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Australian Wine Imports Still Sliding In U.S., But Value-Per-Liter Is Finally On The Rise

March 11, 2014

Australian wine import volume in the U.S. fell by 11% last year to 174 million liters, and total value was down 2.4% to A$440 million ($393.4m). But the average per-liter import price of Australian wine showed an increase for the first time since 2007, up 9% to A$2.53 ($2.26), according to trade group Wine Australia.

Trading-up trends may finally be creating opportunities for Australia, which remains the U.S. market’s second-biggest import category behind Italy. “We’re seeing growth in regional labels, and those usually retail at $15 and above,” says Angela Slade, North American regional director at Wine Australia.

Total value of bottled Australian wine showed a 2% gain to A$384 million ($343m). On a per-liter basis, average value for bottled imports rose 3% to A$3.37 ($3.01). Volume of Australian bulk wine imports, meanwhile, decreased 24%, while the per-liter average price for bulk was flat at A$0.94 ($0.84).

Double-digit growth from the premium and super-premium tiers fueled the per-liter value growth. Australian wines retailing at $7.50-$9.99 grew 31% in the U.S. last year to 2.6 million liters and offerings retailing at more than $10 a liter rose 11% to 1.5 million liters (those two segments still represent a small fraction of the category). Australian bottled imports last year increased share versus bulk wines in the U.S. to 66%, from 59% in the previous year.

“Declines are consistently at the lower price points,” says Slade. “We’re developing the idea of premium regional discovery. Millennials are seeking wines that tell a story, and our target audience is that millennial.”

Shiraz, Cabernet Sauvignon, Chardonnay and red blends like Shiraz-Cabernet contributed significantly to growth. “Cabernet is seeing a lift in the $11-$15 price point, but Chardonnay has had a little increase across all of the premium tiers,” Slade observes. “Pinot Noir also has been inching up. There’s a real following for cult, boutique Australian Pinot Noir, a lot of which is coming from Victoria.”

Currency pressure has eased as the Australian dollar decreased in value against the U.S. dollar about 15% from $1.05 in April 2013 to $0.89 by the end of last year and is continuing to trade at about that level. “No one is clicking their heels, but it has created a little bit of breathing room,” says Slade. “The situation is helping importers with their margins. If it can stay under $0.90, it’s a real help.”

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