Exclusive news and research on the wine, spirits and beer business

After Parting With Gallo, Australia’s McWilliam’s Shifts Upmarket In U.S.

July 24, 2015

Long a part of the E.&J. Gallo import portfolio, Australian winemaker McWilliam’s has taken a new direction in the U.S. market this year, switching importers and launching two higher-priced wine ranges and a millennial-targeted red blend, with more premium offerings on the way.

“The fastest-growing price segment in the U.S. is $10-$20,” notes Mark Hely, McWilliam’s director of international markets. “We’ve traditionally sat at around $10 in the U.S. and Australia, and we’re looking to move up to the $15-$30 range. The number-one complaint I hear from retailers is that the Australian category is great at bringing in entry-level consumers, but when they want to trade up, there’s nothing on the shelf for them.”

According to Impact Databank, McWilliam’s hit a peak of 265,000 cases in the U.S. in 2007 before declining in the ensuing years. The company’s new plan calls for about 20% growth annually over the next three to four years, which would bring its U.S. volume to above 300,000 cases.

McWilliam’s new wines include a Cool Climate series ($15) and an Appellation series ($25) from the Hilltops and Tumbarumba areas, with varietals including a Cabernet Sauvignon, Shiraz and Chardonnay. Additionally, the portfolio has been extended with a $15 red blend, Wildling, designed specifically for the U.S. millennial audience. All are imported by South Carolina’s Total Beverage Solution. McWilliam’s also plans to bring its Evans & Tate brand from Australia’s Margaret River region to the U.S., Hely says, but those wines will be sold through a different U.S. agent.

McWilliam’s is still partnered with Gallo in Asia, Canada and other global markets, but in the U.S. the companies’ interests have diverged lately. “If you look at Gallo from the outside in,” Hely says, “you see a very strong wine portfolio, but also what’s becoming a very strong spirits portfolio with New Amsterdam vodka and gin. They have a big focus on that.”

While McWilliam’s and others look to move Australia upscale, the category’s challenges continued over the 12 months through June, according to Wine Australia. U.S.-bound Australian wine shipments fell 8% to A$415 million ($308m) during the period, with bottled exports showing “declines at all price points,” the trade group said.


Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.

Tagged : , , , ,

Get your first look at 2020 data and 2021 projections for the wine and spirits industries. Order your 2021 Impact Databank Reports. Click here.

Previous :  Next :