export markets, including Asia.
On the home front, winemakers were provided with further evidence of the increasing pressure their products faced at the retail stage – as if any was really needed. AC Nielsen associate director Vaughan Ryan said: “The wine market is flat and under pressure from premium beer and RTD [ready to drink] beverages.
“Growth is going to be difficult,” Mr Ryan said. “And growth will have to be organic for future gains to be made for competitive retail space.”
On the positive side, WA’s wine industry growth over the past year had outstripped the traditional Australian wine growing areas such as the McLaren Vale, Padthaway and Barossa, he told delegates.
Nelson Wine Company principal Alan Nelson agreed with Mr Ryan’s earlier assertion that the continued rise of cleanskins represented a major challenge to the viability of the wine industry.
With their questionable regionality and lack of labelling, pricing or policing, the increasing availability of cleanskins may be a win for consumers, but would continue to be a thorn in the side of wine producers, Mr Nelson said.
