Australian wine company review
Regional roundup: Tasmania
Yalumba focuses on sustainability
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April 2013: Issue 591
Australia's top 20 wine companies
Cullen Wines experiments with ovum barrel
New Zealand's top 5 wine companies
Ask the AWRI: Brett, Part 2
Training and trellising
White wine phenolics − friend or foe?
Bottling and labelling
Pioneering wine family is quiet achiever
IT and website design
Wine scientist to explore 'cold soak'
Vine to bottle: sustainability at Yalumba
Winemaker in Profile: Peter Dredge
sales & marketing
My View: Richard Smart
Coles tells small wineries to 'work with us'
Industry stalwart leaves lasting contribution
US on-premise wine choices
McLaren Vale tackles climate change
Label Q&A: St Leonards
Conference delegates get taste of future
Wine label redesigns: what to consider
New Zealand vintage wrap
Small wineries favour digital printing
Regional Roundup: Tasmania
Top 20 Australian wine companies
Top 5 New Zealand wine companies
business & technology
Australians explore Vinitech
Comparing vineyard management styles
Best vineyard sites essential for quality
Managing yield and ripeness with trellising
South Africa − adapt and innovate
Appointments and accolades
Wine Aust offers partnership opportunities
Luxury wines enjoy growth in Asia
wrdc GRAPE AND WINE RESEARCH AND DEVELOPMENT CORPORATION
8 APRIL 2013
Australian wine company review
Regional Roundup: Tasmania
Yalumba focuses on sustainability
The top 20 Australian wine companies review along with the top 5 NZ is our cover feature this month.
5 on the grapevine 49 grapegrowing 62 winemaking 88 export snapshot 89 looking forward 90 marketplace classifieds
In this issue April Publisher and Chief Executive Hartley Higgins Managing EDITOR Elizabeth Bouzoudis EDITOR Grahame Whyte email@example.com Editorial advisory board Dr Jim Fortune, Denis Gastin, Dr Steve Goodman, Prof. Jim Hardie, Dr Terry Lee, Paul van der Lee, Bob Campbell MW, Prof Dennis Taylor and Mary Retallack Editorial Kellie Arbuckle Contributors Ed Merrison, Danielle Costley, Steve Goodman and Peter Bailey Advertising Sales Chas Barter firstname.lastname@example.org
April is a busy time of year in wineries around the country, so we hope you will take time out to read this special issue. Australia and New Zealand boast a huge number of wineries – more than 3000 altogether – but at the big end of town the numbers are much smaller. The Top 20 wine companies in Australia and the Top 5 in New Zealand account for the lion’s share of production, so this month we put them under the spotlight and see how they are faring in a rapidly changing environment. In so many ways, they are the leaders of our industry. Their top labels – for example, Penfolds – are widely recognised and highly valued around the world. And the prestige of these flagship products undoubtedly assists smaller wineries when they are engaged in the daunting task of breaking into new export markets. Intriguingly, Australia boasts some of the largest dedicated wine companies in the world. These companies have generated
significant export revenue and made a lasting contribution to the Australian wine sector. You will realise as you read through the wonderful insights into these companies that their approach to styles and marketing can be very different. Each company pursues a strategy deemed best for its core markets, while aiming to lift both profile and sales. Thanks to our dedicated business journalist, Ed Merrison, for his fine efforts in encouraging the key people in the Top 20 to share their thoughts with us. And thanks also to the many people who have helped to gather the information needed to compile the Top 20. I trust you will enjoy this annual feature. Grahame Whyte Editor Australian & New Zealand Grapegrower & Winemaker email@example.com
Circulation: Melissa Smithen firstname.lastname@example.org Subscription Prices Australia: 1 year (12 issues) $77.50 (inc. GST) 2 years (24 issues) $145 (inc. GST) New Zealand, Asia & Pacific: 1 year (12 issues) $110 (AUD) 2 years (24 issues) $210 (AUD) All other countries: 1 year (12 issues) $174.50 (AUD) 2 years (24 issues) $339 (AUD) Students (Aus only): 1 year (12 issues) $66 (inc. GST) Winetitles Pty. Ltd. 630 Regency Road, Broadview, South Australia 5083 PO Box 1006, Prospect East South Australia 5082 Phone: (08) 8369 9500 Fax (08) 8369 9501 email@example.com www.winebiz.com.au Printing by Lane Print Group, Adelaide © Contents copyright Winetitles Pty Ltd 2013.
All Rights Reserved. Print Post Approved PP535806/0019 Articles published in this issue of Grapegrower & Winemaker may also appear in full or as extracts on our website. Cover price $8.25 (inc. GST)
4 Grapegrower & Winemaker
Contributors Danielle Costley worked as a journalist throughout the Australasian region for more than 15 years. After working as a TV writer and business journalist on the east coast, Danielle was lured to the Margaret River wine region in 2000, where she began her career as a wine journalist. This month, on page 62, Danielle investigates the way wine is made in the new egg-shaped fermenters at Cullen Wines. Ed Merrison is a British journalist specialising in travel, arts, culture and business, Ed read Modern Languages at Oxford University and has lived in Ireland, Spain and Argentina. He recently returned to Melbourne following a six-year absence, during which time he served as travel contributor for the Herald Sun and multimedia producer at Sky News and Bloomberg in London. Our annual Top 20 Australian Wine Companies review has been written by Ed this year – see page 18 for a great read. Steve Goodman is senior lecturer in marketing at the University of Adelaide. He is supervising a number of honours and PhD students in wine-related topics of tourism, cellar door servicescape, organic consumption, social media and management strategy. Steve also sits on the Grapegrower & Winemaker editorial advisory panel. On page 75, Goodman continues a series of papers on results of research that examines ‘decision influencers’ along the wine supply chain. www.winebiz.com.au
April 2013 – Issue 591
on the grapevine
Gatt Wines claims world’s best wine Gatt Old Vine Shiraz has emerged triumphant as the best wine in the world. The Barossa Valley Shiraz has been proclaimed number one in the World Ranking Wines and Spirits (WRW) 2013. Conferred by the World Association Wine and Spirits Writers and Journalists (WAWWJ), the prestigious accolade is a coup for the premier release of 2010 Gatt Old Vine Shiraz. The stellar wine achieved the number one ranking with a record of outstanding performances in international competitions where the wines were tasted blind. Gatt Wines winemaker David Norman was overjoyed to win number one wine in the world. “It’s fantastic that last year we won trophies internationally for all three of our primary grape varieties: our Shiraz, Cabernet Sauvignon and Riesling. They are truly the heart and soul of our vineyards in the Barossa and Eden Valleys,” Norman said.
Riedel to create speciality glass for Central Otago Pinot Noir The head of the world’s leading wine glass company has consulted with Central Otago winemakers and wine experts about producing a speciality wine glass for the region’s Pinot Noir. Austrian Riedel Glass Company chief executive Georg J Riedel toured the Central Otago wine region to gain a better appreciation of the region’s famed Pinot Noir before embarking on an intense tasting session to “find the perfect glass in which to enjoy Central Otago Pinot Noir”. Riedel led the interactive session with a select number of about 20 wine experts and local winemakers who each sampled their own vineyard’s wine in 14 different types of Riedel glasses. He said using the right glass was “crucial” when enhancing the art of drinking wine and encouraged guests to “forget about the look of the glass” and “feel the emotion of the wine”. Riedel Glass Company chairman Each guest was asked to rate the glasses and Georg Riedel. award points to those they thought best reflected the way their wine should taste, before scores were collated and two glasses emerged as clear winners. Riedel said: “The perfect Pinot Noir glass has a rounded, bulbous bottom and a thin pointed flow at the top. The glass controls the flow of wine to the palate in a spectacular way so the wine doesn’t become better, it tastes better.” The Riedel Central Otago Pinot Noir glass is planned for release by Hancocks Wine and Spirit Merchants in 2014.
GWRDC chair re-appointed for second term Hon Rory McEwan has been reappointed chair of the Grape and Wine Research and Development Corporation for another three years or until the merger of GWRDC and Wine Australia. “I am honoured to be re-appointed to this position and I look forward to working productively with the GWRDC Board as we continue to make strategic investment decisions that support a competitive Australian wine sector,” McEwan said. McEwen served as Cabinet Minister for six years and held a number of portfolios, including Minister for Agriculture, Food (including wine), Fisheries and Forestry for five years. He also chaired the South Australian Wine Industry Council and travelled in Asia and North and South America promoting Australian wine. GWRDC executive director Dr Stuart Thomson said: “Rory’s reappointment provides welcome stability and continuity as we move into a period of preparation and change associated with the proposed merger.” McEwen’s appointment was made by the Minister for Agriculture, Fisheries and Forestry the Hon Joe Ludwig under the Primary Industries and Energy Research and Development Act 1989.
April 2013 – Issue 591
Drinks industry split as duty escalator cut on beer but not wine and spirits (UK) While the beer industry celebrates the “brilliant news” that the Chancellor is to scrap the duty escalator on beer, the wine and spirits sector is faced with further increases under the controversial measure with wine duty now up to £2. In a much trailed announcement, Chancellor George Osborne has looked to play to the popular press, the average beer drinker and strong trade lobbying by cutting beer duty by 1p, reports Harpers Wine & Spirit.
‘NZ Wine Producer of the Year 2013’ trophy in China (NZ) Babich Wines has continued its run of impressive international accolades by winning the trophy for ‘New Zealand Wine Producer of the Year 2013’ at the China Wine and Spirits Awards Best Value 2013 held in Hong Kong earlier last month. The Babich Marlborough Sauvignon Blanc 2012 and Babich The Patriarch 2010 both won a double gold medal. These medals, along with a silver medal for the Babich Black Label Sauvignon Blanc 2012 helped clinch the ‘New Zealand Wine Producer of the Year 2013’ trophy, reports Scoop.
Don’t supply bulk wine to Coles and Woolworths: Treasury Wine Estates’ David Dearie says Small wine producers worried about competing with Coles and Woolworths should stop selling to the supermarket giants, says David Dearie, the chief executive of the world’s largest publicly listed, pure-play wine producer, Treasury Wine Estates. “Private label wine exists only because wine companies sell their wine in bulk to retailers and let the retailers put their labels on it,” Dearie told BRW. “You’ve got to look at who is causing the problem. If you’re a wine company and you’ve decided to make excess wine and sell to the retailers, you can’t then complain.”
.com.au Australia’s wine industry portal by Winetitles Australia’s wine industry portal by
Daily Wine News is a snapshot of wine business, research and marketing content gleaned from international wine media sources, with a focus on Australian news and content. To subscribe visit www.winebiz.com.au/dwn. Grapegrower & Winemaker
Australian wine sector – drowning in bulk wine? Dr Richard Smart
Introduction The Australian Wine Export Market Snapshot in the back pages of this month’s Grapegrower & Winemaker magazine is depressing reading. Australian wine exports peaked in 2007; the proportion of exported bottled wine, steadily decreased from around 72 % in 2007 to 46% in 2012. The average value is $2.58/L exported, with 57% of wine sold at $2.49 /L or under, which proportion is increasing. Seventy per cent of export wine is labelled as “South Eastern Australia”, followed by “South Australia” at 12%. The two leading regional labels were Barossa (2.4%) and McLaren Vale (2.0%). So much for the purported movement towards regional marketing. A recent survey by International Wine and Spirit Research, commissioned by Vinexpo indicated Australian production will decline 15% over five years.
The present scenario The Australian wine sector is shrinking, and is becoming increasingly a bulk wine producer, reinforcing a regrettable image. The bulk wine market will increasingly come under pressure from low labour cost countries like Argentina, Chile and South America, and maybe in the future China? The question that must be addressed is whether the Australian wine sector will remain internationally competitive by growing a few presently popular grape varieties out of place in hot regions, where wine quality is compromised. The alternative view of the Australian wine sector is founded on an international reputation for regionally distinct and fine wine production. Wine Australia’s Directions to 2025 (page 4) seems to be lacking momentum. Will it ever eventuate? I am not alone in my view about the problems of the Australian wine sector. Professor Geoff Lewis and Dr Tatiana Zalan presented to the American Association of Wine Economists Annual Conference, University of California, Davis, June 2010 the paper The Australian Wine Industry: An unsustainable boom and the inevitable bust S (aic.ucdavis. edu/aaweconf/abstracts/Lewis_Zalan. pdf).
6 Grapegrower & Winemaker
They discuss the impact of Strategy 2025, the success of Stage 1 Volume Growth (1996-2002), the failure of Stage 2 Value Growth (2002-2015) and of Stage 3 Pre-eminence due to brand leadership in specific markets (2015-2025). It could be argued that this latter stage is now being achieved, but with wines at the bottom value of the market. They conclude: “Reducing the volume of commodity wine will do nothing to enhance the economic sustainability of the Australian wine industry. The restructuring required must be more strategic and aimed at the firm, rather than industry level. It must address the issue of what must be done by the individual producers to position themselves to open up a wedge of competitive ability.”
Will strategic planning help? The Australian wine sector has no relevant and contemporary strategy for the future. The closest is to find Strategy 2025 and Directions to Strategy 2025 and the WRAA, listed on the WFA website. I believe the Australian wine sector needs to develop a new strategy. It would be properly convened by the sector organisations, but they should not dominate. There is also a need for new faces. Perhaps it should convene outside Adelaide.
A few suggestions Develop a seven-year strategy, Strategy 2020. Turnaround needs to occur before that date, otherwise New Zealand will earn more from wine exports than Australia. The strategy needs to be ‘two speed’, to serve the important wine production in hot regions, as well as fine wine production. Most would agree that the former might shrink, and the latter hopefully grow, to increase Australia’s wine export earnings. Develop a strategy to encourage growth of a regionally based, varietally distinct ‘New Australian Wine’, allowing distinctive marketing. These will be mostly in the fine wine sector, achieving higher value. Develop a strategy to facilitate production moves to cooler climate zones. www.winebiz.com.au
New Zealand outperforms Australia in value per litre of wine exports, due to its cool climate style. Over 97% of Australia’s vineyards are planted in areas hotter than New Zealand’s, most very much hotter. Develop a strategy to ‘resuscitate’ Australia’s present hot regions. This will involve encouragement of alternative varieties and development of genuine regional wine styles – not just production of bulk wine from varieties grown out of place. There should also be efforts to breed new varieties to cope with forecast hotter conditions.
Conclusion All is not lost for the Australian wine sector, but there is a need for some serious strategic planning and action to save the day for the majority of regional, fine wine producers. It is these producers who might restore Australia’s pride as a wine exporting nation. This viewpoint might not enjoy widespread support, but does warrant a resonse.
Dr Richard Smart of Smart Viticulture is an international viticultural consultant, based in the UK. Most recently he has been living in Tasmania, and involved in that state’s ambitions to enlarge wine production. He has consulted in over 35 countries, and is a regular columnist to trade journals in Australia and the USA. Contact firstname.lastname@example.org April 2013 – Issue 591
Coles tells small wineries to ‘work with us’
Printed Wine Tasters
“TRUST US, WORK with us and we will go out of our way for you.” That’s the message Coles Liquor general manager Tony Leon has for Australian wine producers, both large and small. Leon made the comment at the National Wine Centre last month at the launch of Coles’ new grower relationship booklet, Backing Aussie wine. Officially launched by Winemaker’s Federation of Australia president Tony D’Aloisio, the booklet features stories of how 14 wineries are expanding and investing in their business on the back of a long-term relationship with Coles. Leon said he hopes the booklet will encourage smaller wine producers to do the same. “We want to let small producers understand that we are reasonable fellows and we want them to learn how to deal with us,” Leon said. Wineries featured in the booklet are: Bay of Fires, Brown Brothers, Chapel Hill, De Bortoli, Devil’s Lair, Fabric Wines, Grant Burge, Littore, McWilliam’s Wines, Peter Lehmann, Project Wine, Rosabrook, Tyrrell’s Wines and Zilzie Wines. In presenting the booklet, D’Aloisio congratulated Coles for its support to the Australian wine industry. “Of the off-premise market of Australian wine, 75-80 per cent is the two major groups, so on any stretch they are an important customer to our wine industry,” he said. “Initiatives such as this that really promote Australian wine and push the supplier relationship are extremely important − and we support it.” He said it was “heartening” to see Coles focus on relationships, as distinct from short-term transactions. He also praised Coles’ emphasis on supporting Australian wine and offering flexible business models – proprietary, exclusive and private labels – for wineries. Rosabrook Wines owner Mike Calneggia travelled from Western Australia to attend the launch. Calneggia has been supplying his Rosabrook Wines exclusively to Coles for the past four years. The winery is based in Margaret River and has about 170 hectares of vineyards that it owns, manages, leases or contracts. Calneggia cited the ability to sell wine direct to market and payment security as April 2013 – Issue 591
WFA president Tony D’Aloisio (left) and Coles Liquor general manager Tony Leon at the launch of the Coles grower relationship booklet.
major benefits of working with Coles. “The key benefit is security of payment. The second benefit is that there is an opportunity for smaller producers to become direct suppliers to Coles,” he said. “If we were selling Rosabrook via the traditional distribution model, we would not have the direct interaction with the Coles team and possibly our message wouldn’t be as easily transmitted.” But Wine Grape Growers Australia executive director Lawrie Stanford said that when growers sell directly to major retailers it undermines the growerwinemaker relationship. “Increasingly growers are selling direct to major retailers. From our point of view, this should be seen as a wakeup call to winemakers,” Stanford said. “Growers who are not getting equivalent prices from winemakers are choosing to convert their grapes to wine using contractors and they then sell that wine to the retailer. This means more buyer own brands which undermines private brand equity.” Both Leon and Calneggia rejected claims that Coles was hurting small wineries and the industry. “We’re not trying to squeeze out suppliers but we do need to deliver good value wine to our customers. Customers today are not the same as they were 20 years ago. They want good value every day and it’s our job to deliver it,” Leon said. “It’s not just the greater share of market power by two big players; it’s a fundamental change of history. Grapegrowers and winemakers have to accept it as its happening in other industries around the country,” Calneggia said. Reader question: What is your experience with the major retailers? Email your story to email@example.com www.winebiz.com.au
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Industry stalwart leaves a longlasting contribution from his dedicated work Kellie Arbuckle
A MAN WHO was no slave of fashion, whose passion for sherry and interest in wine was not limited by academia. This is how Steve Guy, of Wine Australia, will remember Bryce Rankine, one of Australia’s most respected wine scientists, who died last month, aged 87. Born in Murray Bridge in 1925, Rankine became widely known in the wine industry for his research and developments on the determination of sulphur dioxide in wine. After graduating with a science degree at the University of Adelaide, Rankine worked as a research officer at the CSIRO’s Oenological Investigations Section which, in 1957, became the Australian Wine Research Institute. Here, Rankine and his colleagues designed the new laboratories. He spent the next 21 years there, mainly as officer
Bryce Rankine sharing his expertise at Sapporo Wines, Japan, in 1984.
Bryce Rankine at a wine tasting.
8 Grapegrower & Winemaker
in charge of the technical services department, which he and his colleagues set up to provide a service to the wine industry. In 1952, aged 53, Rankine moved to Roseworthy Agricultural College where he worked as head of the School of Oenology and Viticulture and later as dean of Oenology. Guy, Wine Australia’s general manager, regulatory advice, was among Rankine’s students at the time. “I remember Bryce from his years teaching at Roseworthy when I was a student in 1981-1984,” Guy said. “He impressed me at that time by his obvious interest in all aspects of wine. He was also instrumental in building Australia’s reputation for technical excellence in wine production, but I would not describe him as a technocrat.” After his retirement at the end of 1986, he helped Len Evans and Brian Croser of the Australian Wine Foundation to establish the Australian Society of Wine Education, where he served as its executive director until retiring again in 1995.
Dr Patrick Iland, director of Patrick Iland Wine Promotions, said Rankine was a great communicator on the scientific principles of winemaking. “In the days before the internet, Bryce was one of the main sources of communication between researchers and the wine industry through technical articles in the Grapegrower & Winemaker magazine,” said Dr Iland, former lecturer at Roseworthy Agricultural College. “His communication of technical information was one of his main attributes and skills.” Rankine was also a prolific author; he wrote the popular Making good wine, The evolution of the modern Australian wine industry and Cooperage for winemakers, to name a few. He was also a companion of Barons of the Barossa, Member of the Order of Australia, and recipient of the Maurice O’Shea Award. Rankine is survived by his two daughters, Jenny and Anne, and his son, Andrew.
