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Australian Wine Awakens With New Upscale Focus

March 27, 2018

Australian wine has been making strides toward reinventing itself in recent years, with its eye on a new generation of U.S. consumers increasingly inclined to reach for bottles retailing above $15 a 750-ml. While Australian shipments to the United States declined by 5.5% in 2017 to 10.2 million 9-liter cases (excluding bulk), opportunities are presenting themselves at the premium end. Large-selling value brands like Yellow Tail, Lindemans, and Fish Eye have been struggling to make headway, but super-premium Australian brands like 19 Crimes from Treasury Wine Estates have been on the rise. According to Impact Databank, 19 Crimes ($12-$25 a 750-ml.) more than doubled to above 1 million cases in 2017, expanding roughly tenfold over the past three years.

“Consumers are looking for authenticity and brands they can trust to deliver a great experience,” says Michelle Terry, chief marketing officer for the Americas at Treasury Wine Estates. “19 Crimes is a great example of how storytelling is resonating with both millennials and a wider set of wine drinkers alike.” Among the brand’s marketing initiatives is an augmented reality app that tells the tales of the three 18th-century convicts-turned-colonists that adorn 19 Crimes’ bottles.

“Australian wine took a big hit after the financial crisis, and it’s been rebuilding slowly over the past 10 years,” says Aaron Ridgway, head of marketing for the Americas for trade group Wine Australia. “The perception of Australia as a solid purveyor of cheap and cheerful wines is definitely contracting, and the numbers are starting to show that.” While overall U.S. shipments were down last year, slipping 2% to $357 million, higher-end Australian wines continued to show solid momentum stateside, with offerings priced at $14 a bottle or higher rising 8% to $36 million, according to Wine Australia.

To spark renewed interest in the country’s fine wines, the Australian government has committed $38 million over the next three years in the key export markets of the U.S. and China. At the category’s peak in 2007, there were about 400 Australian wineries selling in the United States. After a sharp decline, the number of wineries rose to about 251 in 2017—up from 234 the year prior. “We’re working to create awareness and grow the appetite for Australian wine, which provides the route to market for companies that either were here and want to return, or see this as a good time to export,” Ridgway says. Market Watch has a full report on what the future holds for the Australian wine category in the U.S.

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