Archive | April, 2015

Australian wine lacks regional identity

27 Apr

Recently I was asked to answer the question “How important is regional identity in the Australian wine industry?.”  The quick answer is “not very darn important.”  A somewhat longer answer is below.

Irvine's Gold Medal Australian Burgundy.  Not from Burgundy.

Irvine’s Gold Medal Australian Burgundy. Not from Burgundy.

While sommeliers & WSET students may debate the difference between Clare Valley & Eden Valley Rieslings, in general regional identity has not been particularly important to the Australian wine industry.  I believe that there is currently an effort to change that, although it is uncertain yet whether it will succeed.

The history of Australia up until recently does not show an interest in regional identity as a marketing tool, & little evidence of it as a wine making tool.  Instead Australian wineries have focused on varietal expression & clever marketing.

Australia is known more as an exporter of wine than a drinker of wine.  Australia ranks around #6 in wine production, but around #19 in per capita consumption (40% of what is produced).  While personal consumption has been a factor all along, export of wine to England was a driver in the growth of the Australian wine industry.  Due to the length of the journey from Australia to England, it became common to fortify the wines.  This meant that quantity rather than varietal characteristic or base wine quality became the most important factor for growers & producers. Despite the 1870’s devastation of the local industry by Phylloxera, by the 1920’s-1930’s Australia actually sold more wine to England than France did (due in part to favorable import duties).  At its height, fortified wine was about 70% of total wine production in Australia.  It has now fallen to around 2%.

If region was a marketing factor in most of Australia’s wine history, it was someone else’s region.  Many of the fortified wines were sold as “Australian Port.”  Many wineries, including Penfolds sold wine under an Australian Burgundy label despite the wines not being from Burgundy & not including one grape of Pinot Noir.  Penfolds actually included Hunter Valley on the label while still calling the wine Burgundy, which is a step towards actual regional identification I guess, but a very small one.

Penfold's Australian "Burgundy"

Penfold’s Australian “Burgundy”

My favorite of those labels is probably Emu Brand, which features an emu on it; not something you would expect to see on real Burgundy. Great Western wine, also called Irvine’s Great Western Wine started in the 1880’s as primarily a “Champagne” house & produced “Champagne” & “Burgundy” for years in Australia.

Emu Brand Burgundy

Emu Brand Burgundy

 

As market conditions changed, it became impossible to use another region’s name if you wanted to sell your wine in Europe.  That meant that marketing for Australian wines had to change.  Varietal labeling has become the most popular way to label wines in the New World including Australia.  That has fit well with Australia’s winemaking focus on technique & varietal expression over terroir.  Another marketing response to the European Union requirements has been to designate most of the wine growing regions in Australia as one large region called the South Eastern Australia Zone, which covers much of the states of Queensland, Victoria, New South Wales and South Australia. Nearly 95% of all Australian vineyards fall in the South Eastern Australia Zone and can be blended together even if the vineyards are hundreds of miles apart.   The EU requires that varietally labeled wine be labeled with an officially recognized region.

While wine production began in Australia almost as soon as the first settlers arrived from England, the history of great wine in Australia probably begins with Max Schubert & Penfolds Grange (originally Penfolds Grange Hermitage in yet another misappropriation of a region’s name).  When Schubert set out to create a wine that could go toe to toe with the best Bordeaux he chose Shiraz as his grape.  Specifically he chose the best Shiraz he could find from 2 or 3 vineyards.  Penfolds has followed this strategy over the years by picking the best fruit from the vineyards that they feel will produce the best wine for that year.  They seldom use the exact same mix of vineyards two years in a row.  The eventual success of Grange demonstrated two things to the Australians, first that they could make world class wine, & second that they could produce quality wine to a formula rather than waiting for Cistercian monks to demarcate the best spots for grapes over generations.

The big wine companies took this idea & ran with it.  Big brands like Hardy’s, Lindeman’s , & later [Yellowtail] took advantage of their technological prowess, mechanization, & low production costs compared to many regions, to produce technically solid varietal wines at lower prices than much of the competition.  The Australian industry worked well together as the Winemaker’s Federation of Australia to promote Australian wines.  In 1996 they produced an ambitious plan dubbed Strategy 2025.  Its goal was to see Australian wine be the leading wine imported into the United States by 2025.  They actually achieved that milestone in 2005!

Strategy 2025 was almost too successful.  It led to overproduction of cheap wine & caused the Australian industry to go through a huge boom & bust period that involved the sale or bankruptcy of major wineries & the pulling up of vines.  That said, it was still an amazing success & it was predicated on Australian wine as a whole.  It established in the consumer’s mind that Australia produced delicious oaked Chardonnay’s, & powerful Shiraz & Cabernet Sauvignons (or blends of those two).  Some additional varietals like Grenache/Syrah/Mouvedre blends, Merlot, or Riesling, or Sauvignon Blanc managed to come along for the ride, but those were the forefront.  They were not tied to region.  Barossa Valley became known for Shiraz, but only to those who paid attention.  To the vast majority of buyers, Australian wine was (& is) good, cheap, & often had a cute animal on the label.

The truth is that there was always a plan to differentiate by region.  The original plan called for “Brand Champions” to be wines of broad appeal to the market base, they were followed by Generation Next” wines designed to appeal to new drinkers with marketing & packaging to attract the newest generation of wine drinkers.  These were to be followed by “Regional Heroes” & “Landmark Australia” which would focus on regional diversity & aspirational drinkers respectively.  Unfortunately these last two categories got somewhat lost in the crush of critter wines.  Now the marketing group is trying to reintroduce Australia to the wine world, but it is hard to change the image of Australia that the cheap wines have set.  The saying is that you never get a second chance to make a first impression & Australia is discovering that to be true.

Wine growers in Australia are learning more & more about the terroir of different regions.  They are producing some exquisite single vineyard wines that are an expression of regional identity.  Unfortunately right now, they are in the minority & the identity on Australian wine is still defined by Lindeman’s Bin 65 & [Yellowtail] blends across a broad region rather than any regional identity.

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