April 2013 – Issue 591
NATIONAL CONFERENCE & EXHIBITION Tastes for the Future For further information visit www.wea.org.au or contact Trevor Leighton 0417 597 956 firstname.lastname@example.org
SERAFINO WINERY, McLAREN VALE | JUNE 5th & 6th 2013
McLaren Vale producers take proactive approach to climate change Winegrowers in McLaren Vale are embracing recycled water, new varieties and sustainable practices in an effort to future-proof their vineyards in the face of a changing climate. Kellie Arbuckle
MCLAREN VALE WINE producers are ahead of the game in preparing for the challenges of climate variation, new research suggests. A study has compared two Mediterranean wine regions – McLaren Vale in South Australia and Roussillon in France – looking at each region’s ability to adapt to climate change at a social, ecological, agricultural and economic level. Conducted by researchers at the University of Adelaide and Université Paris Diderot, the study found McLaren Vale producers were more likely to be resilient to unfavourable climate variations thanks to their proactive approach in adjusting viticulture systems. “By 2060 we expect to see decreases in rainfall by about 30% and increases in temperatures up to two degrees Celsius, which will place additional water stress on grapevines and berries. This in turn will impact on the quality and quantity of wine produced,” said study co-author Dr Douglas Bardsley, senior lecturer in Geography, Environment and Population at the University of Adelaide. “By working in cooperation to secure their water and land resources, and experimenting with new approaches to make their distinctive wines, producers in McLaren Vale have established a resilient system that will help them to adapt.” One significant innovation, he said, was the Reclaimed Water Scheme, which allows small and medium sized irrigators to use recycled water on their vines instead of grounds or mains water. Study co-author and French researcher Anne-Laure Lereboullet said the scheme allowed for a cheaper and environmentally friendly alternative. “People chose recycled water not because of climate change directly but because bore water is too salty and mains water is too expensive,” Lereboullet said. Today 60% of vineyards in McLaren Vale are irrigated with recycled water, largely thanks to the state government’s 50% rebate to connect to the scheme from 2008-2012. Bardsley said the state government’s support to protect the region from urban sprawl was another coup for
10 Grapegrower & Winemaker
Sixty per cent of vineyards in McLaren Vale are surface irrigated with recycled water. Photo courtesy Dr Douglas Bardsley.
the wine region’s sustainability efforts, in addition to producers’ experimentation with viticultural practices. “The land resource is being secured by working with the South Australian Government to implement the SA Character Preservation Bill (McLaren Vale) 2012, which aims to prioritise rural land uses in the region,” he said. “The Bill is still controversial and it is not clear how effective it will be, but it is the type of planning we need to protect key agricultural regions in Australia.” He said the growth of biodynamic and organic viticulture could also be a step forward in adapting to changing climate. “Changing winegrape varieties to suit not only the market but also the climate – and mulching – have also reduced local vulnerability to climate change.” Lereboullet and Bardsley embarked on the research together with the www.winebiz.com.au
aim of making a comparison of the Mediterranean climate winegrowing region of Roussillon in southern France with a similar region in the New World. “The climates of McLaren vale and Roussillon are surprising similar, and the main grape variety is Shiraz in both places. The fact that Mediterranean viticulture is less studied than other regions, such as Bordeaux, that this type of viticulture is particularly at risk from climate change, and that it’s a comparative approach between Old and New World offers a unique perspective,” Lereboullet said. Lereboullet and Bardsley based their research on statistics from national statistical publications, and data from national meteorological organisations and national climate models, as well as interviews with wine producers in McLaren Vale and Roussillon over a twoyear period. April 2013 – Issue 591
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WEA conference delegates looking to sample a taste of future technology Kellie Arbuckle
WHAT WINEMAKING TECHNOLOGY is available to winemakers wanting to produce quality low-alcohol wine or small batches of alternative varieties? These two questions will be addressed at the 2013 Winery Engineering Conference. More than 30 exhibitors are expected to present at this year’s conference from 5-6 June at Serafino Winery, in McLaren Vale. The event will be themed ‘Tastes of the future’, a move signalling a change from previous conferences. “This year we’re trying to address one segment. We’re going to look at the future trends of the wine industry and the products consumers are going to want,” WEA executive officer Trevor Leighton said. “We’re seeing a number of new varieties come onto the market and the challenge for wineries is how you handle smaller lots, because that’s what they’re doing. The other topic is low-alcohol wines, which produce technical challenges in the winery. This conference will focus on the production methods and influences associated with processing these wines.” This year’s conference format has also been changed to single sessions over two
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days rather than parallel sessions. In addition to the exhibition, a number of papers from the Australian Wine Research Institute will be presented. These include research into lowalcohol wine production, and the causes of protein instabilities and efficient ways of managing them. There will also be presentations from exhibitors on topics including the production of low-alcohol wine using spinning-cone technology, and developments into alternative oak wine barrel maturation. Leighton said the conference will provide winemakers and production staff with a vital opportunity to discover the latest technology and research into low alcohol wines and alternative varieties. “One of our main objectives is to keep the wine industry up to speed with new developments in technology that are going on around the world in
winemaking and processing,” he said. Pellenc Australia managing director Louise Fraser said the event is a great networking opportunity. “We attended the WEA in 2012 for the first time in many years and found it put us in touch with more people on the winery side of things,” she said. “As we move more into this area, with our Selectiv’ Process winery machine and our new Extractiv’ dynamic crusher, the WEA assists us in building our profile in the winemaking community. “We have received a lot of interest in the new crusher, which was only launched at Vinitech in December 2012.” The conference will also cover recent technology advancements as well as updates on sustainability and operational efficiency. There will also be a workshop on the day prior to the conference which will cover winery wastewater treatment, including site visits to a number of wineries in McLaren Vale. Look out for GW’s detailed preview of the conference in the May issue. For more information visit www.wea.org.au or email WEA conference coordinator David Clark: firstname.lastname@example.org
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vintage wrap: New Zealand
New Zealand set for stellar vintage in 2013 Wine producers across the Tasman are reeling with excitement at the prospect of a cracking vintage, with yields and fruit quality looking consistent overall. Nelson
GOOD WINTER RAINS followed by a fine, sunny start to the growing season has allowed for a great start to vintage 2013 in Nelson. “Have you ever said, ‘I remember how warm and great the summers were when I was growing up?’ Well this season here in Nelson has been even better than that,” says Richard Flatman, viticulturist at Neudorf Vineyards. “A great warm spell over the region’s flowering period was important this season – and we got it.” Bunches are reported to be medium, not compact, and berry size moderate. There has been very little disease pressure due to less rain and high sunshine hours. Flatman says all varieties are looking good at this stage, particularly Pinot Noir and Chardonnay. “Growers are also very happy this season with a price growth of over 200 per cent for Sauvignon Blanc,” he said. “Some were paid $1500 per tonne this year compared with $400 last year.”
Canterbury has welcomed the warm start to the 2013 season, especially after the cool 2012 vintage. Glen Creasy, senior lecturer in Viticulture at Lincoln University, says while there were some frost events early in the season, most vineyards in the region were well prepared and there was minimal impact. “Aside from a few large rainfall events, the season has had decent dry spells and above average warmth,” Creasy said. ”Indeed temperatures have been above 30°C a refreshing number of times so far. The weather around fruitset was a bit unsettled, leading to a variety of berry sizes, but this limitation in yield and more open clusters should be of benefit.” By late February, nets were on and the berries were gaining more colour. The first grapes for sparkling-based wine were harvested in early to mid-March. Dom Maxwell, of Greystone Wines, said all signs were pointing to a quality vintage. “As it stands we are extremely excited
Hawke’s Bay After two relatively tricky vintages in 2011 and 2012, Hawke’s Bay has redeemed itself in 2013, with long hot summer days making for a good start to the vintage. Overall, crops are at moderate levels, a consequence of last year’s vintage and a fine but cool spring this year. Sacred Hill’s chief winemaker Tony
Wine Marlborough deputy chairman Clive Jones says the Marlborough 2013 vintage is looking to be a cracker season. Photo: Wine Marlborough.
Pinot Noir grapes at Neudorf Vineyards, in Nelson.
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about the prospect of wonderful fruit intensity from the 2013 harvest. We had multiple frost events but most only just below zero, with the exception ‘the big one’ on 7 November,” he said. “This reduced crop levels in low-lying, unprotected and even some protected sites that rely on a good inversion layer. Since the frost event we have had very settled weather, with high sunshine hours through to veraison.” A handful of large downpours around midsummer led to substantial canopy growth, allowing the vines to catch up after the frost event. Like in Nelson, growers in Canterbury are reporting smaller bunches.
April 2013 – Issue 591
Bish said warm weather continued from December through to February. “We have not had to crop-thin at all – just a veraison green harvest on the red varieties to align maturity,” he said. “Bunches are relatively loose and not giving us any concerns, and total cluster counts are on the low end of the spectrum. It seems it’s a winemaker’s year.” Speaking of his Gimblett Gravels vineyard, Bish said crop levels were moderate, showing a good set with a low cluster count. He expects yields in the vicinity of 5-7 tonnes per hectare. “Merlot is only a couple of weeks off getting into the harvest window, and everything is clean and beautifully coloured,” he said. “There is a real sense of excitement. We are overdue for a good vintage, and this is shaping up to be a great vintage.”
Marlborough This year is gearing up to be a brilliant vintage for Marlborough, with low disease pressure and yields on target. “During January and February 2013, Growing Degree Days (GDD, where the average temperature is above 10°C), were higher than the long-term average. Similarly, rainfall during January and February were well below the long-term average,” Pickens said. Marlborough Winegrowers deputy chairman Clive Jones has welcomed the warmer summer Marlborough has experienced this season compared with the cooler summer last year. “This year we have actually seen the sun! Early spring was a nervous time
Pegasus Bay vineyards in the Waipara Valley.
with higher than normal frost count but nothing that wasn’t manageable and no significant damage occurred,” Jones said. Bunch counts were down across the varieties and the fruitset was good, which is likely to result in moderate crops. Jones said Marlborough vineyards were in great shape, with balanced vines. “If the normal dry Marlborough autumn weather occurs we are looking at a cracker season,” Jones said. “There is a much more positive mood in the region with grape and unpackaged wine prices firming and the wineries looking very empty prior to harvest.”
Waipara Valley The 2012-13 season has been one of the hottest summers in the Waipara Valley since the scorcher of 1998, according
Paul Donaldson of Pegasus Bay. This year’s crop levels have been slightly lighter compared with previous years, with smaller bunches. This, combined with the warm weather, is likely to produce very ripe fruit and an early than average picking date, Donaldson says. “This year has also seen an amazingly consistent set. Normally there are one or two varieties that set slightly lighter or heavier than the other, but it has been amazingly consistent this year, most likely due to the very settled weather over flowering,” he said. “At Pegasus Bay, we passed verasion at probably a week ahead of average. Personally I think 2013 is shaping up to be one of the best vintages we have seen in a decade.”
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Wine producers reap vine times in island state Bold investments, major accolades and new varieties are among the exciting happenings causing Tassie wineries to glow in optimism. A German twist WHITE ROCK VINEYARD is making history this year, becoming the first winery in Tasmania to introduce the German red wine, Dornfelder, to the market. Owner Phil Dolan decided to plant the grape variety after a number of customers at the Lake Barrington Vineyard cellar door, where he sells his wine, asked for more reds. “On a trip to Europe to visit my grandchildren, I visited the Moselle region of Germany to find out more about it and liked what I saw,” Dolan said. White Rock’s version of Dornfelder is called Dawn Red and will be released just in time for summer this year. “The pulp of the grape is red so it gives the wine a beautiful colour, but it doesn’t pretend to be anything exotic – just a very velvety, easy drinker,” he said. “We will blend it with Pinot Noir to give it some complexity, but it does have good tannin and acid. The blending will give it some fruit and make it the perfect accompaniment for a barbecue or picnic.”
White Rock Vineyard has become the first winery in Tasmania to introduce the German red wine, Dornfelder, to the market.
Archive records unique wine history The efforts of the people who pioneered wine production in the Tamar Valley have been brought to life though a new digital historical archive. The Tamar Valley Wine Route (TVWR)
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has developed the collection for its website to preserve memories of the grapegrowers and winemakers who made the region famous for its wines. The site highlights 32 wineries in the Tamar Valley – the oldest winegrowing area in Tasmania – via an interactive and downloadable map where users can narrow their search by distance, opening hours and wine variety. Tamar Valley Wine Route history project manager Sally McShane said the key motivation in developing the archive was the need to preserve stories of the wine region’s founders. “It is a time of generational change in the Tamar Valley. Some of the pioneers of the industry are moving on and they have been very generous and encouraging to new entrants in the industry,” McShane said. “Having a digital archive rather than a physical museum enables us to present a dynamic history to anyone – no matter where they are in the world.” For more information, visit: www.tamarvalleywineroute.com.au
Tool to minimise impacts of smoke Wine Tasmania has announced the development of a new online tool that could help vineyard and land owners avoid the impacts of smoke taint on winegrapes. The tool, www.tasvine.org, provides information on the status of a vineyard from ‘no danger – green’ (post-harvest to budburst) to ‘low danger – amber’ (major phase of growth) and finally to ‘high danger – red’ (ripening to harvest). The status is represented on the website with a coloured marker indicating the location of the vineyard and contact details of the owner. Freely available, the tool aims to assist in the collaboration and communication between vineyard owners about potential impacts and timing of smoke. Wine Tasma nia’s indust r y development and extension officer David Sanderson said the impact of smoke on vulnerable winegrapes can render them unpalatable. Some compounds that are found in smoke enter through grapevine leaves and bind to sugars naturally produced as winegrapes are ripening. When the grapes are crushed and fermented, these compounds are released and produce unpleasant flavours in the resulting wine. www.winebiz.com.au
Native Point sweeps award floor Native Points Wines is proud to be the winning winery of several esteemed honours for its 2011 Sauvignon Blanc. Based in the Tamar Valley, the winery has scooped trophies at the 2011 National Cool Climate Wine Show and the 2012 Boutique Wine Awards, and was selected to represent Australia at the 2012 Five Nations Wine Challenge. Native Points Wines’ owner Sheena High said the awards were confirmation of the unique location and microclimate of the winery’s vineyard. “Site selection is so important in marginal cool climate regions when the goal is to produce wines of distinction. The awards and accolades are confirmation that the unique location of the vineyard has the potential to achieve our initial aims,” she said. Established in 1999, the 5ha Native Point vineyard is located on the eastern side of the Tamar Valley, about 20 minutes from Launceston.
New EO for Tamar Valley Wine Route The Tamar Valley Wine Route has appointment Misty Sanderson as its new executive officer. In a nnouncing Sa nderson’s appointment, in January, the TVWR recognised the significant commitment and contribution that its outgoing executive officer Corey Baker had made to the TVWR and the broader Tasmanian wine industry. His contribution to the Tasmanian wine industry includes involvement with the Vineyards Association of Tasmania; helping to establish Wine Tasmania; chair of the TVWR as well as serving on several tourism committees. Sanderson comes to Tasmania from the Hunter Valley, NSW, and brings with her a range of marketing, event management and tourism experiences. Her previous roles have included working with local government and tourism operators within the food and wine sectors. She was recently appointed to the role of marketing manager with Harvest Market in Launceston. The TVWR is a member based organisation, comprising more than 30 cellar doors spread along 170km of touring route in Tasmania’s Tamar Valley. April 2013 – Issue 591
Close-planted vineyard to yield quality results Vintage 2013 will see the first pick from Sinapius Vineyard’s close-planted vineyard. In 2007-08, Vaughn Dell and Linda Morice of Sinapius Vineyard removed 0.8ha of underperforming Chardonnay before changing the row orientation from east-west to north-south and planting new vines at 1.3m x 1m. Over the past few years, they have crammed 10 clones of Pinot Noir, eight clones of Chardonnay and three clones of Pinot Gris into this block. They have also close-planted Grüner Veltliner. “We are really looking forward to see the wine we make from this closeplanted block, with expected yield per vine to be somewhere around 700g/ vine for the Pinot Noir and Chardonnay, a little higher at around 1kg/vine for the Pinot Grigio and Grüner Veltliner,” Morice said.
Taste of Tamar Eighteen vineyards from the Tamar Valley will come together to showcase their finest wines in July for the Taste of Tamar festival. The festival, now in its third year, will see more than 80 wines available to taste and purchase from 20-21 July, at the Salamanca Arts Centre, in Hobart. Rita Richter of Grey Sands vineyard says the Taste of Tamar is a good opportunity for enthusiasts to not only try the wines but to meet the people who make them. “The Tamar Valley is one of the very few wine regions in Australia to be
April 2013 – Issue 591
Close-planted Pinot Noir soaking up the sunshine at Pipers Brook vineyard in Tasmania.
growing strongly in popularity despite the current challenging economic climate,” said Richter, who believes this year’s attendance will exceed 500 people. “Many of the producers don’t have distributors or representation and some don’t have regularly open cellar doors. This event gives the participants a chance to show visitors and residents of Hobart a taste of what they have to offer, make sales and perhaps get listings at restaurants.”
Wine Tasmania backs wine expansion plan Tasmania’s leading wine body has welcomed the state government’s plan to expand to the wine industry and create jobs.
Premier Lara Giddings last month announced grants of more than $1 million to expand grape plantings by 200 hectares in the state. The Premier said the move would create about 370 fulltime jobs and a number of part-time jobs in the wine industry. Wine Tasmania CEO Sheralee Davies said the support would help the state’s wine producers meet demand for their premium cool-climate fruit. “Growing grapes and making wine is capital intensive, with many years before any return on investment. This program provides support for wine producers in the initial period before new vines are producing fruit and therefore income,” Davies said.
Grapegrower & Winemaker
20 Australian wine companies Annual review opens the window on our biggest producers Contents Wine Australia.............................................................. 19 Winemakers’ Federation of Australia......... 20 Wine Grape Growers Australia....................... 21 Wine Industry Suppliers Australia................ 22
Top 20 by revenue: Treasury Wine Estates.......................................... 23 Premium Wine Brands Accolade Wines
Casella Wines.............................................................. 26
THE EDITORIAL TEAM at Grapegrower & Winemaker – editor Grahame Whyte and journalist Kellie Arbuckle – take great pleasure in introducing our annual Top 20 wine companies review, plus the New Zealand Top 5. Thanks to our editorial panel member, Bob Campbell MW, for his insightful questions that we posed to New Zealand’s Top 5 CEOs. Business journalist Ed Merrison has interviewed all the leaders of the Top 20 Australian wine companies and talked to them about how they have fared during the past year – a year that would accurately be described as immensely challenging on a number of fronts. The resilience and strength of the Australian wine industry shines through in these revealing interviews, as CEOs share their thoughts on the issues that dominate discussions in the wine sector.
With Australian companies represented at the very pinnacle of the global industry, the following responses will be eagerly read by our subscribers around the world. They report on our strong presence in key markets such as the UK, US and China; on the influence and impact of our friendly rival across the Tasman Sea; and on the way key companies respond to rapidly changing markets and seize opportunities wherever they arise. Statistical tables were generated from information collected for The Australian & New Zealand Wine Industry Directory 2013, skilfully compiled by Michael Major of Michael Major Media. This publication also provides a lot of interesting information about our industry. The 2013 edition of this essential publication is now available from Winetitles – see www.winebiz.com.au for more information.
Table 1. Top 20 wine companies by total revenue.
Table 2. Top 20 wine companies by total production.
Australian Vintage..................................................... 27 De Bortoli Wines........................................................ 28
Treasury Wine Estates
Pernod Ricard Pacific
Treasury Wine Estates
Casella Wines Pty Ltd
Brown Brothers.......................................................... 30
Pernod Ricard Pacific
Tahbilk Group.............................................................. 31
Grant Burge.................................................................. 32
De Bortoli Wines
Kingston Estate Wines
McWilliams Wines Group
De Bortoli Wines
Angove Family Winemakers ........................... 34
The Yalumba Wine Company
McWilliams Wines Group
Peter Lehmann Wines........................................... 34
Brown Brothers Milawa Vineyard
Qualia Wine Services
Qualia Wine Services............................................. 35
The Yalumba Wine Company
Grant Burge Wines
Kingston Estate Wines
McWilliam’s Wines Group.................................. 29 Warburn Estate........................................................... 30 Yalumba Wine Company.................................... 30
Kingston Estate.......................................................... 33
Littore Family Wines............................................... 36 Tyrrell’s Vineyards..................................................... 36
Angove Family Winemakers
Angove Family Winemakers
Wingara Wine Group............................................. 36
Peter Lehmann Wines
Wingara Wine Group
Berton Vineyards....................................................... 37
Qualia Wine Services
Brown Brothers Milawa Vineyard
Littore Family Wines
Littore Family Wines
Wingara Wine Group
Salena Estate Wines
Subscribers can access an online version of each print issue plus over 1000 archived articles.
now online 18 The Australian & New Zealand Grapegrower & Winemaker
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Subscribe by: T: +618 8369 9522 W: www.winebiz.com.au/gwm E: email@example.com April 2013 – Issue 591
20 Wine Australia is actively building sustainable demand for our wines Wine Australia chairman, George Wahby.
SINCE I BECAME chairman of Wine Australia on 1 July 2012, I wanted to make sure that management were completely aligned on where we needed to put our energy, and a focus that’s going to deliver the best outcome for the levy payers and industry as a whole. That’s where I started. The focus is 100% on what we defined as our key vision, which is to build sustainable demand for Australian wine globally. When you look at the past year, the focus on the activities of Wine Australia has worked extremely well. Normally with marketing, it’s very hard to measure successes, but Wine Australia’s realignment on making sure that we’re focusing on what’s important in building value of Australian wine has really resulted in a couple of things; the average value of bottled wine shipped outside of Australia increased to $4.43 per litre and bulk wine increased $1.03 per litre. We should put this into context; when we are looking at bottled shipments, in 28 out of the last 30 months there have been increases in the average value of
April 2013 – Issue 591
bottled wine shipments, representing a 10% increase over that period. In bulk wine shipments, 23 of the last 30 months have seen increases in the average value, with an overall increase of 7%. And activities like the Next Chapter trade tasting in San Francisco, which wasn’t just the old standard tasting – the feedback that we got from the media, sommeliers and the trade has been outstanding. Paul Kruger said Australia was one of the most exciting wine countries on the planet. I saw a range of diversity that I hadn’t seen for a long time and I was quite excited about what I saw. The other big thing that happened last year was the memorandum of understanding that was signed between Wine Australia and Tourism Australia – I think that’s a new chapter in the history of the Australian wine industry because we have tapped into a lot of the research undertaken by Tourism Australia to say how important it is to people visiting Australia to talk about food and wine. As a result this partnership, we have engaged heavily with producers and regional bodies to look at how we can best leverage and add value. They are very heavily engaged in the Savour 2013 event that is taking place on the 15-18 September in Adelaide. The smaller producers are excited too, since they are basically going to leverage on the back of that. The catalyst for the Savour 2013 event was that as a board we were very adamant that if we are going to achieve sustainable demand, that will start by engagement. So we’re bringing around 800 of the leading trade professionals – wine importers, distributors, on-premise and off-premise professionals, independent chain representatives, the hotel sector, food and beverage professionals, Australian wine producers, brand owners, lifestyle media – together in one unique event. The whole idea is global engagement in Australian wine. The main opportunity for exports in the past year without a doubt from what we’re seeing is the growth in Asia. Due to proximity and an emerging www.winebiz.com.au
middle class, the cultural interest in wine has really resulted in some great opportunities in those Chinese markets – and not only China, but some of the other Asian markets as well. Hong Kong was up 30% and China was up 40% in the above-$10 a litre exports. You can see the growth and excitement that is taking place here. I think the Asia region for us remains quite exciting. And from my perspective, the USA is still the biggest premium importer of wine in the world and we are starting to get to the decision makers to say we are more than what you think we were – high volume and a fun brand. We make some really serious wine and people are starting to take it seriously. One of the exciting things about the UK is the £7 and above category; it’s still running quite substantially and we’re holding our market share. The average bottle price of wine is still higher than most other importers into the UK. The Australian dollar continues to be a major challenge for us and I think we’ve just got to get used to it. No one wants to get in a position where they predict what’s going to happen with that. It causes issues; number one, exports are more expensive; number two, imports are cheaper so therefore it provides opportunities domestically for imports which puts more pressure on us as well. Along with that challenge taking place with the currency, input costs are still increasing – labour costs, fuel, chemicals – and a lot of people don’t realise the pressures that producers are potentially under. I think we are seen in a positive light overseas. Normally we are more critical of ourselves than anybody else, because we’ve got high expectations of what we want to do and what we want to achieve as an industry. I think our reputation as a wine-producing country is very good and it is up to us as an industry to take that, build on it and turn it into a value creation. I do believe the ball is purely in our hands here.
