It's February 12th and veraison still looks some way off in many vineyards - it's been a cool, wet season with all too sporadic heat spikes. Disease pressure has been very high and as the rain lashed down across much of South Australia yesterday, many growers must have been wondering what else could befall them this season.
Ever since I've been travelling to Australia, drought has been a very real issue - I remember Sam Plunkett telling me over 10 years ago that lack of water for grass meant the local cows were being fed on the pulp from the orange juice factory. I was also here a couple of years ago when the mercury hit 48 degrees in Adelaide and people perished in the fires that enveloped much of Victoria.
It is therefore astonishing that the situation has been reversed with, at times, frightening speed. Weather patterns right across Australia (Perth is currently experiencing devastating fires)have been at odds with the norm and after the recent floods and cyclones in Queensland one does wonder what next?
Yesterday, I was in the Barossa at Thorn Clarke and Sam Clarke, through the mist of pouring rain, looked mournfully at his lost lawn as a plague of locusts munched on the green shoots - let's hope there is nothing else quite so biblical on the way!
Friday, 11 February 2011
Revenir - Nepenthe Winery Re-Born
For Peter Leske, the old Nepenthe winery feels like home.Having been winemaker from the start and watching its meteoric rise, seeing the winery mothballed by its previous owner, Australian Vintage, must have been like having an itch that he couldn't quite scratch. Well, Peter has now well and truly scratched that itch - having signed (along with business partner Mark Kozned) for the winery last week.
Aside from working for Alliance Wine Australia, Peter has an active client base of wineries that rely on his expertise to make their wines. This facility will bring them together under one roof and make Peter's life a little easier - that's the plan anyway....
We're delighted for Peter, not to mention for Alliance Wine Australia who will obviously use this facility for small batch processing and greeting clients when in Australia. The winery has been re-named Revenir, to return, and we wish Peter a very happy return to his home in the "hills"
Wednesday, 9 February 2011
Australia at the Crossroad
Yesterday it was the first in our regional Portfolio tastings there was much discussion at the London venue about the impact of the Australian dollar on sales in 2011. Sat at Hong Kong airport for the last few hours, waiting for my connection to Adelaide - one can't help but reflect upon the dire situation that many Australian exporters to the UK now find themselves in.
Let's face it, we've all been telling our producers to hold pricing for the last 3 years as currency went the wrong way and our economy lurched from crisis to crisis. I think we all hoped that currency would reverse at some point but what is now clear is that the good old days of exchange rates north of 2 are gone - perhaps forever. This leaves both exporters and importers dangerously exposed. Some wineries, having not increased pricing in the face of export pressure, will now be under invested as a result of falling margins. Lack of investment in crucial marketing and sales initiatives has resulted in declining brand strength - strength badly needed at a time when retail prices have to go up. For many producers, the combination of having to increase prices plus the exchange rate will see their sales volumes decline, even if margins temporariliy rally.Many importers now face portfolios denuded of anything that can be sold sub £10 on the shelf.... the costs of owning vineyards, running wineries and staff just do not add up and so one has to come to the conclusion that for Australian wine in the UK, the future is very lean business models or exceptional quality and individuality.
Fortunately, we have long seen the writing on the wall and our increasingly polarised sourcing and production strategies now seem more legitimate than ever. Nobody's denying that even for the exceptional, the currency issue is very significant but for those really exceptional, inspiring producers the compelling nature of their story is sure to endure in the face of extreme pressure. At the other end of the market, it is difficult to see how anybody that is not a producer or has direct ties to production, will be able to compete adequately in the UK market. The Australian businesses that survive in the future will see an increasingly integrated production and distribution model as the norm though the cosmetics of these arrangements will look very different to the traditional producer opens UK export office model of old.
The new model, trialled and innovated by businesses such as Alliance is lean, flexible, expert and able to add value at every turn. As the market becomes increasingly open due to the consolidations and sell-offs in the majors, further opportunities will arise and this model will become the establishment.
So what does this mean for the large numbers of mid priced, honest wine produced throughout Australia? Well, should they wish to export to the UK (and this should no longer be a default position)they need to find creative, innovative distributors willing to work closely on co-branding and lean business models. Only by doing this will we maintain Australia in the forefront of the consumer's mind and be in a position to re-build brand equity and long term sustainability.
Wine Australia's A+ policy goes a long way to putting the emphasis on quality, individuality and aspiration ( and though temporariliy challenging the withdrawal of funding by the majors might be just what the initiative needs) but it cannot single-handedly reverse the impact we will all feel this year as a result of the currency shift.
For all that we will need to get leaner, better, more creative and inspiring for the long term sustainability of the category, one cannot help but feel for those producers that have stood side by side with the UK trade for the last two decades and surely we all owe it to ourselves to now stand up and sell those wines more effectively and with more passion than ever before. If we all do this then perhaps we'll enter 2012 with Australia having overcome what is surely its most difficult hurdle yet.
Let's face it, we've all been telling our producers to hold pricing for the last 3 years as currency went the wrong way and our economy lurched from crisis to crisis. I think we all hoped that currency would reverse at some point but what is now clear is that the good old days of exchange rates north of 2 are gone - perhaps forever. This leaves both exporters and importers dangerously exposed. Some wineries, having not increased pricing in the face of export pressure, will now be under invested as a result of falling margins. Lack of investment in crucial marketing and sales initiatives has resulted in declining brand strength - strength badly needed at a time when retail prices have to go up. For many producers, the combination of having to increase prices plus the exchange rate will see their sales volumes decline, even if margins temporariliy rally.Many importers now face portfolios denuded of anything that can be sold sub £10 on the shelf.... the costs of owning vineyards, running wineries and staff just do not add up and so one has to come to the conclusion that for Australian wine in the UK, the future is very lean business models or exceptional quality and individuality.
Fortunately, we have long seen the writing on the wall and our increasingly polarised sourcing and production strategies now seem more legitimate than ever. Nobody's denying that even for the exceptional, the currency issue is very significant but for those really exceptional, inspiring producers the compelling nature of their story is sure to endure in the face of extreme pressure. At the other end of the market, it is difficult to see how anybody that is not a producer or has direct ties to production, will be able to compete adequately in the UK market. The Australian businesses that survive in the future will see an increasingly integrated production and distribution model as the norm though the cosmetics of these arrangements will look very different to the traditional producer opens UK export office model of old.
The new model, trialled and innovated by businesses such as Alliance is lean, flexible, expert and able to add value at every turn. As the market becomes increasingly open due to the consolidations and sell-offs in the majors, further opportunities will arise and this model will become the establishment.
So what does this mean for the large numbers of mid priced, honest wine produced throughout Australia? Well, should they wish to export to the UK (and this should no longer be a default position)they need to find creative, innovative distributors willing to work closely on co-branding and lean business models. Only by doing this will we maintain Australia in the forefront of the consumer's mind and be in a position to re-build brand equity and long term sustainability.
Wine Australia's A+ policy goes a long way to putting the emphasis on quality, individuality and aspiration ( and though temporariliy challenging the withdrawal of funding by the majors might be just what the initiative needs) but it cannot single-handedly reverse the impact we will all feel this year as a result of the currency shift.
For all that we will need to get leaner, better, more creative and inspiring for the long term sustainability of the category, one cannot help but feel for those producers that have stood side by side with the UK trade for the last two decades and surely we all owe it to ourselves to now stand up and sell those wines more effectively and with more passion than ever before. If we all do this then perhaps we'll enter 2012 with Australia having overcome what is surely its most difficult hurdle yet.
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