The Australian & New Zealand Grapegrower & Winemaker 19
20Australian wine companies Winemakers’ Federation looks at where future industry profitability will be found Winemakers’ Federation of Australia CEO Paul Evans
I DON’T THINK there’s been much change in the past year. We’re still finding that conditions are pretty challenging. The exchange rate hasn’t moved at all, we continue to confront a challenging domestic retail environment, we continue to see a significant proportion of imports here in the domestic market and we continue to experience flat demand growth. There have been some positive signs, both on the supply side and the demand side in the international marketplace, but to be honest it’s been another year of the industry fighting its way through. The exchange rate casts such an enormous shadow, but companies have been dealing with that for some time and are obviously adjusting their businesses over the longer term to the likelihood
that the exchange rate will remain at or above parity for some time. It does make things very tough for us when competing internationally against lower-cost New World producers and it does provide an opportunity for imports to come here on a very competitive basis as well. If you’re looking at the sub-$15 category, clearly the exchange rates make imports an attractive proposition. There is a ceiling to the proportion of imports. Nielsen said that the off-premise proportion of imports now is 16% – the vast majority of that, of course, is coming from New Zealand. There will be a ceiling to consumer appetite for imports but it does increase competition for shelf space – there aren’t any immediate quick fixes to that one. I think the retail environment continues to challenge, the threat of regulatory creep and the activities of the public health advocates present the industry with a number of threats and going into an election year we are looking at it very carefully, as you can imagine. There are proposals for minimum prices on wine, to raise the total tax take from wine, to crimp our ability to market and advertise our products and engage our customers, and proposals for more prominent warning labels on wine. Wherever you look there is someone wanting to move the goal posts on the industry and not a heck of a lot of regard
Our reputation for producing value at any price point remains intact and that will stand us in good stead
20 The Australian & New Zealand Grapegrower & Winemaker
for the downstream impact, on the regions, on the people and the economic and social good we do. It’s a very complex and challenging environment, both domestically and internationally. There are a number of issues and not a lot of easy solutions. However, I think there is cause for optimism and my optimism stems from the fact that Australia remains a fantastic place to grow grapes and make quality wine. I think our reputation for producing value at any price point remains intact and that will stand us in good stead when the inevitable cycle turns in our favour. When that is and what the catalyst for that is, is something the expert review for WFA is looking at, and when that review is concluded I think we will have a much better idea of where future profitability for the industry will lie. There are some positive signs coming out of the US and China, but we need to understand the exact nature of those opportunities and make sure we have the right activities to capture those opportunities. We have very good relations with the Top 20 companies. Quite a few of them are represented around my board table and in my committee structure, so they are part of the federation, part of its decision making and part of what shapes our future and priorities. I would describe it as a constructive and intimate relationship which really reflects well on the industry. You have companies with a lot of commercial interests at play, yet they come to the table to progress an industry-level discussion which reflects very well on the industry and the people who are leading those companies. Our two key priorities through our strategic plan are profitability and wine and health issues. This reflects what we think are the two greatest areas of opportunity and challenge. It’s where our members’ focus is and it’s where we can do the most good on behalf of our members, including our Top 20.
April 2013 – Issue 591
Direct Print Bottles
Grower organisation gives notice to winemakers on deteriorating relationships Wine Grape Growers Australia executive director Lawrie Stanford
THE BIGGEST ISSUE that influences the relationship between growers and winemakers is winegrape prices and the way they are determined. Clearly the Top 20 Australian wineries come into focus here because of the major proportion of purchased fruit by far that they account for. While there are clearly many wineries that conduct their businesses ethically, all too often there are examples that can be pointed to of the opportunistic exercise of market power by off-takers, unreasonable imposition of risk on the grower, dismissive or manipulative use of assessment systems or protocols to take advantage and, at worse, downright unethical behaviour. The Australian Wine Industry Code of Conduct is the industry’s attempt to codify the basic tenets of good commercial practice that inevitably influences the relationship between the grower and the winemaker. Unfortunately, WGGA hears regular complaints that the basic tenets of the code are not being adhered to. These include complaints about failure to indicate prices prior to fruit off-take, failure to pay, making new purchases without having cleared payments owed from prior seasons, inadequate resourcing of important assessments that determines price, and lengthy periods for payment that are effectively loans from poorly paid growers to conduct winery business. Illustrating a wide disregard in the industry for the basics of good commercial practice is the low level of sign-up to the code. Among the Top 20 wine companies in Australia, a bare four are signatories to the code. Of course we congratulate Treasury Wine Estates, Premium Wine Brands, Accolade and Yalumba as those signatories and, while they account for around a third of the national crush (and this is not insignificant), it is well short of the industry’s own target for the number of signatories. The target was for 25 of the top 100 Australian wine companies to sign up to the code by 30 December 2012. That is, all of the Top 20, not just four of them. WGGA strongly believes there is a April 2013 – Issue 591
need for much improved market signals for required fruit and sharing of the benefits, and risks, of profitable trade. A part of this will come from better contracting processes, as spelt out in the code. Another aspect is greater sophistication in the systems employed in measuring the characteristics that determine price. Improvement in these areas is not just fair, and will engender better relationships, but they are also the market mechanism by which sustainable businesses are established. It teases the mind to think that one of the reasons Australia’s oversupply is so intractable could have something to do with the fact that the relationships, systems, protocols and sharing of risks and benefits do not exist in sufficient magnitude to influence the mismatch between supply and demand. Another indicator of the deteriorating relationship between growers and the major winemakers is the increase in the number of grower-winemaker relationships that are being supplanted by grower directto-retailer relationships. In response to an inability to sell fruit to winemakers or because better returns are available from retailers, growers are increasingly converting their fruit to wine and selling direct to the retailer. Herein lies a wakeup call for winemakers. The strengthening relationship between growers and retailers carries many dangers for winemakers, including undermining the winemakers’ private brands and their negotiating power with retailers. It’s time the Top 20 winemakers paid more attention to their relationship with growers. www.winebiz.com.au
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The Australian & New Zealand Grapegrower & Winemaker 21
20Australian wine companies When large companies purchase, everyone benefits says WISA Wine Industry Suppliers Australia CEO George Willcox
THE SIGNIFICANCE OF the Top 20 Australian wineries in terms of volume is critical to all suppliers. One of our members said, “These large users of our products and services often provide a base platform for our viability going forward. The second and lower tier wineries can then benefit from the results of what works and what doesn’t work, without having to take major risks themselves. We deal with the largest to the smallest wineries and many intermediary stakeholders in the wine supply chain. Having support from the larger players on particular products allows us to prove concepts. This ultimately allows innovation, be it product or service orientated, available from the largest to the smallest players at economically viable levels, therefore providing benefit to the whole of industry.” Like many member-based associations not funded by compulsory levies or government assistance, WISA finds itself in a challenging position. Membership numbers are critical for the future of the association. Increased numbers will allow us to manage our cash flow and continue to offer programs and events to our members. In 2013, with a new and invigorated committee, there will be significant consultation with members and some hard decisions will need to be made to firm up the future of the association. Our members, and to a lesser extent the industry as a whole, will need to decide what role WISA will continue to play as 2013 progresses. WISA has maintained an open and honest dialogue with all stakeholders − be they members, external partners and the wider industry − on our current tight fiscal position. It is only through hard work from our management committee and industry co-operation,
We have recently assisted our oakimporting members achieve major concessions from DAFF in respect to the removal of import permits for their products.
that we will see positive resolutions. For example we have recently assisted our oak-importing members achieve major concessions from DAFF in respect to the removal of import permits for their products. A post implementation review revealed a break down in this new system, forcing importers to undergo compulsory inspections at AQIS facilities rather than traditional random tailgate inspections. We were able to take this issue up with DAFF and provide a positive resolution for members. WISA has recently reinvigorated its
22 The Australian & New Zealand Grapegrower & Winemaker
technical and innovation subcommittee. It includes representation from the WFA and the Australian Society of Viticulture and Oenology. It is initially planning a large-scale survey of our value and supply chain to find out what challenges the industry faces, and how we may collaboratively aim to overcome them. Moving on from that, we aim to provide a seminar program to address these issues and provide a platform where suppliers and industry can come together. More information will be available to members though regular updates.
April 2013 – Issue 591
20 are demanding iconic western brands.” The company − which owns the Penfolds, Rosemount, Wolf Blass and Lindeman’s brands − sold 16.5 million cases worldwide in the first half of 201213. That translated to net sales revenue of $816.9m, down 2.2% on the same period a year earlier. Earnings before interest, tax and adjustments for the value of vineyards fell 12.5% on a constant currency basis to $73.4m. One of the key reasons for that profit decline was the increase in the cost of goods sold, up $2.24 per case on the back of rain-affected vintage 2011. Another factor was the strong dollar. “Given that TWE exports two thirds of the company’s Australian wine production, the continued strength of the Australian dollar remains a key challenge, particularly for our wines which compete at more commercial or popular, price points,” says Dearie. Dearie is keen to emphasise that those price points are not the focus for TWE; indeed, some of that drop in first-half volume was put down its decision to exit sales of some lowest-price lines of Rosemount, Wolf Blass and Lindeman’s in UK supermarkets, where they were frequently offered in multibuy deals. TWE is pinning its hopes for an improved second-half performance on its “After three decades of excess higher-priced offering. The company is production, we’re moving into a balanced making up to 15% more luxury and mass supply position. In developed markets, prestige wines available for sale. ageing populations are drinking more TWE has also been investing. Over the wine, and demanding wines of a higher past 12 months, it has purchased more quality. And in developing markets much - younger 1 2 0 consumers 1 3 - 0 3 - are 2 0 engaging T1 5 : 5 8 : 2 5 + than 1 1 : 600 0 0 hectares of vineyards in Napa Valley and South Australia, including earlier with wine, and when they do they
Treasury Wine Estates
HOWEVER TOUGH CONDITIONS may be at home in Australia, Treasury Wine Estates is given heart by the global picture. It sees the market as the most positive it’s been for 30 years. “Across the world the demand for luxury 3 7 5and 6 Fpremium l u t e 8wine 8 x 1is8increasing,” 5 _ GGW says chief executive David Dearie.
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April 2013 – Issue 591
The Australian & New Zealand Grapegrower & Winemaker 23
20Australian wine companies two sites in the Barossa and one in Eden Valley. It’s on the lookout for greater quantities of premium fruit to go into its flagship wines. The past year has also seen it expand fermentation capacity at the Penfolds winery in Nuriootpa and acquire the remaining 50% of what is now the Matua Marlborough winery in New Zealand. TWE’s top export markets for Australian wines are the US, UK, Canada, Nordics and Asia. Citing industry-body projections for US consumption to hit 500 million cases within the next 10 to
15 years, Dearie identifies that market as “a very important source of our future revenue growth”. He also promises to place a lot of emphasis on Asia in general and China in particular in the years to come. Following the announcement of the company’s half-year results, Dearie also spoke of “tremendous opportunities” in other emerging markets it is yet to penetrate, such as Russia, India and Brazil. “As we go forward you’ll see us moving into more of those markets, you’ll start seeing our brands on the back of the very strong vintage that we’ve had
in 2012 and what looks to be a very promising vintage in 2013,” he said. On that same occasion, Dearie called for government funds to be more effectively spent so that ‘Brand Australia’ could tell a better story to a broader audience across the world. “What made Australia famous in the first place was our great quality regional wine and probably over the past 10 years or so we’ve dumbed that down a little bit and we’ve become more of a commodity-style wine in a lot of markets out there,” he said. “We’ve got to spend some money getting that quality message back out again.”
Orlando Wines – Premium Wine Brands
Orlando Wines is part of Premium Wine Brands, the global wine business of Paris-based drinks giant Pernod Ricard. It has operations in four countries and distribution in over 70 markets worldwide. Orlando managing director Brett McKinnon says the diverse geographical footprint offers some insulation from the negative effects of the high Australian dollar. That said, McKinnon thinks the currency and margin pressures in export markets will be the biggest challenge for the Australian industry this year. Orlando Wines sold 6.9 million cases of Jacob’s Creek in 2011-12, representing a 2% increase in value. That’s as the company pressed on with its premiumisation strategy for mature markets. This entails adding high-end products to its range, building brands through high-value marketing and sponsorship initiatives, and increasing prices where appropriate. It’s a strategy that requires forward thinking and long-term commitment if it is to be effective, says McKinnon, not least because price rises can cause a short-term decline in sales volumes. Orlando has played the long game and held its nerve in the UK − its biggest export market − and it appears to be paying off. McKinnon says Orlando is well placed for long-term value growth in the country, where Jacob’s Creek operates at a price premium to the majority of its key competitors.
After Britain, the US, Canada, NZ and Ireland rank as Orlando Wines’ top five overseas customers, and McKinnon expects them all to keep performing well. “However, our offering is by no means focused on these regions alone,” he adds. “We are seeing extremely exciting growth in emerging markets such as China, India, Thailand, Vietnam, Russia and Poland.” Another trend catching McKinnon’s eye is the move towards light and fresh varietal wines, such as Pinot Grigio and Sauvignon Blanc. He expects these, and sweeter wines such as Moscato, to continue to gain traction in Australia and key export markets. In response, Jacob’s Creek recently added Vermentino to its Cool Harvest range of wines, which already features Pinot Grigio and a still and sparkling Sauvignon Blanc. The past 12 months have also seen Orlando extend its St Hugo label beyond Coonawarra Cabernet Sauvignon to take in Barossa Shiraz, Barossa GSM and a Shiraz Cabernet. It has also launched market-specific products such as the China-only Barrel Selection range and Jacob’s Creek WAH, a wine to partner sushi for the Japanese market. Other new releases are likely this year, says McKinnon. Innovation and brand building are vital in a world where retail consolidation is a reality that “can’t be ignored” and where consumers are confronted by ever more choice thanks to cheaper imports, according to McKinnon.
24 The Australian & New Zealand Grapegrower & Winemaker
That’s why it’s imperative for Australian wineries to focus on making premium wines for both the domestic and export markets. “This will ensure that the reputation and ‘brand’ of Australian wine globally remains strong, and that consumers globally appreciate the value for money and extremely high-quality wines that are being produced in this country,” he says. This also helps explain McKinnon’s confidence in his own company. “Orlando Wines is structured around Jacob’s Creek − one of the most iconic brands our country has produced − and we’re continuing to invest in this brand through marketing and innovation to ensure it maintains its position as an Australian icon at home and abroad.” April 2013 – Issue 591
Top Accolade Wines hasn’t got all its eggs in the Australian basket. And that’s just the way Michael East likes it. As it is, the “horrendously high” Australian dollar has forced Accolade to broaden its options, according to the commercial general manager for Australia and New Zealand. Accolade beefed up its sales and marketing presence in the US last year with the purchase of California’s Geyser Peak winery. “We anticipate that will speed our growth in North America,” says East, who cites the company’s ability to produce and ship wine from the US or South Africa as another means of mitigating currency risk. He also hails last year’s deal with Treasury Wine Estates, whereby TWE bottles Accolade’s wine in Australia while Accolade returns the favour in the UK and Europe. “In order for us to be competitive in any offshore markets, any costs become critical. This move creates a new paradigm for the industry. It recognises that we are in the business of producing wine and getting it to consumers.” The UK remains by far Accolade’s largest export market, followed by the US, Canada, New Zealand and Japan.
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The Australian & New Zealand Grapegrower & Winemaker 25
20Australian wine companies Exports account for 60% of the business, and while this proportion has dropped over recent years, the company is sending more wine into North America, continental Europe and Asia. Accolade is building its presence in China but the business is proceeding with caution, warning that consumption patterns remain deeply uncertain. East says Chile is poised to make significant inroads against Australia’s global market share this year, although New Zealand is the number one competitor. What’s more, the way Australians have embraced the flavour profile of New Zealand Sauvignon Blanc leads him to believe that this will continue to be the star varietal domestically. As for Australian wine, East thinks
Shiraz will enjoy the greatest volume sales growth. Accolade − which is home to Hardy’s, Leasingham, Brookland Valley and Tintara − is keen to sell more Shiraz, especially in the $15-$40 bracket. East is keen to access more premium fruit, and would like to release new styles and brands into this same price range. Despite the global breadth of Accolade’s operations, its fortunes are bound up with domestic conditions. “We need to ensure that our base remains stable within the Australian market so that we can continue to compete,” East says. With the industry in such a precarious position, he warns that any change to the wine taxation system could cause significant damage. At the same time, he says an increase in
pricing would be more than welcome. “There needs to be a price rise in the broader market. We haven’t kept pace with inflation. In my mind we need to be far more disciplined about taking price increases.” As for Accolade itself, East is pleased with progress since the major restructuring that occurred between 2008 and 2010. There are no plans for further divestments or major plantings, although options are open as far as acquisitions go. “We’ve got our holdings in a shape we’re happy with,” says East. “We think we’re close to getting our supply/demand situation in balance. It’s always hard with a product like wine where you are trying to anticipate sales 18 months or more out.”
Casella Wines doesn’t have a problem with its finances or with [yellow tail]. That’s the unyielding stance of managing director John Casella, who defended the company’s position after it posted a shortfall of $30m for 2011-12 – its first annual loss for at least 20 years. That meant some of its covenants weren’t being met, resulting in talks with the bank to allow for more flexibility in the future. “Casella Wines is continuing to work with its lender and has been granted an extension while discussions continue,” says Casella. “We have a longstanding relationship with our financial institution and the company balance sheet remains solid.” More specifically, Casella denies his most successful product has fallen out of favour. “Globally, year-to-date sales of [yellow tail] are the best we’ve ever had in terms of volume. The brand is strong,” he says. The problem, as for so many producers, is the currency. Casella sells 8 million cases, or three-quarters of his production, to the US. Those sales only have to slip a fraction, as they did last year, and the impact is huge. “The process of diversifying markets is always part of what we do,” says Casella. “We don’t want to be too dependent on one product or one market. The thing is, the US market is
so large that it’s hard to counterbalance with sales elsewhere.” After the US, Canada, UK, Germany and Japan are Casella’s biggest overseas customers. “China is there for the longterm but competition is intense. It could be three to five years before it makes it into our top five export destinations,” he says. Casella believes Cabernet Sauvignon will be the top-performing mainstream Australian grape variety this year. “Cabernet in the US is number one, as well as in China, in Asia. Even though the percentage growth may be fairly small, you’ve got to remember the base is big.” And it’s a sure bet that Cabernet will feature in the range that is “a work in progress” for Casella, who emphasises the need to offer products at different price points. The company has holdings in the Barossa, Adelaide Hills, Padthaway, Wrattonbully and Langhorne Creek earmarked for the line. “Following the essence of [yellow tail], it would have to offer excellent value for money at its price point, which could be anything up to $100 a bottle,” he says. “As long as we can make a good product and do so year in, year out, we obviously know we can sell it because of the weight of the distribution network we have.”
26 The Australian & New Zealand Grapegrower & Winemaker
Domestically, he’s concerned about the effects of retail consolidation. “Diversity is what a good business is about, and it’s what a good country is about. What we’re seeing here is, to a certain extent, the elimination of diversity. The issue is that might reduce and subdue innovation because there’s only a limited way to get products to market.” Casella says he’s confident that the decline in Australian wine sales has bottomed out. What the country needs to do now is put more thought into the way it tailors its products. “I think we’ve got to build a little more character into the wine,” he says. “We’ve got to work on wine styles rather than wine quality. It’s nearly impossible to find a bad wine, but far easier to find a badly styled wine.” April 2013 – Issue 591
April 2013 – Issue 591
Australian Vintage counts the UK as its biggest export market − and there’s no doubt the high Australian dollar is making life tough there. The company cited a fragile British market as it posted a slight drop in net profit to $3.3m for the six months ended December 31. It concluded: “It will be challenging to profitably grow the UK market based on current conditions.” Even so, chief executive Neil McGuigan still sees plenty of potential upside in the UK and Europe, where it has a long way to go before achieving full market coverage. He also sees scope for success – and decent margins − with lower alcohol wine. “What’s on the market at 5.5% is not good enough. We think we can get a very good 5.5% product in the UK and
we’re going to release something this year.” McGuigan says the company is “really doing a job on China and Asia”, having long ago identified the importance of those regions. And then there are established markets where the wine is still seen to offer good value. Canada, AV’s fifth-largest export customer, is one example. “Canadians love our wine. We think there’s a huge opportunity for our brand there.” McGuigan sees a need to grow in Australia, as a means of hedging against the vagaries of the exchange rate. The company has also trimmed costs, renegotiating long-term grape contracts in Sunraysia and Griffith and working to ensure its production footprint is appropriate to its sales.
The Australian & New Zealand Grapegrower & Winemaker 27
20Australian wine companies Energy efficiency is a priority, with recent improvements in refrigeration to be followed by the introduction of solar power at the Mildura winery from 2014. Those savings are necessary because McGuigan doesn’t see the industry pressures easing any time soon. Retail consolidation is here to stay, so companies have to become smarter and more flexible with the big chains. Ditto for e-commerce retailers. And there’s no room for complacency on brands and products. “We need to engage with our consumers at the cellar door and online,” says McGuigan. “We need to create excitement
about brands and give consumers new and innovative varieties and winemaking techniques.” McGuigan sees Chile and Argentina as the two main threats to Australia’s global market share. Chile has the edge in China because of price, while the UK’s love affair with Argentinian Malbec looks set to continue. But McGuigan doesn’t believe these factors should distract Australian producers from their task, nor detract from their long-term advantages. The boss of AV, whose McGuigan Wines brand was last year crowned IWSC World’s Best Winemaker for the third time in four years, says Australians need
to keep making exciting styles of wines and winning international awards in order to stay at the forefront of people’s minds. They have to toughen up and stick to a business model that remains profitable in a high-dollar world. “Australia has lost out because we’re not the cheapest wine on the block any more. But my view is we’re still the best value in the world,” he says. “When the dollar changes, the Americans will suck up Australian wine. They’ll flip to it in the blink of an eye. Our wine delivers what the world’s palate is all about: varietal characteristics and purity of fruit.”
De Bortoli Wines
Like everyone else, Leanne De Bortoli is being careful. She and the family are keeping a close eye on all market developments, as well as potential opportunities. They won’t be rushing into anything. And that, she says, is the joy of being a family business: you get to take the long-term view. It helps, too, that the business is well established, with what she calls “a good support base out there”. Then there’s the diversity of the portfolio: vineyards in the Hunter, Riverina, King Valley and Yarra Valley, plus products that range from cask to inexpensive bottled wine, right up to Noble One and Yarra Valley reserve releases. That breadth also leaves De Bortoli Wines well placed to take advantage of consumption trends, should Leanne’s predictions prove correct. Pinot Noir has become mainstream, she says, and De Bortoli’s scored a lot of success with its mid-priced Windy Peak and Gulf Station examples. She’s witnessed a strong thirst for premium dry rosé and thinks that cool climate $20-plus Chardonnay will be in demand. Pinot Grigio, she thinks, will do particularly well this year. “We’ve planted a bit of it in the King Valley and Griffith to make the fairly neutral, Italian style,” she says. “When you look at sales in the UK and US, it’s been enormously successful.” Those two countries rank as the company’s top export markets, followed by China, Japan and Sweden. “I don’t see this changing too much, but if the Australian dollar weakens this will open up opportunities in the US and our Swedish sales might have an edge,” says export director Victor De Bortoli. Although he sees the Old World fighting back a bit in Europe and California regaining some of its traditional US base, Victor doesn’t identify any single country as posing a specific threat to Australia’s global market share. “There are many factors involved: value propositions, exchange rates, demand and supply, and country varietal commoditisation. By this I mean some of the most successful brands in the US are not country specific, so the Shiraz might come from Australia, Malbec from Argentina, Pinot Grigio from Italy, Chardonnay from California and so on.”
28 The Australian & New Zealand Grapegrower & Winemaker
The De Bortoli family.
Leanne says the company is working hard to maintain a presence in export markets and is prepared to be opportunistic in its dealings with overseas supermarkets. “When we put a tender out there, we sometimes have to walk away because we can’t always compete with the often ridiculously low prices that are around,” she adds. On home soil, consolidation to a couple of major retailers makes it very difficult to get shelf space and maintain it, according to Leanne. “However, we have to work with them to find a way that works for them to fill their requirements but also leaves some bread on the table for us. We’re fairly adaptable as a company, so we’re well placed to offer different wines from our portfolio at different price points. For a lot of smaller operators, I imagine it would be downright impossible.” Leanne says it’s impossible to say that any of the industry headwinds will ease next year, so producers must work out how to make their businesses more competitive. One option that merits further attention is e-commerce. “I don’t think we’ve yet seen the potential enormity of online purchasing and the role social media has to play with purchasing,” says Leanne.
April 2013 – Issue 591
We’ve realigned our distribution strategy in select markets and ensured we have the right product offering
McWilliam’s Wines Group
“Resourcefulness” is the watchword at McWilliam’s Wines Group. Chief executive Robert Blackwell has made a number of changes to its product offering and routes to market – and says it’s reaped great rewards. The group, which sold almost 5 million cases last year, has been busy creating efficiencies in all areas “to allow for investment in the right ones”. On the production side, it outsourced its Sydney production to Portavin, allowing it to introduce a centralised warehouse in Sydney, complete with a paperless inventory system. Meanwhile, its sale of the Lillydale Estate winery in the Yarra Valley was followed by investment in Margaret River Production Pty Ltd, which bought the Boar’s Rock winery in Jindong. Blackwell says the move gives him more winemaking control and influence in a region with real promise. Indeed, he’s backing Margaret River Semillon Sauvignon Blanc to muscle in on Marlborough and make a telling impact on the crisp, fresh white segment this year. On the domestic front, Blackwell says the key challenge is driving value and growth into a relatively flat market. He’s seen costs go up across the board, though there’s been “no significant shift in margins” over the past 12 months. McWilliam’s keeps pricing under constant review to ensure costs are recovered and margins can grow over time. One way in which McWilliam’s has responded to the squeeze is by introducing bottling in-market, though Blackwell stresses that this covers only select products and markets, and is marginal in the context of total export sales. Exports account for about a quarter of sales by volume, with the US, Canada, UK, China and Germany remaining the focus over the next three years. “We’ve seen significant growth in this area as we’ve realigned both our distribution strategy in select markets and ensured we have the right product offering and differentiation across customers,” says Blackwell. When it comes to international competition, Blackwell says the high dollar has allowed the likes of Argentina and Spain to make inroads into Australia’s global market share. However, he says this is mainly true of entry-level categories. What’s more, it has issued a wake-up call to Australia to reposition itself and further penetrate the higher-value, mainstream premium price points. It’s a call that McWilliam’s answered with a new portfolio strategy focusing on its top regional brands “In many respects, it’s all about coming back to what each brand stands for: making great, regionally expressive wines and being recognised as regional leaders,” he says. “It means we will be releasing individual parcel wines from our established brands such as Mount Pleasant, McWilliam’s, Evans & Tate and Brand’s Laira, that talk to their region and tell the brand’s story.”
April 2013 – Issue 591
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The Australian & New Zealand Grapegrower & Winemaker 29
20Australian wine companies
Warburn Estate Warburn Estate was primed for an overseas sales push – but not anymore. “We’re predominantly domestic, so the financial impact of the high Australian dollar isn’t as great as for others, but we did have plans to re-establish ourselves in the export market,” says executive director Justin Massey. “The impact of the dollar means these plans have been put on the back burner, as we continue our focus on cost savings.” Massey says the Griffith-based business, which is owned by the Sergi family, runs on stable recommended retail
prices and sales volumes. This means efficiencies are key if it’s to find extra margin. In 2012, that meant restructuring its management, “with a primary focus on operational aspects of the business”. The past year also saw Carmelo D’Aquino assume chief winemaking duties. The company, which changed its name from Riverina Estate in 2005, has more than 1000 hectares under-vine, a crush capacity of 40,000 tonnes and tank storage for 35 million litres of wine. It adheres to what it calls a simplistic winemaking philosophy: find out what the people want, and make it for them. “As a top producer, we respond to where the market is and where it is developing,” as Massey puts it. Looking at its top five export markets, that response has been strongest in the UK, Germany, Sweden, Finland and Asia. But Massey is wary of the industry shift towards bulk shipping into the UK, and the resulting reduction in value. “We therefore have an expectation for
Yalumba Wine Company
“It depresses me and the business!” That’s how Robert Hill Smith views the impact of the high Australian dollar. Yalumba’s proprietor says his family wine company spent the past year focusing on costs and efficiencies in all areas. “We make fine wine; that’s a given. Selling it profitably and connecting with our consumers in various segments is the challenge.” Hill Smith said Yalumba has seen margins compress over that time, due in part to the “significant transfer of production margin to retailers”. He expects those margins to tighten further, but has few plans to change pricing or launch new brands or products. “It’s about finessing the offer, not rewriting the script.” He says the concentration of retail share in Australia is a situation that “needs constant managing of partnerships”. “We are in business together and need to work together,” he adds. “We must get the sommeliers and gatekeepers back with our wines and not have them drooling over a no-pedigree Fiano or lowlife Assyrtiko.
It drives me mad because it’s about margin and pomp, not the wine.” Yalumba presently exports as much bottled wine as it sells domestically. It doesn’t ship in bulk and has no plans to start doing so. The UK, US, Canada, New Zealand and China are its top five overseas customers, and Hill Smith doesn’t foresee any changes to those rankings any time soon. When it comes to global competitors, he believes Chile or Argentina may be best placed to make further inroads against Australia’s market share − though putting vintage tonnages aside, any number of countries are working to erode Australia’s base. “We have to work harder at defining the quality of our offer in the world market,” he says. “We have exciting wines and great characters in the bottle and around the winery, so let’s showcase it. We need to get the spring back in our step.” Leadership and fraternity are essential if the Australian wine industry is to pull through the coming years in good shape, Hill Smith concludes.
30 The Australian & New Zealand Grapegrower & Winemaker
a drop in the UK ranking,” he adds. Massey names Chile, Argentina and South Africa as the producers most likely to cut into Australia’s global market share in 2013, along with more obscure Europeans. He also thinks New Zealand will continue to enjoy success with its Sauvignon Blanc. He backs this same variety to continue to deliver the greatest volume sales growth for Australian producers. “In addition, lower-alcohol, sweeter varieties such as Moscato and Dolcetto will continue to grow, but from a lower base,” he adds. Less refreshing is the prospect of a volumetric tax on alcohol, which Massey sees as the biggest challenge to the Australian wine industry this year. “It’ll push the price of wine up and challenge everyone from grower through to consumer,” he warns. “With the cost of living increasing, some people in our community may no longer be able to afford a good bottle or glass of wine within their budget.”
Roland Wahlquist admits that being a wine producer is a pretty tough business right now. But far from sitting tight and hoping it will pass, it’s been a year of restless change for the Brown Brothers chief executive. Wahlquist says he’s been investing to bring about efficiencies throughout the system. The changes extend from the vineyard to the winery and beyond: a new Klima machine to cut costs in cool climate cane-pruned sites; a crossflow filter to reduce labour and preserve wine quality through the final stages of preparation; a new labeller to speed up packaging. The upgrades extend into the sales arena, with an iPad-based system of information and data capture. Then, of course, there’s the wine. “We’ve relaunched our Devil’s Corner label, and have a very strong line at $20 and under. The response to them has been good from trade and media,” says Wahlquist. The company has been pushing Prosecco hard, and Wahlquist thinks 2013 could be a good year for the wine, which still only accounts for 1% of the April 2013 – Issue 591
Top domestic sparkling category. The other variety he’s tipping to shine is Pinot Noir. “We think it’s growing very strongly. We’re able to make a very good Pinot Noir at the $20 price point thanks to our Tasmanian operation,” he adds. Wahlquist thinks Australia can expect plenty more stiff competition from New Zealand as it broadens its offering beyond Sauvignon Blanc and makes inroads with Pinot Gris and Pinot Noir. In export markets, Wahlquist thinks Spain and Italy are the names to look out for. Brown Brothers currently lists New Zealand as its number one export market, followed by the UK, Europe, China and Singapore. But Wahlquist expects a reshuffle soon. “China and Singapore are the ones getting the growth and I think they’ll go up through those rankings.” Brown Brothers has been bottling offshore and chasing efficiencies in its export set-up in response to the strong Australian dollar, but conditions remain tough nonetheless, says Wahlquist. At home, he says ongoing retail consolidation is a fact of life that 2 7 5 9 S l u g Ou t _ Gr a p e s G. p producers need to plan for.
“We need to work more closely with both the majors and the independents. We need to give them a more differentiated offer,” he says. Brown Brother has invested a lot in online communication and social media but Wahlquist sees this as serving a market, rather than a direct sales, function. “A lot of the online space is dominated by clearance houses and it’s not easy to make money. People go online to buy cheap wine, not good wine,” he says. Wahlquist insists that companies that adapt to difficult realities and take a long-term view will continue to succeed. “Our biggest challenge is not to get too caught up in the doom and gloom, because there are opportunities for high quality wine that has a point of difference,” he says. “Consumers are still prepared to pay for what they see as value – I think the sales of Champagne we’re seeing demonstrate that.”
1 5 / 0 2 / 1 3 ,
Tahbilk Wine Club celebrates its 20th birthday this year. It accounts for 65% of sales of Tahbilk Estate wine and is still growing. “As a business model, it’s a good one,” says Alister Purbrick. And it needs to be, given the challenges in the broader domestic market. “The two chains (Woolworths and Coles) will continue to grow, there will be more buyer’s-own or exclusive brands taking away shelf space or adding competition for promotional slots, plus we’ll see imports grow as long as the Australian dollar remains high. These three elements make it a fairly demanding and difficult environment to be operating in,” says the chief executive of Tahbilk. Purbrick says it’s impossible to escape 1 0 : 4 0 : 4 6 AM the foreign exchange impact, which has
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The Australian & New Zealand Grapegrower & Winemaker 31
20Australian wine companies also squeezed margins for some of the group’s export-oriented brands. “We’re in a holding pattern with our exported wine and are not vigorously chasing increased sales. We’ll stay in the game on the basis that everything is cyclical and the Australian dollar will weaken in the future,” he adds. The Tahbilk Group, which is home to the Four Sisters and McPherson labels, exports 40% of its production. The UK, Sweden, Canada, the US and China make up Tahbilk’s top five export markets. Purbrick thinks those same countries will still be in the mix in two to three years’ time, albeit with China growing in prominence. Sweden and Canada have also held up particularly well lately. “Buyers from those monopolies are
taking a more sympathetic view on margins,” he says. At the moment, all of the wine the group exports is packaged in this country, a situation Purbrick doesn’t envisage changing. “We strongly believe that if it’s Australian wine it should be bottled in Australia.” Purbrick, who also chairs the Great Australian Shiraz Challenge, continues to see reasons to champion this variety, which he believes will outstrip other varieties in terms of overall growth this year. “It’s still doing well on the domestic markets and is seen overseas, particularly in emerging markets like China, as being synonymous with Australia.” He also has high hopes for sparkling wine. “Moscato and Prosecco are doing well.”
We were in Asia early, and got established there with very good distributors.
Fifth-generation Barossa vigneron Grant Burge is proud of his wines and proud of his sales team. He’s also proud of the way the company has overcome everything thrown at it over the past six years: drought, floods, financial crisis, soaring dollar. Sales are growing, with well over half a million cases shifted last year. “It’s still tough, but we’re going exceptionally well,” says Burge. And when he says tough, he means it. Burge grows 60% of his own fruit, and he’s now looking at another vintage of “incredibly low yields”. Then there are the headwinds faced by producers across Australia. “Manufacturing is incredibly impacted by the high Australian dollar; it’s a huge burden from the export point of view,” he says. “We’ve got oversupply and I think we still will have for years to come. There are a lot of desperate people undercutting others in Australia. There is also a situation of a small number of retailers dominating the market. It’s great for the consumer, but for producers it makes life very hard.” Burge has risen to these challenges in various ways. He’s pleased with the progress of his distribution company, Vignerons Of The World, whose New Zealand brand, Drift, is alone notching up domestic sales of 40,000 cases. The Australian market now accounts
Purbrick also thinks Wine Australia is doing well, albeit with limited funds. He says the A+ strategy is a good one, and the clear marketing of regional and flagship wines with a sense of place is imperative if the Industry is to have sustainable success overseas. “If we’re going to grow as an industry, it’s going to be built around export sales,” he says. “The Tahbilk Group battened down the hatches after the financial crisis and implemented cost-cutting measures and, even now, we’re still fine-tuning our cost base. But cost-cutting can only take you so far. The future has got to be about finding margin or replacing margin – and that gets you back to what I was saying about regional and flagship wines.”
Grant Burge. for 73% of sales for Grant Burge Wines, up from 60% around seven years ago. He’s working hard to strengthen exports, with talks ongoing with the US, a market that has never lived up to its promise. Asia has been far more fruitful, with China now Burge’s biggest overseas customer. Japan and Malaysia are also in the top five. “We were in Asia early, and got established there with very good distributors. We were able to get a foothold and are going strong.” Burge has also been busy adapting his vineyard for the future. Company sales and broader research tell him that Shiraz is going to keep doing well at home and around the globe. To this end, 80% of the 80 hectares of new plantings he’s undertaken in the last two years are given over to Australia’s signature black grape. A bit of Cabernet and Merlot has also gone in, some of that at the expense of out-of-favour Semillon. Meanwhile, Pinot Gris and White Frontignac have been planted in the hills. Burge identifies Nebbiolo as one to watch, while Tempranillo has already earned its stripes. “We earmarked it 10 years ago as something that should go well in the Barossa. We’ve been planting in the high areas and the valley floor, and we think it’s got a real future,” he says.
32 The Australian & New Zealand Grapegrower & Winemaker
So what of the future for Grant Burge Wines and Australian wine in general? “Australia should never have gone in at the low end of the market,” he says. “From my personal position, we’re a medium- to high-priced producer, and we have to sell wine at good prices and give the consumers what they want. There are markets, we’ve just got to work harder to find them.” April 2013 – Issue 591
Bill Moularadellis calls Shiraz his workhorse grape, and he expects it to keep carrying the hopes of Australian producers. “Internationally Shiraz continues to be seen as the signature variety for Australia and it continues to resonate with retailers and consumers,” he says. Shiraz will make up one third of the roughly 100,000 tonnes crushed at the Kingston Estate winery in 2013, with Chardonnay accounting for another third and the balance made up by assorted varieties. “Chardonnay, Cabernet and Merlot are more exposed to international supply,” says Moularadellis. “There are pockets of opportunity for lesser-known varieties such as Petit Verdot and Pinot Gris, but these are off a low base.” Moularadellis has put his money
where his mouth is with Shiraz, buying a new vineyard in Coonawarra which also grows the customary Cabernet Sauvignon. Otherwise, spending has largely been confined to measures aimed at longer-term savings, notably energy efficiency at the Riverland winery. “It’s a question of ‘steady as she goes’ with us,” says Moularadellis. “We expect margins to continue to contract as a function of costs and the exchange rate.” Those issues have prompted Kingston Estate to renounce its preference to bottle at source. About 95% of production is exported and the company is taking “every opportunity to bottle closest to our customers”. Kingston Estate’s biggest export markets are the EU, the UK, North America and Asia, with the latter improving markedly, “but still off a relatively low base”. Moularadellis sees
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www.gwrdc.com.au April 2013 – Issue 591
The Australian & New Zealand Grapegrower & Winemaker 33
20Australian wine companies South African white wines and Chilean reds as the key threats to Australia’s global market share. “They both have a duty advantage in the EU and Chile also has a tariff advantage into China. That’s something Australia really needs to be proactive with, in order to level the playing field.” The words of caution don’t stop there. Moularadellis says the strong Australian dollar has put the trade environment on “a very fragile footing”. He says the “crisis of profitability” has had
an impact on asset values and is also concerned about the slow rate of asset reconstruction in the industry. But he reserves his strongest warning for the subject of tax reform. “We need to limit the WET rebate to packaged wine. Rebates on bulk wine are unnecessary, are being widely abused and are a significant distortion to the market. I’d like to see us limit WET rebates to eligible retailers with turnovers of less than $10m and to bona fide producers. This will provide a significant benefit to
Angove Family Winemakers John Angove is pinning big hopes on small parcels. That’s why he’s excited about his microwinery development. It’ll handle anything from one to eight tonnes of fruit. It’s been designed with McLaren Vale in mind, as Angove plots a way to bring fine examples of the region’s Shiraz, Grenache, Cabernet, Merlot, Fiano and Vermentino to the world’s attention. “We need to develop our processes for those smaller parcels and we will make far better wine. It’s a part of the business that we haven’t been involved with and we need to be.” Organic viticulture is another area of interest. Angove needs to see further signs of sustainable growth in organic wine if he’s going to stick with it in the long term. But for now his line is going well and this year he processed his first organic Sauvignon Blanc. This is one grape variety Angove expects to keep going down well with consumers, along with Moscato and, he adds hopefully, Chardonnay. He notes a growing interest in what the Americans call three-red blends, but tips Shiraz to keep its dominant status. “There’s a bit of a change afoot in style, moving from the super-ripe fruit bombs back to a wine that has a little more finesse about it, which I think is a good thing,” he says. Angove’s microwinery dabbling brings together two key areas of focus: product mix and higher-margin wine. “Margins are continuing to be squeezed both internationally and domestically. We want to improve the product and get away from the bottom end, where the margins are least and the squeeze is greatest,” he says.
Peter Lehmann Wines
From a domestic perspective, Angove says consolidation is making life difficult but producers have to work with retailers as best they can. He also recognises the need to be part of “the online scene” and to work as hard as possible at selling through this channel. As for exports, the high dollar is making life tough, but this is somewhat offset on the distribution side of Angove’s business, where imported agency products have become more competitive. Halfway through the last decade, Angove was exporting more than 45% of production. Now that stands at between 20% and 25% − around two-thirds of that shipped in bulk. His top five overseas customers are the US, the UK, New Zealand, China and Denmark. “China will continue to grow and could come up a rung if we keep working at it, but it’s got a fair way to go to catch up with the US or UK,” says Angove. He adds that the majority of China sales are “opportunistic” – buyer’s-own brands and the like – and the battle to make corporate-branded business the lion’s share is “a long, hard slog”. But an even tougher battle for Angove and the Australian wine industry is being waged on home turf. “The anti-alcohol lobby is one of the biggest challenges that we have to tackle,” says Angove. “They’re coming out with some feed for the media and it’s becoming a very distorted argument. The problem is that the industry doesn’t have the buckets of money the anti-alcohol lobby has from the government to try to balance the scales and get what I believe is a more accurate message out there.”
34 The Australian & New Zealand Grapegrower & Winemaker
independent retailers, restaurateurs and niche online operators who do not have the market power of the large retailers. This benefit will directly flow to smaller wine producers who’ve been locked out of the retail trade by the consolidation of the last decade. “Finally, we need to promote a united wine industry voice against a volumetric tax and encourage the two dissident producers who support this tax to put the whole of the industry’s interest above their own.”
Peter Lehmann Wines has pulled off something of a balancing act, with tumultuous change on the one hand and admirable consistency on the other. But chief executive Jeff Bond knows the business – and the Australian wine industry – is still walking a fine line. The Ta nu nda-based compa ny achieved 13% volume growth – 6% by value – over 2011-12. And during that time it underwent an overhaul. Domestically, it tweaked its portfolio to offer channel-exclusive ranges and target a sales boost in the $18-25 price bracket. It parted company with longterm distributor Samuel Smith & Son, opting instead to deal directly with the retail chains and bring in Four Seasons Fine Wines to handle on- and off-trade sales to independents. In the UK, it exited a joint venture and appointed a new distributor, while the US saw the introduction of a new portfolio of wines. Bond views these changes as a logical response to underlying changes in the market. The move to rebalance away from exports, which now account for 55% of the business as opposed to 70% two years ago, was required – albeit somewhat overtaken by circumstance – to mitigate foreign exchange risk. Bond also saw that the need to develop a dynamic and profitable domestic model also applied to key overseas markets, such as the UK. The company launched new lines, such as the independent-only Hill & Valley label, which sits in the targeted $18-25 price range. It restructured brands into more clearly defined tiers, tied together with fresh packaging. It shifted its mix to appeal to more April 2013 – Issue 591
20 youthful consumers and achieve a better balance between men and women. Significantly, it decided to withdraw from the value end of the market, which Bond calls “a zero-sum game”. “In the UK we no longer rely so heavily on entry level wines there – what are now for us £9-12 wines,” he adds. “We’ve completely changed our approach and we’re growing our profitability and our top line. It’s a more sustainable model; we’re selling less and making more money.” While making these changes, Peter Lehmann Wines remains in many senses deeply traditional. Its key export markets
are the US, Canada, UK, Switzerland, Germany and Sweden, and Bond points to the tenure of Andrew Wigan, who’s been making wine for the company since it started in 1979. “We have the authenticity, the provenance, the quality, the story,” says Bond. “We deliver consistency to the market because we’ve had the same team in position for a long time. We shouldn’t sell ourselves short.” The company hasn’t had it all its way. Some lengthy contract winemaking relationships have come to an end, and
Bond says he’s working hard to strike up new ones. And lower yields in the Barossa this year meant more spare capacity at the 15,000-plus tonne winery. Bond says the currency remains the biggest challenge. “It’s killing the industry. We’re looking at the next three to five years and how to evolve a strategy for a long-term high dollar. We’ve established great markets but if you lose shelf space in a country like the US, it’s going to be very hard to get it back. But we’ve been through painful times like this previously, and I’m sure we’ll come out on top again.”
Qualia Wine Services
The numbers tell a story at Qualia Wine Services. A couple of years ago, the Mildura-based company was exporting 80% of production. That’s dropped back to parity with domestic sales. When overseas shipments were at their peak, just 20% were sent in bulk. Now that, too, stands at 50% − and may continue to climb. “The high Australian dollar has had a major impact, in particular in the UK,” says John Pezzaniti, executive director and winemaker at the Mildura-based company. “Our costs will continue to go up and that makes things hard when you’re competing with Chile and South Africa. There needs to be more realistic pricing, for sure, but whether we can achieve it will be another matter.” Qualia counts the UK, Europe and China as its bestperforming export markets. China now accounts for roughly a third of export sales. “We’ve been in China for six to seven years now, but it’s not as straightforward as most people think,” says Pezzaniti. “It’s a hard market in which to build long-term relationships, but we’re growing quite well now.” As with many of his peers, “efficiency” is a word that crops up often when speaking to Pezzaniti. To this end, he and the team put in winery infrastructure and upped capacity this year. The move allowed the winery to shorten its vintage from the almost 12-week marathon in 2012 to less than seven weeks. At the same time, the crush increased from 41,000 tonnes to closer to 50,000. Pezzaniti, who worked his 18th vintage in 2013, thinks Shiraz will be the main volume driver for Australian wine.
maintaining market share against global competitors. It sounds like a tall order, but Pezzaniti appears comfortable with his end of the deal. “We’re in a reasonable position because we’re a private company. Our costs are more restrained, we’ll continue to be efficient and it’s important to be sustainable. And still make good wine.”
The high Australian dollar has had a major impact, in particular in the UK. John Pezzaniti Executive director Qualia Wine Services “It’s been tight the last few years because of the vintages we’ve had. We’re certainly finding Shiraz is our biggest seller. There’s also a bit of interest in Fiano from people looking for something different from Australia, but it’s early stages.” Pezzaniti says the biggest challenge facing Australia is keeping its suppliers and grower base viable while remaining sustainable with all industry stakeholders – and all that while April 2013 – Issue 591
The Australian & New Zealand Grapegrower & Winemaker 35
20Australian wine companies
Littore Family Wines
“At our end of the market a lot of romance has gone out of it. Wine isn’t the brand-led poster boy of the agricultural industry. We’re a commodity product.” That’s Vince Littore’s blunt assessment. The managing director of Littore Family Wines has no doubt that the quality is still there and is recognised across the world. The Geelong-based business is shipping the same volume of wine, but Littore says the high Australian dollar is destroying margins and changing the face of the industry. The exchange rate has accelerated the push for private label overseas, says Littore, while retail consolidation leaves producers with no option but to surrender and go with it, or else lose sales. “We’re just trying to become more efficient, that’s the way we’re trying to maintain margins. You’ve got to try to operate as lean as you can,” he says. Over the past year, that’s entailed some streamlining in terms of uppermanagement winemaking roles. It’s also meant a continuing shift towards bulk shipments. “You’ve got to bottle offshore to get on the shelf,” says Littore, who doesn’t expect the trend to reverse. “It’s not the value-add that you get and the margin you get when you ship in bottle. Four years ago we would’ve been 100% bottled in Australia. Now we’re about 30% in Australia and the rest overseas.” Littore Family Wines has worked hard to develop solid market share in Russia and Japan. It’s paid off, with those two countries remaining its best customers. China, Germany and Poland round out the top five export markets. “China is the key one but that’s a pretty tough gig,” says Littore. “Growth in China is very much at the premium end, and trying to establish a brand there is extremely difficult.” Littore – whose Moorabool Valley winery crushed around 15,000 tonnes this vintage, with another five or so tonnes crushed off-site – sees South Africa as the nation most likely to eat into Australia’s global market share. “They got a pretty big crop this year, plus a bit of a currency advantage,” he says. “They’re a bit more efficient than us in terms of labour costs and they’re doing the commodity, bulk-type wines pretty well, like we do.”
And Littore is determined to keep doing them well, at the right price and quality level. “We see our operation as having to hit a scale and level of efficiency where we can compete on a worldwide market.”
Tyrrell’s Vineyards Yields in 2013 were down almost 30% on a normal year for Tyrrell’s, thanks to the near absence of rain from July to Christmas. But then again, the 13 inches of rain that fell in 50 hours during vintage had little adverse impact. “We dodged a lot of bullets with the weather,” is Bruce Tyrrell’s conclusion. That kind of glass-half-full thinking characterises his industry outlook. But there’s clearly more to the company’s success than dodging bullets. Overseas sales are a case in point. Where many have seen exports shrink relative to domestic sales, Tyrrell’s have increased to 20% over the past four years. China is the number one customer and Asia accounts for two-thirds of all exports. “A while ago we made the decision that the future lay in Asia,” says Tyrrell. “We reckoned it was safer to do business with countries with similar interest rates to ours.” The US, the number two market six years ago, no longer features in the top 10. The UK is still hanging on at number five, but significantly, Tyrrell took the decision to double prices there in order to maintain his position. He’s also taking a firm stand on the issue of bulk shipments. “It’s not the market we’re in. If it’s going to have our name and our label on it, we want to be in charge of bottling,” he says. Unsurprisingly, Tyrrell is matter-of-fact about the domestic retail environment. “Consolidation is happening all over the world, and it’s not going to go away. The market is the market, and you’ve got to work with it by finding new ways of selling that have more margin.” On this point, Tyrrell points to the example of the farmers’ market, where people are happy to pay more for what they think it a better product. He’s also a big believer in cellar door and wine club. “We do well over a million cellar door tastings a year,” he says.
36 The Australian & New Zealand Grapegrower & Winemaker
“The number one reason people buy a bottle of wine is that they’ve tried it before and they like it. Both over the counter and direct to consumer sales continue to grow for us.” Tyrrell’s is scoring particular success with the kind of regional and flagship wines that producers are told they should focus on. The trademark Semillon, especially at $18-plus, is selling well, and the single-vineyard Hunter wines have been walking out the door over the past four years. It’s also “putting the pedal to the metal” on the popular Rufus Stone Heathcote Shiraz, which it wasn’t able to make in 2011. It’d love to do likewise with Hunter Shiraz. “Unfortunately it’s a finite resource; there’s not a lot of good Shiraz country here. What there is, is fantastic but it’d be nice to have a bit more.” Tyrrell’s was made “an offer we couldn’t refuse” for the family’s Glenbawn winery in the Upper Hunter last year. The extra production facility that’s come back to the main winery should provide some welcome efficiency. Because make no mistake: “Things are bloody tough. It’s hard trying to manage a falling market and the ability to read the market going forward has become much, much more difficult.” But the most pressing challenge facing the Australian wine industry lies in the social, rather than economic, sphere. “The anti-alcohol movement wants to wipe out our businesses completely, and that’s our biggest fight,” warns Tyrrell. “There’s nothing more dangerous than a zealot.”
Wingara Wine Group
Tough trading conditions have done little to dampen Diego Jimenez’s enthusiasm for Australia. “I’m very happy,” says the man now in his sixth year as Wingara Wine Group chief executive. “This is a great country, the wine industry is very dynamic and has some of the best wines in the world. There’s an adventurous spirit among consumers.” Another benefit of Australia is its strong reputation in Asia, says Jimenez. The problem is that Aussies might be too easygoing to take advantage of it. April 2013 – Issue 591
20 Diego Jimenez.
“Asia likes luxury and Australia is down to earth. That’s great, but if you want to sell a $40 bottle of wine, you have to remember that is luxury. It’s about how we sell it, the whole experience and not just the liquid in the bottle.” Asia is in the ascendant for Wingara, the company behind Katnook and Deakin Estate. Its current line-up of export markets places Canada at number one, followed by China, the UK, Singapore and Hong Kong. “Changes to those rankings may happen very soon,” says Jimenez. “I see China growing to first position by both volume and profit, and Singapore and Hong Kong passing Canada and the UK, perhaps not by volume, but by profitability.” Exports are now on a par with domestic sales, shrinking back from a 60:40 ratio a couple of years back. Jimenez thinks they may have stabilised, after a couple of changes to its overseas distributors and a move to ship some wine in bulk to Spain for bottling (though this is never the case with Wingara’s main brands). Margins have narrowed over the past year thanks to the strong dollar, and Jimenez bemoans both this and Australia’s lack of free trade agreements as he identifies Chile as a key competitive threat. “The Chileans are similar in winemaking capabilities, they react fast to consumer preferences, they have a consumer-oriented marketing mind and their government is more proactive in trying to hold exchange rates,” he says. Wingara is no slouch when it comes to reacting to consumer preferences, as the success of its Founder’s Block range shows. Introduced domestically in 2006, two years after its export launch, the range may soon feature a Coonawarra Pinot Noir. April 2013 – Issue 591
It’s a variety Jimenez has earmarked for strong growth this year. He thinks Shiraz will enjoy the best sales growth on absolute volume for Australian reds. “We’re seeing great interest in Coonawarra for Shiraz. Consumers are seeing the potential for less alcoholic, more elegant styles. At Deakin, goodquality shiraz is a priority for next year,” he says. As for whites, he sees Sauvignon Blanc and Pinot Gris staying popular, but also expects a revival for $20-plus Chardonnay. He may be happy in Australia, but Jimenez is acutely aware of the headwinds. “Coles and Woolworths are under pressure to make more profit every year and if you’re not a brand in demand, why would they buy you? You have to offer brands that are attractive to them while maintaining margins, and that’s not easy,” he says. “The biggest challenge we face domestically is the competitiveness of the industry in general, where the biggest retailer also owns brands and where there are more and more brands sold into restaurants.”
It’s less than eight years since Bob Berton moved into the 17,000-tonne capacity winery in Griffith. That period won’t be remembered as the halcyon days of the Australian wine industry, but the company has nonetheless been able to make calm progress. Over the past year Berton Vineyards been busy expanding its storage base, adding four million litres of capacity. It’s also constantly looking at ways to streamline the winemaking processes. And Berton is on the hunt for more Shiraz. He says overall demand is evenly split between red and white wine. The local growers are skewed 60:40 white to black grapes, with Semillon and Chardonnay dominating. He has a soft spot for the latter – “a fundamentally wonderful variety that should work but gets taken for granted” – but thinks Shiraz will be this year’s winner in terms of absolute sales growth. Another variety that’s got him excited is Vermentino. “We’ve done really well with it. It’s got www.winebiz.com.au
lovely acidity, ripens early and is a great variety to grow here.” Just four years ago, Berton Vineyards was selling 75% of production overseas. The high Australian dollar caused the business to “turn inwards” towards domestic sales, which have now drawn level with exports. It’s tough, but there’s no point simply trying to survive, he says. Winemakers have to learn to do good business under a dollar that won’t go down. Berton’s strongest export markets are the UK, Europe, the US and New Zealand. “But definitely China and places like Malaysia, Thailand and Vietnam are where the growth is,” he adds. “It takes a bit of patience to understand how to go into Asia. China is the shining light and we’re looking at it as being the panacea. I don’t think it’s the panacea but it certainly gives us hope for the future.”
I think the sleeping giant is Spain. Bob Berton Berton Vineyards As Berton and his fellow Australians try to elbow their way into those international markets, many think of Chile and Argentina as the main competitors. But Berton thinks they’re forgetting an Old World adversary. “I think the sleeping giant is Spain. Spain makes big, rich wines like we do,” he says. “They have the capacity to produce, they’ve got the land area and the vines in the ground.” Domestically, Berton sees the consolidation of retail as a formidable challenge. “It restricts access to market for a company that’s young like ours,” he says. “It’s a different matter for the established companies who have their brand strength to rely on, so I think it has made us complacent as an industry. We’re used to having enough stores, and now we’re confronted by a handful of buyers who control 80% of the market. I think competition is essential in driving our industry forward.” Berton likes the idea of the internet as a link between winery and consumer and views e-commerce as a vital alternative route to market, albeit one he is yet to take full advantage of. “What we’re good at is making wine. Now we’ve got to learn how to market ourselves,” he says. “We’re in a reasonable place. And at the end of the day, if we get through this we can get through anything.”
The Australian & New Zealand Grapegrower & Winemaker 37
5 New Zealand wine companies
Top 5 NZ wine companies 1 2 3 4 5
Pernod Ricard Lion Delegat’s Wine Estate Constellation New Zealand Villa Maria
NEW ZEALAND’S WINE industry is in a very positive mood right now, with the 2013 vintage season progressing well. If the enthusiastic Kiwis are correct, this will be a year to remember and a
major boost to the nation’s energetic and highly successful exports. Mother Nature is not always so kind to our trans-Tasman cousins, so the glorious, dry weather experienced in the lead-up to vintage has been greatly appreciated across the country. New Zealand is famous for wines with astonishing levels of fruit intensity and this vintage will definitely be one to watch. Recent memories of oversupply seem to have faded a little, with a belief that the industry has found a point of balance and is strongly positioned to take its next step in producing innovative wines of
outstanding quality that the world will queue to buy. In the following articles, we explore the key issues the Top 5 NZ wine companies have faced during the past 12 months and reveal their expectations for the future. Unfortunately, we are unable to bring you all Top 5 responses, with Delegat’s declining to participate. Thanks to Bob Campbell MW (a valued member of our editorial panel) for drafting the questions that were presented to the Top 5. Grahame Whyte, editor
New Zealand looks on the bright side Grahame Whyte
OPTIMISM IS NEVER far from the surface when it comes to Kiwis and wine. And, despite the challenges that have been thrown at the industry during the past several years, the CEO of New Zealand Winegrowers, Philip Gregan, reckons things are on the up. “The 2012 vintage was just fantastic, which was really great news for us,” Gregan said. “Even more than that, we saw change in the supply/demand balance in the industry. We had been making progress in terms of growing sales but the small 2012 vintage really speeded up the change dynamic that was building out there – it really reinforced it,” he said. “The small vintage shortened supply and when there’s short supply, wineries get back to core business − and core business is the sale of branded products for most of them. “The only unwanted thing was the continuing strength of the New Zealand dollar. I don’t know that it was unexpected – we just hoped it would go the other way, but it didn’t. “Since 2008-09 the industry’s been through a fairly tough period. Through that time we have continued to grow our branded export sales quite strongly and I think there is a growing sense that the industry once again is back in control of its own destiny and it’s looking quite positively to the future. “Domestically, we are pleased to record that we are losing some market share. With a market share over 70%, that tells us we tend to be oversupplied and wine is being sold at a cost or maybe even below cost in the domestic market, but we’re heading back towards somewhere between 50% and 55% domestic market share – and that’s about the place we
should be in terms of our costing. “We just can’t sell profitably in the domestic market at less than $10 or $11 a bottle – why do it?” Gregan said exports were performing much as we expected. By June year-end, packaged exports were expected to be up about 5%, while bulk exports were expected to be down about 30%, pretty much as anticipated. There was a shift taking place to branded winery-owned products, away from supplying global retailers with bulk wine. “We’re right in the middle of vintage at the moment. We’ve got pretty severe drought in a New Zealand context over here, so we’re looking for a very good, very high quality vintage,” he said. “We are expecting the crop to be up on last year but it’s going to be a moderate crop. “We would like to think that we can see some rebuild of inventory out of the vintage – inventories have to be at record low levels; there’s just no wine out there, so we need to do some rebuilding of inventory and we would like to see continuing growth in export markets and we need to see some lift in prices for our packaged exports, which is difficult given the high dollar.” On the positive side, demand is continuing to grow. There are very strong market signals out of all of New Zealand’s major growth markets: the US, Canada, China and European countries. NZ can continue to perform very well in its target segments in Australia and the UK. Demand continues to be strong for the core variety of Sauvignon Blanc, plus Pinot Noir and Pinot Gris and other varieties as well. “The industry tries to do a good job and some of our companies are very
38 The Australian & New Zealand Grapegrower & Winemaker
successful at marketing,” Gregan said. “We’d like to think that we are operating to world-best standards but we would never claim to be the best. “For us, we are never going to be cheap, so we’ve got to be very good in terms of quality and our marketing has to be up with that in terms of touching the consumer, in meeting the expectations of consumers and delivering to them what they want. “I think there is a growing sense of optimism among growers and winemakers. The growers got hit last year by a combination of low prices and low yields, but this year we are looking at price increases and improved yields, so in general terms the growers should have a much better year. “Wineries are thinking very positively about export markets, but the big thing that plays into their minds is the exchange rate and their ability to force through price increases. “In general terms people are pretty positive about where things are going. “Sauvignon Blanc continues to grow. Demand continues to be strong in most key development markets like the US and Canada. New Zealand wine is performing very, very strongly at the moment – and the key to that is Sauvignon Blanc. “It’s very distinctive and I think we’re lucky with Marlborough, in terms of the pretty consistent weather Marlborough gets. Yes, there is vintage variation obviously, but year on year it seems to deliver a pretty outstanding product – so that’s a huge advantage for us. “We’ve just had a very successful Pinot Noir 2013 conference over here and I think the wines really wowed the trade and media that we had present.”
April 2013 – Issue 591
T he price and profitability of Marlborough Sauvignon Blanc has dropped significantly since the grape surplus in 2008, significantly reducing the average price of NZ wine in key markets such as the UK and US. Do you think previous average price levels will be regained and if so, when?
Pernod Ricard’s managing director Fabian Partigliani: I’m optimistic − I have been looking at the underlying performance of branded wine versus bulk wine. I think the good news is that branded wine is still continuing to grow, albeit with some price erosion. If all the growth had come from bulk it would have been very difficult for the industry as a whole, as branded wine maintains a premium price versus private label, so that’s good news for us as a provider of branded wines. Will the average prices for Marlborough Sauvignon Blanc increase and how long it will take is a difficult thing to predict. I’m positive that wine brands that are investing behind marketing, innovation
and maintaining quality will get the returns reflected in their price points. It’s just a question of timing. I do believe you can’t just rely on the ‘good old days’ to return, without putting investment behind your brands. Consumers are going to say, is it worth paying more per bottle, and you need to reassure them with the credentials of a brand backed up by a quality product and innovation – to offer a point of difference. Lion’s managing director Rory Glass: I think there will be price appreciation witnessed over the coming years simply because in the face of ongoing exchange rate headwinds, strong consumer demand and structural supply challenges, the status quo is unsustainable. Constellation’s CEO Joe Stanton: The law of supply and demand would suggest that, as the grape surplus has gone and the industry is most likely entering a period in which it cannot meet demand, prices most likely will rise over time. However, competition between wine companies in the same market, retailer price expectations and the price the
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April 2013 – Issue 591
The Australian & New Zealand Grapegrower & Winemaker 39
5 New Zealand wine companies
consumer is prepared to pay all have an impact. Overall, however, I expect prices to slowly recover as sales of unbranded bulk are converted to sales of branded product to meet growing demand. Villa Maria’s managing director Sir George Fistonich: The strength of the New Zealand dollar against the pound is currently at an unsustainable level and Villa Maria has put a price increase in effect in some of our markets as a result. The grape surplus created a situation where cheap virtual brands have had a detrimental effect on the total NZ wine industry, as quite often the wines come from overcropped vines with low quality fruit. Villa Maria is in a fortunate position that with the exception of the huge ‘08 vintage where virtually every winery had to sell bulk surplus wine to prepare for the next vintage, all of our wines are sold under Villa Maria Group brands. We sell our entire product under our own established company labels.
NZ’s top five varieties according to the 2012 vineyard survey are Sauvignon Blanc (19,928ha), Pinot Noir (5096), Chardonnay (3120), Pinot Gris (2306) and Merlot (1195). What’s your predicted ranking of the top five varieties in 10 years’ time?
Pernod Ricard’s Fabian Partigliani: I would say we would probably not see a great deal of change in New Zealand’s top five varieties in the next 10 years –
we’re almost at full production capacity, so whatever change occurs will be costly and therefore occur slowly. To replant a vineyard with a new varietal does force you to think very long and hard about what you’re doing. There may be a little shift towards Pinot Gris as it’s starting to show some good signs and I think Chardonnay will remain a solid varietal as well. The signature variety of Sauvignon Blanc will drive the remaining growth. We believe Sauvignon Gris as a new varietal will enter the top 10. An ancient Bordeaux varietal, it was actually bigger than Sauvignon Blanc pre-phylloxera in France in the late 19th century. They replanted mostly Sauvignon Blanc because it yields slightly higher than Sauvignon Gris. We have been playing around with it the last 10 years and believe it offers a really unique point of difference for New Zealand. It’s got all the flavour and aroma of Sauvignon Blanc but it’s got the palate weight of Pinot Gris, it’s also not a blend but a standalone variety in its own right. A nice winemaking story and we’re excited about it as it offers something different and plays on our strengths, which is that we are a country famous for Sauvignon Blanc. I think Pinot Noir will continue to evolve positively. I am pleased that we have a significant area in New Zealand dedicated to Pinot Noir because it is our second signature variety, but I do think the evolution will be more measured and careful because it’s at a higher price point and a more challenging varietal to work with.
Lion’s Rory Glass: Assuming plantings and vineyard production follow consumer demand over the long term, we can expect Sauvignon Blanc to remain dominant. I think we are also likely to see Pinot Noir and Pinot Gris ascend to number two and three in the rankings in the years to come. Correspondingly, on the back of dwindling consumer appeal, the contraction of Chardonnay is likely to continue. Constellation’s Joe Stanton: I do not expect the ranking to change. Sauvignon Blanc is the dominant variety and due to its unique proposition will continue to underpin the industry. Following Sauvignon Blanc, Pinot Noir and Pinot Gris will probably show the most growth. Bordeaux reds are unlikely to show significant growth but Syrah might surprise. Villa Maria’s Sir George Fistonich: There appears to be an underlying return to Chardonnay which I believe is because New Zealand Chardonnay’s use less oak and are more fruit-driven, making them more acceptable to new consumers. However, in general I don’t believe there will be a great deal of change to this ranking in the next 10 years. I would add though that due to New Zealand’s maritime climate we make great Riesling and there is a ground swell of interest for the drier styles. There is an appetite for experimenting with new varieties such as Arneis, Gruner Veltliner and Alberino but growth of these is still
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April 2013 – Issue 591
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New Zealand overview from Fabian Partigliani, Pernod Ricard I’m a big supporter of New Zealand wine and I really think the dynamics for the New Zealand wine industry are strong. We are a small country, we’re always going to be challenged in terms of weather and our ability to play a scale game, and therefore we need to produce premium wines that focus on quality and add value to consumers. We are also a united industry. We have created a point of difference with our Sauvignon Blanc and Pinot Noir, so I think all the ingredients are there to continue the success we’ve seen in the past 10 years. The New Zealand wine industry has been a great success story, so we get great support from both consumers at home but also from around the world. There will no doubt be some challenges along the way, but I think the fundamentals are strong for New Zealand, so I’m extremely optimistic and looking forward to the future.
in its infancy. In red varieties, New Zealand Syrah is gaining enormous popularity and prestige, however the potential is limited due to the lack of suitable land for growing it here.
There has been little new vineyard planting in NZ in the past five years. Is that likely to lead to a shortage and if so, which varieties are most at risk of being in short supply?
Pernod Ricard’s Fabian Partigliani: The good news is that the industry has been conscious and careful to make sure that the correction to supply and demand imbalance continues to take place. The best way to do that was to stop planting. We are starting to approach full production in Marlborough, which is the largest producing area, so I think we’re definitely moving into a constrained environment for the foreseeable future. There will be some vintage variation from year to year. Some vintages will be up, some vintages will be down but we welcome a tight supply situation because I think that plays to the companies that have strong brands that want to innovate both from a quality perspective and also from a brand perspective. Marlborough is likely to follow suit with Napa, Burgundy and Champagne − all regions that are famous for quality, unique wine styles and premium prices. The popularity of New Zealand wines will lead to shortages in some markets. Unlike Australia, we haven’t got the climate or the planting area to continue to increase our production, so we will be limited by nature in what we can do in terms of supply, which I’m not concerned about – Pernod Ricard New Zealand is happy to play a value game. Lion’s Rory Glass: On the proviso that Marlborough Sauvignon Blanc continues to capture the imagination of consumers in key and emerging export markets, there is a possibility that our most abundant varietal may come under real pressure. Equally as we continue to garner local and international respect for our Pinot Noir efforts, I think we may find challenges supporting the potential consumer demand for this variety as well. April 2013 – Issue 591
www.aussiefrostfans.com www.nzfrostfans.com The Australian & New Zealand Grapegrower & Winemaker 41
5 New Zealand wine companies Constellation’s Joe Stanton: There is likely to be a shortage in coming years until new planting – which has begun again – catches up with demand. Sauvignon Blanc and Pinot Noir will be most at risk of short supply and there may be issues with Chardonnay supply as well. The other key factor is not to lose sight of the fact that we are a cool climate grape producer. Crop sizes will vary depending on the climatic conditions as was seen with the 2012 harvest.
However if growers choose to overcrop, this could lead to an oversupply and a situation that would lead to lowering of wine prices. There has been virtually no vineyard planting in the last five years and in fact at least three nurseries closed down. But there has been a rapid regeneration of nursery and grafting work taking place, so we will soon be seeing a re-emergence of new plantings – the result could be a short-term delay in supply.
Sir George Fistonich.
Villa Maria’s Sir George Fistonich: This is already reflected in the 2013 vintage because of a low cropping year which has already created a shortage with many wine companies. However because of the ideal conditions and a very warm season for bud fertility in December 2012 and January 2013 we are already aware that 2014 is going to be a large harvest. It’s too early to predict whether 2014 will create a surplus or not. But it’s very important that growers manage crops to gain optimum crop levels for quality. If that’s done we should get a balanced harvest which will lead supply and sales being in balance.
ist NZ wine’s L greatest strengths
Pernod Ricard’s Fabian Partigliani: • I think the biggest strength is that we’ve created our signature varietals: Sauvignon Blanc and Pinot Noir. Both of these wine styles have captured the imagination of the world in terms of their fruit forwardness and freshness. Being able to differentiate yourself on the world stage being a small country and small winemaking producer is definitely a top point of difference for us.
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• I think the second-biggest strength is New Zealand’s image which supports our premium positioning for the New Zealand wine industry. New Zealand is seen as a sophisticated country, clean, green and beautiful, so that image supports our fresh wine style image, which I think is really important. • We are also very good at innovation as a country and that lends itself nicely to keep innovating in wine, both in terms of varietals and wine styles. • Wine quality is key. The limitations we have both by weather and geography make it hard to grow grapes in New Zealand and I think that plays nicely into our premium positioning as well. Also the fact that we can’t keep expanding production means we have to stay ruthlessly focused on quality wines and that is great from a premium pricing and value game perspective. • As an industry we’re relatively well united as we share a common vision on what we want to achieve in the wine industry. We have very good government support, as they realise that the New Zealand wine industry is a key industry, both from helping to promote a positive New Zealand brand story and as a successful export industry. Lion’s Rory Glass: • Brand NZ – perception of NZ is unparalleled when it comes to purity, natural beauty, authenticity and environment. These associations are powerful leverage points for our industry • NZ’s unique climatic and soil conditions provide NZ with an intrinsic advantage when it comes to making popular wine styles • The cohesive manner in which our industry body (NZ Winegrowers) and NZTE work together in order to support the industries efforts to grow beyond NZ is a real benefit • Industry participants are very forward looking and innovative in their approach to viticultural practices, wine styles and winemaking.
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Constellation’s Joe Stanton: • The uniqueness of Marlborough Sauvignon Blanc • Our niche producer status – producing only 2% of the world’s wine • Ability to innovate – e.g. screwcaps • Untapped export potential outside of traditional export markets such as UK and Australia • Relative lack of regulation and bureaucracy (compared with Old World wine countries). Villa Maria’s Sir George Fistonich: • Our maritime climate gives us excellent diurnal temperature differences which is excellent for producing great fruit-driven wines. • The regional diversity of our eight winegrowing regions – Auckland, Hawkes Bay, Gisborne, Martinborough, Marlborough, Nelson, Waipara and Otago. All these regions have their own great strengths and styles. • In terms of modern winemaking New Zealand is a growing county with passionate and enthusiastic winemakers and viticulturists who are imaginative and not bound by tradition. They’re in it for the love of it and that’s a very positive thing for the industry.
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The Australian & New Zealand Grapegrower & Winemaker 43
5 New Zealand wine companies
N ow list the greatest weaknesses
Pernod Ricard’s Fabian Partigliani: • Sauvignon Blanc and Pinot Noir are our signature varietals and our strengths – but the other side of that is that we are very reliant on Sauvignon Blanc and some people argue that’s a weakness. I don’t believe it’s a weakness, but it is certainly a threat if we don’t do anything to support Marlborough Sauvignon Blanc in particular. We have been innovating with Sauvignon Blanc over the last couple of years including the introduction of a sparkling Sauvignon Blanc and a late harvest Sauvignon Blanc. We’ve also recently launched our icon Marlborough Sauvignon Blanc, Brancott Estates Chosen Rows. This ageworthy wine is the result of a long-term innovation project and the feedback to date is outstanding for this new and versatile wine. As an industry as a whole, the challenge is to continue to innovate and not just stay focused on Marlborough Sauvignon Blanc and Pinot Noir. • Sometimes our size can be an issue as you don’t get the economies of scale that the larger wine-producing countries have. A lot of our wineries in New Zealand want to have their own production and their own bottling and sometimes this leads to dis-synergies. However, provided we can sustain our premium pricing it doesn’t become an issue, but we are in danger of sometimes missing opportunities and I would like to see more collaboration in the industry. • The Kiwi dollar! It does challenge our exports when the dollar is so high and that has put pressure on us but we take a long-term view of the industry and believe the economics are favourable. Certainly on a dayto-day basis the exchange rate to the Euro and US dollar in particular, does have its challenges. Lion’s Rory Glass: • The strength of our currency against major trading partners is a real challenge and will necessitate some fundamental changes to some of our practices if we as an industry are to adapt to this new reality • Through retail consolidation it is getting increasingly difficult and costly to get shelf space
• As an industry we are still too focused on what we like as opposed to what consumers/customers want • Our dependency on Sauvignon Blanc does create a risk should consumer fascination with this variety fade • NZ has structural limits that will limit how big the NZ wine industry can grow. Constellation’s Joe Stanton: • Cool climate viticulture and the associated large seasonal variations – erratic supply is always a risk and markets can be unforgiving when the tap is turned on and off • Industry fragmentation – too many players and not enough scale • Isolated location of NZ and length of supply chain – difficult to ensure quality is preserved throughout the supply chain to export markets and that tired old vintage wines are not sitting on retailer shelves. • Natural limitations on the size of the national vineyard. How will the industry continue to develop once Marlborough is fully planted? (The points above mean that NZ will always have a higher cost of production per tonne than many international competitors, highlighting the need for an absolute focus on quality). • Our niche producer status – ensuring NZ wine has a voice and retains relevance to the consumer. Villa Maria’s Sir George Fistonich: • We’re a long way from our major markets • In world terms we’re relatively small which means we don’t get the benefit of volume and therefore we have a higher cost structure. • We’re a politically stable country seen as a food bowl for the world. As such our dollar is very strong and this has serious impacts on profitability for exporters and therefore New Zealand reinvestment back into our industry. • Although Sauvignon Blanc put New Zealand wine on the world stage, we need to ensure we are not totally reliant on it. It’s important to continue to promote all the other varieties we grow successfully. • New Zealand Sauvignon Blanc’s popularity led to an influx of multinational companies buying bulk and bottling under virtual labels. These wines are often from overcropped vineyards and quite dilute. They appear under fancy labels but low prices and strength of
44 The Australian & New Zealand Grapegrower & Winemaker
distribution can mean they become the benchmark for NZ wine which can do an extreme amount of damage to the whole NZ wine story and our quality branded wines from NZ established wineries.
China is NZ’s fastest growing export market but exports are still relatively small compared to more established markets. What do you think about China’s potential?
Pernod Ricard’s Fabian Partigliani: I think China is obviously a big potential market but probably not within the next five years. I think in China we need to still find our way into unlocking the potential. The biggest potential and short to medium term opportunity remains the US and North America. Lion’s Rory Glass: On the face of it, China presents a very exciting growth avenue for NZ wine. The rise of a middle class and their growing penchant for premium brands (from trusted origins) puts our wine industry in a good position to tap into this. That said, the cultural idiosyncrasies as they relate to politics and business practices should not be underestimated. Constellation’s Joe Stanton: While China is a key market in terms of our long-term success it is arguably no more important than North America which is currently showing the same rate of growth as China. China is a long-term proposition for NZ wine, taking perhaps 10-20 years to build a solid foundation. We need to create a reason for China to want to drink NZ wine that is not based solely on price and volume, and to maintain a luxury and niche position. That will be a challenge as there will be those who seek a quick windfall from the Chinese market. Villa Maria’s Sir George Fistonich: Overall compared to established wine drinking countries, the China market is very small. However it does have great potential with a growing middle class that have the money and interest in drinking and being educated about wine. It’ll be many years before China reaches volumes of more established countries.
April 2013 – Issue 591
GRAPE AND WINE RESEARCH AND DEVELOPMENT CORPORATION
Newsletter of the GWRDC. Published bi-monthly
People in Research Paul Smith Research bug chemistry ‘click’
For Australian Wine Research Institute (AWRI) research manager Paul Smith, chemistry just “clicked” during his high school and university years. “Chemistry seemed to me to underpin lots of things that were happening in the world and allowed for practical creativity in science, which I found engaging. It was those early studies in chemistry that gave me the bug for research,” Smith said. Earning a PhD in Chemistry from Flinders University in 2000, Smith continued his research career in the area of organic synthesis of bridged, bicyclic amines using free-radical techniques, which he says allowed for the development of chemical frameworks in simple steps. A stint in polymer chemistry research at the CSIRO Molecular Science division, in Melbourne, preceded a National Health and Medical Research Council-funded post with the Department of Clinical Pharmacology, at Flinders University. This role particularly focussed on understanding how the structure of a compound affected its function in the body. When a research position was advertised at the AWRI in 2003, Smith had no experience in wine-related studies. However, his prior research experiences proved a good match for phenolic and tannin chemistry projects, because of his understanding of the relationships between the structure and function of chemicals. This translated well to research involving wine, and working out how chemicals in wine influenced aspects such as texture. “People respond innately to wine aroma, but texture is sometimes harder to explain without offering analogies such as touch standards like silk or sandpaper,” Smith said. Over several years, Smith and AWRI colleagues’ research has developed methods to tell the size, solubility, length and shape of tannins and how strongly they are likely to bond with other large molecules like proteins or polysaccharides in the mouth or in wine. “Research has helped the Australian
wine industry to have a better understanding of the composition and chemical structure of both grape and wine tannins,” he said. This research path led to what Smith identifies as his most satisfying research achievements in the area of phenolic and tannin chemistry. “Over the past decade, we have created means to more simply and quickly measure tannin which, in the past, was technically difficult and not readily accessible to winemakers,” Smith said. Smith was instrumental in the development of the MCP (methyl cellulose precipitable) tannin assay, a simple and robust method of measuring the total grape or wine tannin in red grape homogenate extracts and red wine. The assay uses equipment that many wineries already own in their laboratories, and is cheap to conduct. But, winemakers weren’t readily picking up on the MCP tannin assay, often because they needed laboratory staff with particular skills to conduct the test. So, Smith and colleagues worked with AWRI senior research scientist Bob Dambergs to make the test even simpler
by developing a spectral calibration. This method shines light through the wine and puts the numerical results into an equation to reveal the amount of tannin, total phenolics and total pigment in red wines and ferments. For more information, visit the AWRI Tannin Portal at http:// tannin.awri.com.au “The Tannin Portal allows winemakers to easily analyse their wine onsite whenever they need, such as in the heat of vintage. Winemakers can have results on which to base their decisions within minutes, which provides a greater ability to respond when it’s most needed. “The research behind the AWRI Tannin Portal has increased industry’s understanding of the tannin concentration of Australian wines, which we didn’t know much about 10 years ago,” Smith said. In recent years, Smith has taken on management of a wider portfolio of projects with a team of 12 enthusiastic researchers, and says he is pleased to be involved in a diverse range of projects assisting the Australian wine industry. These projects span haze stability, effects of oxygen during winemaking, evolution of ‘stinky’ sulfur compounds, red and white wine texture, tannin extractability, effects of polysaccharides and even the reasons behind why tannin in grape marc can reduce the methane emission of cattle. “The most exciting thing for me is seeing a practitioner in industry make a practice change on the back of knowledge that my team’s research has provided,” Smith said. Getting out and about in Australian wine regions through the AWRI’s Roadshow program is a key motivation for Smith’s ongoing research goals, he says. “I enjoy talking to grapegrowers and winemakers about how they’re using the tools for their own learning that I have been a part of creating. Winemakers get the most out of the research outcomes when they work or talk with researchers, and get innovative with their winemaking as a result of research outcomes. It’s a great reward for me to see businesses creating value from the research,” Smith said.
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Research aims for eutypa dieback fungicide registration SARDI scientists Dr Mark Sosnowski, Matthew Ayres and colleagues are nearing the end of a three-year project titled ‘Optimising management of eutypa dieback’. The SARDI and University of Adelaide researchers have conducted a range of field investigations and glasshouse trials to collect data that will hopefully lead to the registration of effective fungicide treatments for use in Australia. The fungus Eutypa lata infects grapevines through pruning wounds, colonising wood of cordons and trunks and causing eutypa dieback, which leads to a gradual decline in productivity of the infected vines and the vines eventually die," Sosnowski said. Eutypa dieback is found worldwide in cool climate wine regions with annual rainfall of more than 350mm, including premium grapegrowing regions of southeastern Australia and New Zealand. Timing pruning to avoid rainfall events and removing dead wood from the vineyard helps to reduce E. lata inoculum, but an established infection can only be controlled through the removal of diseased wood and retraining watershoots from below the infection. “Only two wound treatments, a biological fungicide and a paint containing fungicide, are registered for use against eutypa dieback on grapevines in Australia, and both need to be applied by hand. There is a need to register alternative fungicides that can be applied with sprayers. “To provide data to assist registration of fungicides in Australia, we selected five alternative fungicides; three natural products and two surfactants for field evaluation over two years, based on results from previous research,” Sosnowski said. The treatments were applied by hand at different concentrations, and the pruning wounds were inoculated with a high concentration of E. lata spores. A year later, treated canes were removed and assessed by isolation on agar. Four of the fungicides showed significant reduction in E. lata infection, and efficacy increased with dose rate: Folicur (59–88% control), Cabrio (10–75%), Shirlan (8–58%), and Scala (31–53%). The researchers observed that the addition of selected surfactants to fungicides provided no extra benefit to controlling the fungus. Although natural products did not significantly reduce E. lata infection in the first year, garlic and
Different types of sprayers were trialled across various South Australian grapegrowing regions as part of a GWRDC-funded SARDI and University of Adelaide project to discover means to optimise management of eutypa dieback.
lactoferrin provided 52% and 65% control respectively in the second year when the disease pressure was lower and closer to that of natural conditions. Fungicide treatments were also evaluated in the greenhouse four weeks after application using a detached cane assay. The results of the greenhouse testing suggested it may offer a quick alternative method of evaluation. In three South Australian grapegrowing regions, air-blast, air-shear, fan and recycle sprayers were trialled with the aim of improving the efficacy of applying pruning wound treatments. Some sprayers were found to control eutypa dieback using Folicur to a similar degree as handapplication, providing deposition was maximised by focussing the spray at the pruning wound area and using a water volume of at least 600 litres per hectare. Sosnowski and his research colleagues are already in discussion with the agrochemical companies. “If the data we provide is compelling, the companies will apply for fungicide registration with the Australian Pesticides and Veterinary Medicines Authority,” Sosnowski explained. Plans for the next stage of the research involve looking to further develop recommendations for maximising disease management for both eutypa dieback and
another similar disease, botryosphaeria dieback, in collaboration with colleagues at the National Wine and Grape Industry Centre. “We plan to look at the timing of fungicide application to be able to inform growers about how quickly post-pruning the fungicide should be applied, and for how long the pruning wound will be protected from the trunk diseases,” Sosnowski said. “In addition, we will determine the appropriate timing for pruning to minimise infection.” Current information about eutypa and botryosphaeria dieback that is used in Australia is based on apricots (where eutypa dieback was first discovered) and overseas grape research, which has recently provided conflicting information. “Our industry needs local information applicable to grapevines. We plan to investigate spore dispersal and the length of time that wounds are susceptible to trunk disease at different times in the pruning season, along with factors such as water stress. We also plan to seek potential new sources of resistance or tolerance to trunk disease,” Sosnowski said. For more about eutypa dieback, access the factsheet prepared by SARDI researchers Mark Sosnowski and Trevor Wicks on the GWRDC website www. gwrdc.com.au
R & D at Wor k
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Barossa growers build on biodiversity The Barossa Grape & Wine Association (BWGA) launched its ‘Creating Resilient Landscapes in the Barossa’ program in the last quarter of 2012 with three oneday tours of Barossa and Eden Valley vineyards to see biodiversity in action. The program was funded by the Adelaide Mount Lofty Ranges Natural Resources Management Board, while GWRDC supported a number of earlier projects that have influenced its development. Coordinated by Eden Hall Wines vineyard manager and owner of Falkenberg Vineyard Daniel Falkenberg, BGWA viticultural development officer Nicki Robins, and Russell Johnstone of Winecycle, the ongoing program will help local growers learn strategies to enhance biodiversity on their properties by restoring riparian zones and using native grasses to improve the overall health of the site. “Workshop participants visited properties, including Eden Hall, to learn the benefits of and how to establish native vegetation along riparian zones. We also focussed on how to establish and maintain perennial native grasses to enhance biodiversity in the vineyard, reducing costs and improving soil quality, water infiltration and soil biota,” Falkenberg said. “It will become increasingly important because of our changing climate and the availability and cost of water for vineyards
University of Adelaide research officer Chris Penfold (left) and Eden Hall Wines vineyard manager Daniel Falkenberg address attendees during the recent ‘Creating Resilient Landscapes in the Barossa’ workshop at the Falkenberg Vineyard.
to move away from being a monoculture by planting several native grass species,” says Robins. “We are already seeing how some growers can reduce tractor time and irrigation requirements thanks to the low maintenance, drought-tolerant nature of native grasses,” she said. Johnstone said native grasses can take some expertise and patience to establish, but they look a picture when established, and are highly evolved over many years to prosper in the Australian landscape. “These grasses are perennial, require a low level of nutrients and are well adapted
to drought. Their growth habit is that they ‘switch off’ when grapevines require moisture and nutrient for growth and ripening,” Johnstone said. A network of 70 growers interested in improving vineyard biodiversity for various reasons has been created through the program. “Since the workshops, the group has been offered networking opportunities to ensure the opportunity for sharing ideas, the results of trial work being done, and so that BGWA can provide resources and support,” Robins said.
Know your vines for best post-harvest care To give a vineyard the best start to the 2013–14 season, National Wine and Grape Industry Centre (NWGIC) Research Viticulturist Dr Jason Smith advises growers to consider how their vines have finished the summer and what might be required in terms of post-harvest nutrition and irrigation. “Post-harvest care of grapevines is often regionally-specific in its approach, and depends on crop load, harvest date and conditions the vines have experienced during the ripening period. “As a general guide, growers should work to maintain the canopy in a reasonable condition, without promoting unnecessary new shoot growth. This way, vines can continue to photosynthesise through the post-harvest period and store the carbohydrate and nutrient reserves required in the following spring,” Smith said.
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Smith added that it is also important to continue with pest and disease control, because aside from leaf area loss, infestations or infections can significantly disrupt and reduce carbohydrate export from the leaves. In Smith’s view, ensuring adequate storage of the major nutrients during the post-harvest period is better than having to correct deficiencies in the following spring. “Around 80 percent of growers apply fertiliser during the post-harvest period - commonly nitrogen, potassium and phosphorous. Early nutrient demand in spring cannot be met by root uptake alone, so shoot growth needs to be supported by nutrient reserves stored prior to dormancy,” he said. “Our research at the NWGIC has produced a substantial database of nutrient and carbohydrate reserve concentrations
from commercial vineyards, and one of the things we’re currently looking at is combining this information with a low-cost mid-infrared-based analysis method to provide a new post-harvest management tool for growers.” To complement this work and improve recommendations regarding timing of post-harvest fertiliser applications, NWGIC PhD candidate Mahmut Kare is investigating factors that could be used to predict the timing and duration of root growth flushes. Results of a current study involving post-harvest irrigation will be available later in the year. For more on the post-harvest care of grapevines, including irrigation and nutrition, access the factsheet recently prepared by Jason Smith and Dr Bruno Holzapfel, of the NSW Department of Primary Industries, on the GWRDC website www.gwrdc.com.au
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Enzyme battles white wine proteins AWRI research scientist Matteo Marangon and his colleagues are finding new strategies to remove proteins from white wines to prevent unappealing haze from forming. Bentonite fining is the method commonly used to remove grape proteins responsible for haze formation in white wines. Bentonite is effective, but has several drawbacks including wine and flavour loss, high labour costs, and handling and disposal problems. It is estimated that bentonite fining costs the global wine industry about $1 billion annually. AWRI researchers recently set up a successful strategy targeting the specific degradation of the proteins responsible for haze formation by a commercial food-grade enzyme called Proctase as a viable alternative to bentonite fining. The use of Proctase builds on research that has shown how haze-causing proteins behave when exposed to heat. In AWRI trials conducted at different scales (laboratory, small-scale winemaking and pilot scale), several juices were flash pasteurised at a temperature
slightly higher than the unfolding temperature of the haze-forming proteins (75°C for one minute) in the presence of 15mg/L of Proctase. Wine haze proteins were almost completely removed with this approach, thus eliminating the need to fine the resulting wines with bentonite. Sensory evaluation revealed no difference between Proctase and bentonite-treated wines. Likewise, the main physiochemical parameters of the wines remained unchanged. Marangon explained that batch in-line bentonite dosing may be more costeffective, but Proctase treatment could be cheaper for smaller wineries that cannot afford to invest in the required infrastructure. Preliminary process economic analysis conducted by the AWRI suggests that Proctase provides a significant operating cost-saving of 40–70% when compared with traditional batch bentonite treatment. “The Proctase protein stabilisation method is the only one so far that has shown the potential of competing with the common practice of bentonite fining white wines. Moving away from bentonite
Examples of wine treated for haze-formation using bentonite (left) and Proctase (right).
would allow winemakers to overcome the drawbacks associated with its use,” Marangon said. The AWRI is currently working with Food Standards Australia New Zealand to approve the use of Proctase as an additive for winemaking. Until approval has been obtained, Proctase should not be used in commercial winemaking in Australia. For further information, contact AWRI helpdesk on (08) 8313 6600
Dousing smoke taint risk to finished wine
Ground Floor, Industry House cnr Botanic & Hackney Roads Adelaide SA 5000 PO Box 610, Kent Town SA 5071 Telephone ( 08) 8273 0500 Facsimile (08) 8373 6608 Email firstname.lastname@example.org Website www.gwrdc.com.au Disclaimer: The Grape and Wine Research and Development Corporation in publishing this newsletter is engaged in disseminating information, not rendering professional advice or services. The GWRDC expressly disclaims any form of liability to any person in respect of anything done or omitted to be done that is based on the whole or any part of the contents of this newsletter.
The fires burning in Tasmania and North East and Eastern Victoria in February this year again raised concerns among growers about the possibility of smoke taint issues in finished wines. AWRI Victorian Node Manager Mark Krstic said that from a grower’s perspective, if smoke around the vineyard is caused by a wildfire, there is little that can be done to avoid damage to the harvest. “We have been communicating with land management agencies in Victoria and Tasmania over the past couple of years about the timing of controlled burns, which are often conducted during late summer or early autumn, to try to work with them to minimise the presence of smoke around vineyards during the growing season,” Krstic said. While Krstic said there is no rule of thumb when assessing the risk of smoke taint, growers who have experienced smoke in the vineyard with visibility of less than 2–5km for a day or more postveraison may have an increased danger of issues appearing in the finished wine.
“After the smoke event has passed, if grapes are close to commercial harvest, pick the grapes quickly by hand, keeping the harvest as cool as possible. Most smoke taint-related compounds are located around the grape skins, so be careful to maintain the integrity of the hand-harvested fruit. Remove leaf material in the harvest and leaf pluck to help remove any ash that has settled on the grapes,” Krstic said. Conducting a small lot fermentation in the winery is an effective means of assessing the likely risk of smoke taint or consider sending grape samples for analysis of smoke taint indicator compounds. For the AWRI’s small lot fermentation method, see http://www.awri.com. a u / w p - c o n te n t /u p l o a d s /s m a l l _ l o t _ fermentation_method.pdf Note that fruit samples from a Phylloxera Inclusion Zone or a Phylloxera Restricted Zone require a Plant Health Certificate. For more information about PHC, contact a DPI Victoria Plant Standards Officer on 136 186 or email email@example.com
grapegrowing Australians view latest gear at Vinitech Greg Howell, Vintessential Laboratories
Introduction IN LATE NOVEMBER, 2012 I was privileged to attend Vinitech – the renowned biennial trade expo – in Bordeaux, France. A small delegation of Australians braved the late autumn temperatures to view the hottest developments in viticulture and winemaking from around the world. Our delegation included David Botting, Burch Family Wines, WA; Martin Gransden, Cumulus Wines, Orange, NSW; Richard and Malcolm Leask, Hither and Yon Wines, McLaren Vale, SA; David Lowe, Lowe Family Wines, Mudgee, NSW; Lincoln Sauer, Pernod Ricard, Rowland Flat, SA and Andrew Weeks, CCW, Berri, SA. Most of us hadn’t met before, but that didn’t stop us having a great time at the expo. The awards night dinner was memorable; the Australian table was the first to realise that the bench on the side wall groaning with bottles was selfserve. Whilst others sat and waited to be served, our ‘sommelier’ Malcolm Leask enabled us to sample more wines than any other table, a notable achievement, although there was no award for it. The range of equipment and in particular the focus on new innovations at the expo was most impressive. The organisation has an excellent website – for more details see www.vinitech.fr. The opportunity for guided tours of the great estates of Bordeaux was not to be missed. We enjoyed visiting the vineyards and wineries and also tasted some interesting local wines.
Viticulture The viticulturists were very excited by some of the new equipment they saw.
Below is the pick of the crop:
Spray units The latest trend is for side panels on spray units to limit spray drift and to recover waste spray for re-use. So as well as limiting side effects of spraying, they are more economical with chemicals. Richard Leask was of the opinion that this is a trend that will become wide spread in Australia in the near future and he said he would consider buying one of these units. Several suppliers have introduced this technology and were on display at Vinitech.
An innovative solution for processing pruned canes from the vineyard floor
April 2013 – Issue 591
This cute little gadget won an innovation award and also caught my eye. The brand new device is a self-propelled robotic mower that is powered by a solar panel. Guided by an ‘app’ from a smartphone, it can be set to continually mow a vineyard area without causing any damage to vines. The boundaries are set by GPS on a smartphone so it can’t wander off. The benefits listed were: ‘reduced cost for mowing and reduction in sprays needed to control grass and weeds’. One limitation of the current model is that it can only mow grass up to 15cm high. More at: www.vitirover.com
Winemaking Again lots of advances and improvements in current equipment, plus new innovations were on display.
Prunings baler To say that David Lowe was excited about this device is an understatement. The machine sweeps the prunings up from the vineyard and then bales them, similar to baling hay. The bales can be used for decoration at the cellar door, or more importantly they can be turned into chips, pellets or briquettes for raising heat or electricity. All the necessary equipment for the baling, chipping, storing, pelletising and briquetting from the same supplier was also on display. Details at www.caebinternational.it
VINEYARD CANE RAKES • Very efficient at raking canes and debris • Rake and mulch in one pass • Single or double sided with swing back protection system
The new grape sorting devices, particularly those from Bucher Vaslin, were very impressive. At least one has been ordered by a major Australian company, we were told. The sorting tables can be integrated with existing equipment and are apparently very effective in preventing MOG (material other than grapes) from entering the grape receival system.
Barrel RFID tags Lincoln Sauer discovered this interesting new innovation. It consists of an integrated Radio Frequency Identification (RFID) system for electronic tagging, tracking and monitoring barrel movements. This was developed for a major Cognac house with over 200,000 barrels and is now commercially available. This appears to
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grapegrowing be a new application using existing technology and one that could be a good labour saving and stock control device. For cellars with a large inventory of barrels it would appear to be a good investment. See the supplier’s website at www.picdi.fr
Direct yeast addition The concept of active dry wine yeast inoculation in a different manner so that it can be ‘pumped’ directly into a tank without rehydration also saw a lot of interest (disclaimer: the supplier Oenobrands is represented in Australia by the author’s company Vintessential Laboratories). The ‘In Line Ready’ solution, machine and yeast products will also be on display at the upcoming Winetech show in Sydney in July 2013.
Summary There were a host of new (and old) technologies on display at Vinitech 2012 in Bordeaux. Some of the companies that had equipment that were of particular interest to the Australian delegation are already represented in Australia. Others are not currently available. The Australian delegation was delighted with the range of innovations for both vineyards and wineries. And I’m sure we would all like to thank Sandra Trew from Promosalons for her superb organisational skills, good humour and tolerance. The author wishes to thank Winetitles for the generous provision of airfares and accommodation and the opportunity to see the latest European winemaking and viticulture equipment.
Aerial applications proving a fast way to control snails KATNOOK ESTATE LIES in the heart of South Australia’s Coonawarra and has developed rapidly into one of the region’s leading wine brands. Chris Brodie is the vineyard manager and is responsible for 198ha of Cabernet Sauvignon, Shiraz, Merlot, Chardonnay and Sauvignon Blanc varieties. Although the famous Terra Rossa soil provides the perfect foundation to produce quality winegrapes there are still many challenges. Snails find the climatic conditions highly suitable for breeding and many vineyards in the area have difficulty managing this pest which can significantly reduce yields, contaminate grape harvest and clog sprinkler heads. Snails become active in the vineyard following the opening autumn rains and will feed, mate and lay eggs on the vineyard floor. With each snail capable of laying up to 200 eggs per year the population can expand in number rapidly. In spring the adult snails and their offspring head up into the cordon and feed on the new grape shoots as they emerge, which can lead to yield penalties of up to 33%. “We monitor snails in the vines from late summer through to autumn,” Brodie said. “As soon as we see movement on the ground, which normally coincides with soil moisture, we start our baiting program. We apply Metarex to about 80% of the vineyard using fixed wing aircraft. The balance of the vineyard is treated using a 12-volt spreader on ATV or Mule style vehicles. Our aim is to control the snails before they have a chance to lay eggs and aerial application lets us cover the vineyard quickly. The results are spectacular, with dead snails on the ground everywhere following application.” Bill Murray, AgNova representative based near Penola. Said: “Timing is crucial to successful snail control in the Coonawarra. Far too many growers try and control snails in late spring/ summer. This is often a waste of time and money, and yield damage has already been done. Katnook have the right strategy. Using a weather-resistant, highly attractive bait like Metarex can be the difference between the success or failure of a snail baiting strategy.” Brodie concluded: “We use Metarex here at Katnook because it gives us results. It seems reasonably weatherfast, it spreads well and we see thousands of dead snails the day after application.” For more information contact Andrew Glover, AgNova Technologies on 0433 708 312.
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April 2013 – Issue 591
Comparing organic, biodynamic and conventional vineyard management Chris Penfold, Luke Johnston, Melissa Brown, Petra Marschner, Sue Bastian and Cassandra Collins
Introduction ORGANIC AND BIODYNAMIC viticultural practices have received much attention worldwide, particularly by premium grapegrowers. An increase in the number of growers in Australia converting to organic and in particular biodynamic vineyard management practices has occurred over the past 10 years. One such grower is Melissa Brown, viticulturist at Gemtree Vineyards based at McLaren Flat. In 2008 she collaborated with researchers at the University of Adelaide to establish a replicated field trial to compare organic and biodynamic vineyard management with both low and high-input conventional systems at Gemtree. The first stage of the trial focused on assessing changes in soil properties, vine growth and wine quality over the threeyear conversion period needed to gain both organic or biodynamic certification and formed part of Luke Johnstonâ€™s PhD studies. This large scale trial is on a 10ha block of Cabernet Sauvignon and also incorporates the addition of compost (applied undervine) to each of the management systems to determine if compost is a major point of difference between the management systems. In 2011, the trial received funding from the GWRDC to continue the project until
April 2013 â€“ Issue 591
2014, to assess the longer term effects of these management systems.
Summary of three-year period Measurements of soil properties, vine performance, berry composition and wine quality were used to compare management treatments. Compost had a greater effect on soil properties, while there were no consistent differences in all soil measurements between management systems. Compost increased soil organic carbon, cumulative respiration, microbial biomass carbon, available nitrogen and phosphorous (regardless of the system). Over the duration of the conversion period, management system had no effect on soil organic carbon, microbial biomass carbon or chemical properties. Cumulative respiration was higher in organic and biodynamic treatments when undervine
Undervine management: conventional herbicide system.
weeds were actively growing compared with conventionally managed vines, which remained bare due to herbicides being used. However, when undervine weeds were removed via cultivation (to limit competition with the vine for nutrients and water) all management systems had the same cumulative respiration levels. No consistent effect of management system on vine and fruit quality measures was seen in results from the first two seasons. However, in the third season vine growth and yield were lower for organic and biodynamic treatments compared with conventional treatments. Total phenolic levels were also higher in the biodynamically managed vines compared with other management systems. Wines produced in seasons two and three from the trial were assessed by an expert panel of winemakers from
Undervine management: organic system.
Grapegrower & Winemaker
Cover cropping is an important vineyard management tool. Benefits include the ability to improve soil structure, manage soil moisture and successfully implement an integrated pest management (IPM) programme. Increased soil organic matter, a reduced need for tillage to control weeds and reduced top soil erosion all contribute to improved soil structure. Cover crops assist water infiltration, reducing runoff and subsequent erosion as opposed to cultivation or partially covered earth. The ability of the cover crop to utilise water prior to bud burst is an important consideration for managing water logged soils and excess vigour. Conversely, the crop may compete with the vines for much needed water in dry conditions, if it is still actively growing in the spring. Cover crops are an important part of an IPM programme. They can attract a number of beneficial insects and organisms to the vineyard and provide competition for weeds. This depends on the particular mix of species however and it is important to note that some may provide a habitat for pests such as Light Brown Apple Moth. Cereals and legumes are the most commonly sown cover crops. Native species have also proven very successful in some vineyards and can provide some benefits over cereals and legumes. These include potentially fewer passes with the slasher and increased water retention and infiltration. Cereal based crops including cereal rye, oats, barley, and triticale form large, fibrous root systems. Although these can provide a substantial amount of biomass to help increase soil organic matter, they will also consume and tie up nitrogen. Legume based crops fix nitrogen which is released and available for mineralization after the cover crop begins to decompose. Nitrogen is also released when a portion of the roots die in response to mowing, which maintains a balance between the shoot and root systems. To successfully establish a cover crop, proper preparation is required. Controlling weeds prior to seeding will be much easier and significantly more cost effective than once the crop is established. Glyphosate resistance is increasing in Australian vineyards and the first case of glyphosate resistance in New Zealand was recently confirmed in annual ryegrass on a Marlborough vineyard. Decrease risk of resistance developing by using the “double knock” technique – a full glyphosate rate followed by tillage or a full rate of a Group L such as SPRAY.SEED. For a one page guide to sustainable glyphosate use in vineyards, refer: glyphosateresistance.org.au
The average soil organic carbon at Gemtree Vineyards is 2.3% and did not change between management systems in the fourth season. Given the high clay content and organic carbon of the Gemtree soils, it is unlikely there will be any differences in vine phenology or wine quality between the management systems through changes to soil nitrogen. However, changing management can still influence soil properties. Soil microbes require carbon as their energy source, so changes in the quantity and/or quality of their food source is reflected in the microbial biomass and their activity, determined by their respiration of carbon dioxide. Soil samples were taken from under the vine, as that is the zone of greatest root activity. While the organic carbon levels have not changed, Figure 2 shows higher levels of microbial respiration coming from soils in the organic and biodynamic systems. This may be because plants have been allowed to grow under the vine throughout the year, so the associated carbon compounds released from the root systems, and labile carbon made available through plant senescence, has increased soil microbial activity.
Vine growth and yield The yields in 2012 were reduced significantly (20-30%) in the organic and biodynamic treatments compared with conventional treatments (Figure 3). The most likely cause for this was the undervine plant growth that persisted throughout the growing season – and was only restricted by mowing. Compost addition to the undervine row only improved the yield of the biodynamic system when compared with no compost addition. This outcome suggests that on heavy clay soils, such as the Gemtree site, little yield benefit is gained from either the nutrients or the mulching qualities of the applied compost.
Fruit and wine quality As found in the previous four seasons of the trial there were no significant differences found in nutrient content, TA, pH, Baumé and anthocyanin levels between management and compost treatments. However, as found in the third season the Biplot (axes F1 and F2: 97.05 %) ORG
complex textural spicy
unripefruit finetannin HCON
Richard Lillingstone B.Ag.Sc. M.Oen Technical Lead - Viticulture Syngenta Crop Protection email@example.com - 0407 868 697 For details, please call the Syngenta technical product advice line on 1800 067 108 or visit www.syngenta.com.au 52 Grapegrower & Winemaker
The fourth season (2011-12) Soil
F2 (30.54 %)
the McLaren Vale wine region. No differences in wine quality were observed between management treatments in the second season (2009-2010), however in the third season (2010-11) organic and in particular biodynamic wines were described as being more rich, textural, complex and vibrant than wines made from conventionally managed fruit (Figure 1).
BD -2.6 -3.2
F1 (66.51 %) Figure 1. Principal component analysis (PCA) of significantly different sensory attributes as affected by management system in the 20112012 season. ORG = organic, BD = biodynamic, LCON – low input conventional and HCON = high input conventional.
April 2013 – Issue 591
The continuation of the trial for a further three years, with GWRDC funding and the support of Gemtree Vineyards, is critical to understanding the impact on soil quality, vine growth and wine quality of the different management systems. Measurable differences in the soil are now becoming apparent, vine growth is being impacted and the wine quality may also reflect these altered management inputs. The following two years are therefore likely to provide some exciting outcomes from this large scale trial.
Acknowledgments The support of GWRDC, Mike Brown, Troy Elliker, Gemtree Vineyards, Peats Soils, the McLaren Vale Grape Wine and Tourism Association and all the expert winemakers who have participated in wine tastings are gratefully acknowledged. Chris Penfold, Luke Johnston, Melissa Brown, Petra Marschner, Sue Bastian and Cassandra Collins School of Agriculture, Food and Wine, University of Adelaide, Waite Research Institute, PMB 1, Glen Osmond, SA 5064. Contact: christopher. firstname.lastname@example.org or 08 8313 7735 cassandra. email@example.com or 08 8313 6813
Soil respiration mg CO2/g soil/day Yield (kg/vine)
0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0
Figure 2. Soil respiration (mg CO2/g soil/day) as affected by management system in the 2011-12 season. ORG = organic, BD = biodynamic, LCON – low input conventional and HCON = high input conventional.
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
Figure 3. Yield (kg/vine) levels of management system (ORG = organic, BD = biodynamic, LCON = low-input conventional and HCON= high-input conventional) and the addition of compost (+) in the 2011-12 season.
Total Phenolics (au/g berry wt.)
total phenolic levels were significantly higher when vines were managed biodynamically compared with other management systems (Figure 4). In January 2013 an expert group of winemakers from the McLaren Vale region assessed wines made from all management systems and compost treatments in a blind tasting. This data is currently being analysed and will be presented at an organic viticulture workshop at the Australian Wine Industry Technical Conference in July 2013.
1 0.95 0.9 0.85 0.8 0.75 0.7 0.65 0.6 0.55 0.5
Figure 4. Total phenolic levels (au/g berry wt) of management system (ORG = organic, BD = biodynamic, LCON = low-input conventional and HCON= high-input conventional) in the 2011-12 season.
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Grapegrower & Winemaker
Distinguished vineyard sites are essential for quality fruit production says Petaluma PETALUMA WAS FOUNDED in 1976 with a focused objective to produce ultra-premium wines by carefully selecting the best sites within a particular Australian region suited to that chosen variety, thus creating the concept of Petaluma’s distinguished vineyards. Underpinning this objective is the belief of the winemaking and viticulturist team in the merit and lineage of wines created from a single provenance. The team see themselves as custodians of the vineyards, believing that if the vineyards are great and the winemaking responsive, the wines will be outstanding. Petaluma’s distinguished vineyard sites are in three of South Australia’s premier wine regions – the Adelaide Hills, Clare Valley and Coonawarra. Petaluma recognised the potential of the Piccadilly Valley and Mt Barker regions for premium grapegrowing in the Adelaide Hills, and as a result were the first to plant in the region. Tucked in behind Mt Lofty, the Piccadilly Valley is the coolest viticultural region in the Adelaide Hills. The now 30-year-old vineyards are relatively steep, face north and east to receive the full benefit of the warming early mornings and produce delicate Chardonnay flavours with high natural acidity. The cooler aspects are utilised for the production of Pinot Noir for Petaluma’s sparkling wine, Croser. The Mt Barker vineyard was planted from 1992 in the sandy loam soils of the warm western flank of the Mt Barker summit. Underlying micaceous granitic schist geology is ideal in taming the inherently vigorous Shiraz variety. The Hanlin Hill vineyard in the Clare
Petaluma viticulturist Mike Harms monitoring fruit in the vineyard. Photographer: Milton Wordley.
Valley was planted in 1968 on the eastern hills. The slate geology and climate of the site are perfect for the production of the highest quality Riesling with a backbone of high natural acidity and intense rich lime flavours found in Petaluma Riesling. In Coonawarra, the Evans vineyard was planted in 1968 and lies in the heart of Coonawarra’s famous Terra Rossa red clay over limestone soils. These free-draining soils and the moderating influence of the cold Southern Ocean on the climate region produce elegant and long-lived Cabernet Sauvignon and Merlot wines. All vineyards are managed with
total dedication to allowing the best inherent expression of the vineyard sites in handcrafted wines, including handtending vines from pruning through to harvest, and protecting and enhancing soil health. Physical and nutritional properties are continually monitored, while soil biological health is an active area of interest. Petaluma has been using Neutrog Bounce Back for many years as one of the management options in the maintenance and improvement of soil health. They continue to see the long-term benefit in vineyard performance and therefore maximising the expression of the site in the wines.
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US study on managing yield and ripeness Kellie Arbuckle
MODIFI ED CA N E SYSTEMS are more likely to help vines produce high yields Training & and berry ripeness on trellising Sauvignon Blanc than other trellis methods, new research suggests. The findings are from a trellis study comparing five different trellis systems on various clones of Sauvignon Blanc vines, at Fetzer Vineyards in Hopland, California. The aim of the study was to determine what trellis system worked best to maximise yields, achieve uniform ripeness, produce high quality fruit and be suitable for mechanised harvesting. Glenn McGourty, viticulture and plant science advisor at the University of California’s Cooperative Extension, was the principal investigator of the study. “We were trying to find ways to improve yield in some cases, and reduce rot and mildew incidence in others,” McGourty said. “Our old-style spur cordon systems didn’t seem to work the best for Sauvignon Blanc. We also had problems with eutypa
post and fruiting wire at 36 inches 2. VSP, 4 canes with two pairs stacked on fruiting wires at 36 inches and 44 inches
and esca due to all of the wood in the cordon.” The five trellis types studied were: 1. VSP with bilateral cordon, a highway
Table 2. Fruit characteristics of Sauvignon Blanc on five different trellis systems in Hopland, Mendocino County, harvested 14 October 2010 (*means followed by the same letter are not significantly different at the 0.05 confidence interval). Berry weight (g)
Titratable Acidity (g/100ml)
1 - Bilateral cordon
2 - Four canes stacked
3- Stacked cane system upper fruitzone
3-Stacked cane system lower fruitzone
4 - Hybrid cane system - continuous fruit curtain
5 - Four parallel canes system - south side
5 - Four parallel canes system –north side
Table 1. Yield and performance of Sauvignon Blanc on five trellis systems in Hopland, Mendocino County, harvested 14 October 2010 (*means followed by the same letter are not significantly different at the 0.05 confidence interval as determined by Duncan’s Multiple Range Test). Treatment
1 Bilateral cordon
Av Cl Wt (g)
Tonnes per acre
Kg per meter of trellis
2 4 Canes stacked, total
2 Canes stacked, upper fruit zone
2 Canes stacked, lower fruit zone
3 Bilateral flop system
4 Continuous fruit curtain
5 Four parallel canes, total
5 Four parallel canes, south side
5-Four parallel canes, north side
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Table 3. Fruit yield to pruning weight summaries of Sauvignon Blanc on five trellis systems for 2008 and 2009 growing seasons (means followed by the same letter are not significantly different at the 0.05 confidence interval). 2008 Yield to pruning Wt
Yield to pruning Wt
2 – Bilateral cordon with wide cross arms
4 – Modified Cane (Continuous fruit curtain)
5 - Four parallel canes
Trellis 1 - Bilateral cordon
3. VSP, bilateral cordon, fruiting wire at 36 inches, 12 inch cross arm at 48 inches, and 16 inch cross arm at 60 inches to create more pendant growth to help divigorate the vines (this is a modified California sprawl system) 4. VSP with modified cane pruning to provide a continuous fruit curtain. Cordon wire at 36 inches, with four short canes tied to fruit wire at 44 inches 5. VSP with 4 canes tied to two parallel fruiting wires at 36 inches, two cross arms: one at 48 inches and one at 66 inches. The trellises were set up in 2007 on vines that had been planted in 2004. Each trellis system used 10 vines replicated four times (200 vines, in total). The data collected included cluster count, berry weight, fruit chemistry and pruning weights. Exposed canopy surface was measured when the vines were fully mature. In 2009, the vines were balance-pruned, meaning three bud spurs were left, with the aim of obtaining 40 buds per vine on average. In 2010, the harvest overall produced a large crop, with a harvest date of 14 October which is considered late for Sauvignon Blanc in the region. In this harvest, McGourty measured yields in the vines with separated fruiting zones, which included the four-staked cane treatment and the four parallel cane treatment system. McGourty said the cane systems provided the highest yields, with up to double the number of buds compared with spur cordon systems. “The modified cane system gave us good yields and ripeness, while the parallel cane system worked well when we had a warm year and a long growing season, as it gave us good yields, but fruit takes longer to ripen,” he said. The bilateral cordon systems were the lowest-yielding in the trial, while the standard bilateral cordon system ripened the fruit well. While only tested on Sauvignon Blanc, McGourty said the benefits of the modified cane system could be applicable with Chardonnay. He said the findings could also be applied by growers in Australia. “Our findings are quite applicable to warmer regions of Australia, since our conditions are similar. New Zealand would be different as it is cooler. I would be looking at a modified cane system with earlier ripening clones of Sauvignon Blanc (smaller bunches) to improve yield and quality in New Zealand,” he said.
08 8349 7654 56 Grapegrower & Winemaker
April 2013 – Issue 591
Early maintenance crucial to trellis longevity With vintage 2013 now well in hand, the focus for many growers has shifted to post-harvest care. Grapegrower & Winemaker spoke with three key grapevine trellis suppliers (Ocvitti, Woodshield and Tuckaway) about grapevine trellis maintenance and why it’s so important. Why is it important to maintain trellises? Ocvitti national sales and marketing manager Nigel Catt: Trellis maintenance is the backbone of the vines’ structure and allows machine pruning and harvesting to occur. Uniformity and stability of vertical trellis allows for more precise pruning methods and better harvest ability. Woodshield sales manager Ashley Davidson: Trellises, like vines, are an asset in the vineyard. The right posts, fasteners and wire will give you the return on investment you want in your business and correct maintenance of these items is essential. Tuckaway general manager Tristan Badger: A wellmaintained trellis can be relied on to support the vines right through the harvest. Murphy’s Law says a poorly maintained trellis will fail at the least convenient time, requiring extra work when you’re at your busiest. You risk costly damage to harvesting equipment, and potentially even more costly missed delivery deadlines.
When is the best time for maintenance and why? Catt: Traditionally, trellis maintenance occurs in the short period between pruning and budburst for a number of reasons: the soil is wet and the vines are dormant. Davidson: After vintage is the best time to assess your trellis infrastructure. It’s a good time to check the trellis and do the
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necessary assessment, maintenance and replacements before pruning. Badger: The best time for repair is as soon as the problem starts. It won’t fix itself and will only get worse. After pruning is ideal to schedule preventative maintenance, because the all-important grapes are “in the bag”; the vines have lost their leaves and excess canes and the trellis are visible and accessible.
What are the most common problems of trellises and what are the causes? Catt: Trellis damage occurs a number of ways: vineyard machinery breaking posts and wires; natural damage through high winds; and time, as older posts become brittle and snap more easily. Davidson: The most common problems regarding trellises are breakages and fastener issues. Vintage is over and the trellis has done its job; the harvesters have pounded the trellis, and any rotten or broken post and loose fasteners will need a repair. You need to maintain your trellis so it can do its job next season and provide you with the end result you are aiming for. Badger: Broken posts due to collision with machinery; fasteners falling out of posts; broken wires.
Please provide your top tips on how growers can maintain the longevity of their trellises. Catt: Fixing problems in a timely manner can alleviate a mass breakage at full crop load which is difficult, costly and a pain to fix. Watering before harvesting allows the ground to ‘give’ when the harvester shakes the post, so the energy is expelled in movement. Davidson: Make sure your employees value your trellis. They are the eyes and ears of the vineyard, and can make you aware of any issues that need attention sooner rather than later. Take action, save money and protect your investment. Make a trellis observation check list for your vineyard: rotten posts; broken posts; missing fasteners; loose wires; and strainer issues. Organise a timeframe, budget and an action plan for implementation to repair any issues that need attention. Take action on any trellis issues sooner rather than later. Ask anyone who has had a trellis collapse on them and the problems they faced – you never want to go there. Maintenance is the key to longevity for your trellis. Think ahead, plan and make sure you have a cost effective solution for any issue that arise. Badger: Get onto it fast. A stitch in time saves nine. Broken or missing components put extra strain on their neighbours, and they’ll be next to fail. Do it right first time. Cheap components might seem like good economics, but not if they’re going to cause problems later. Factor in the cost of future labour and choose good quality components. Look after your wires. It doesn’t matter how good your posts are if you’re about to hit the wires with the slasher. A clip-style fastener at the bottom of the post keeps moveable wires neatly out of the way of pruners and undervine machinery. Tension wires appropriately. Slack wires give more scope for sawing back and forth, leading to accelerated wear on wire and fasteners. Use sacrificial fasteners. A fastener that lasts forever is a good thing, right? Not if it’s at the expense of your wire. Replacing fasteners is much easier than repairing/replacing broken wires.
April 2013 – Issue 591
New secateurs offer safe and comfortable vineyard operation
FELCO OF SWITZERLAND is currently releasing its new Felcotronic 820 on the Australian market. The new product is entirely designed, developed and manufactured in Switzerland. The model is a powerful, fast, reliable and easy to handle electric pruning shear that offers a number of innovative features. The Felco 820 is recommended for a wide range of pruning applications. Its large cutting capacity of 45mm makes it ideal for use on mature vines and for vineyard rejuvenation. The Felco 820 is extremely powerful. The powerful straight drive mechanism ensures clean, accurate cuts with no
60 Grapegrower & Winemaker
twist, regardless of cutting diameter. The curved cutting head ensures that the tool is not pushed back when making larger cuts, reducing operator fatigue. Rapid opening and closing ensure time saving and productivity. A new feature of the Felco 820 is half-opening on the go. Simply doublepressing the trigger activates the semiopen mode, saving valuable time with small and medium-scale cutting. This gives highly accurate control of blade movement and eliminates the need to switch between an electric pruning shear and a saw. The newly designed harness offers the
optimum combination of user comfort and exceptional charging capacity. It can be used with either one or two batteries depending on the load level required. The backpack-style harness can easily be adjusted and sits close to the body for freedom of movement. The power pack is fully compatible with Felco 800 and 810 models. The ultra-light and slim LiPo batteries recharge within two hours and a USB port enables charging of items such as a mobile phone or MP3 player. The forged aluminium body provides exceptional strength and long life. It is dust and water resistant, yet offers easy access for servicing. Felco has put great effort into simplicity of maintenance procedures with a view to saving time for operators. Daily and weekly maintenance only takes a few minutes and, as with all Felco products, all parts can be replaced. Felco Australia is looking forward to a successful product launch, Blaise Vinot, managing director of Felco Australia Pty Ltd said. “We have participated in extensive testing of the tool over the past two years, and have been very pleased with the results,” Vinot said. “The tool is getting a great reception from users requiring a strong tool that delivers large and small cuts without compromising on speed. “We think the Felco 820 will quickly find its place in the market this season.” The Felco 820 is now available at Felcotronic Dealers nationally. For more information contact Felco on 1800 730 257 or visit www.felco820.com.
April 2013 – Issue 591
The patented Eco Trellis System has been engineered to replace traditional CCA wooden posts used in vineyard trellis systems. Eco friendly and fully recyclable, the high strength galvanised steel products are free of contaminants so potential ground leaching is eliminated. The system comprises of strainer systems, intermediate posts and clipping systems interchangeable for your specific application.
Hand inserted trellis clips for general, permanent capture and automated vine stripping applications.
Conventional, box and tie-back strainer posts are available as standard NEW AGPOST CLIP POSITIONING. See www.ecotrellis.com for more detail. The patented footing at the base of the strainer and intermediate posts gives up to four times more retention than a parallel post. If you have soft or loose soils we recommend the use of a GRF plate which slips over the top of the post to prevent lifting or under the bottom of the post to prevent sinking - no more welded anchors.
winemaking New Ovum and other eggs being trialled at Cullen’s Margaret River winery Danielle Costley
WINEMAKERS ARE IN a constant quest for perfection. No longer satisfied with defining the origins and seasoning of oak, some enthusiasts are exploring the effects of the shape and volume of the barrel on wine flavours. A decade ago, French company Nomblot developed a concrete eggshaped fermentation vessel to provide better uniformity of the liquid’s composition and help it maintain a more constant temperature. Now, Taransaud Cooperage has introduced oak eggs into the market, called the Ovum. The original concrete vessel was designed for French winemaker Michel Chapoutier who, as a follower of biodynamic winemaking, believed there were special powers in the egg shape. Apparently an upright tank egg shape is supposed to concentrate the energy vortex of celestial energy. These egg-shaped fermenters are growing in popularity amongst biodynamic producers. Apart from its microoxygenation and thermoregulation properties, the Ovum is designed to enable the natural mixing of the lees to enhance complexity, purity and precision in the wine. Claims such as these sparked the interest of Western Australian biodynamic winery, Cullen Wines. In November last year, winemaker Vanya
This innovative oak Ovum at Cullen Wines is the first to be used in Australia and winemaker Vanya Cullen is excited about its potential.
Cullen took delivery of three eggs at her Margaret River winery: an Ovum oak tank, a Nomblot concrete egg and a Magnum 675 ceramic vessel. The wooden egg stands tall in the Cullen’s winery (literally). At approximately 2.17m in height, the fermenter holds 2000 litres of liquid and costs about $34,000 per barrel. “Currently the wooden Ovum is being used to store mature Cabernet Sauvignon. It is a finished wine, so we are not fermenting it. At this stage we don’t know how long it will be in the barrel, but we are tasting it constantly and paying close attention to it,” Cullen said. In contrast, the concrete egg is being used for whites and is currently fermenting freshly picked Chardonnay grapes from this vintage. The oak Ovum is said to benefit wine as the porous concrete provides oxygenation without adding the flavours of oak. The concrete is ‘breathable’ like barrels, but does not add any oak characters to the wine. When white wine is fermenting in a stainless steel tank, it moves around in a circle. The difference with the oak Ovum is that the barrel’s rounded bottom creates a natural stirring effect during fermentation, which softly churns the fruit. “We don’t have to stir the Chardonnay, as it just ferments itself due to its unique egg shape that allows the fruit
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April 2013 – Issue 591
Ovum wine has more fruit definition, according to Vanya Cullen, winemaker at Cullen Wines.
to gently churn away, without human intervention,” Cullen said. “Already we are seeing that the wine from this egg is very fruity and definitely has more fruit definition than what it would have when compared with normal barrels.” Initially there was some Cabernet Sauvignon in the ceramic egg and in Cullen’s early stage of observation she has already noticed that the fruit in the concrete and ceramic eggs matures at a faster rate than in traditional barrels. “We are interested to see how the wines develop. It is too early to see any definitive results as we only have a few months’ worth of information, but it does appear that the wine is ageing at a quicker pace,” Cullen said. While the concrete and wooden eggs are now contentedly filled with fruit and being at one with the universe, the ceramic egg lays dormant, awaiting
Cullen’s decision on what variety to use in it next. Some biodynamic winemakers are stating that the convection from fermentation inside the egg creates a vortex that works to connect the energies of the cosmos to the energies of the earth. This is due to its design, which allows it to continually mix the lees, leading to an improved mouth-feel in the wine. “We are always interested in producing better quality wines that are more interesting. Obviously the egg ties in with the biodynamic principles of creating life. Everything we do at our winery is about creating life and the egg shape represents where life (and birth) comes from,” Cullen said. “The shape encourages a natural fluid movement that reduces the need for intervention and that certainly parallels our winemaking philosophy.” Rather than simply purchasing
high quality barrels for fermentation, winemakers such as Cullen are starting to examine all of the factors that influence the effects of wood on the wine. It is innovators such as Chapoutier and Cullen who are experimenting with new equipment such as the oak Ovum and encouraging these questions about how and which changes should be made for different situations, as well as what factor shape plays in the development of the wine. It may take another five or so years until we are able to look back and assess the long-term viability of the Ovum, but in the meantime, users are claiming that they are getting a greater level of complexity aromatically (beyond what would normally be seen in a stainless steel vessel), as well as a rounder, richer mouth-feel in the wine. While the new Ovum oak barrel comes at a price, Cullen is optimistic the egg will live up to expectations. “We read a lot of information on the Ovum prior to purchasing it and thought it seemed like a fun investment for the winery. The philosophy behind its unique design certainly ties in with our biodynamic principles. But we really don’t know what the outcome will be as we’ve only used it on two varieties so far, with one and a half vintages under our belt,” Cullen said. “I hope to use the Ovum for our flagship range, but that is something that only time will tell. We are still in our infancy in terms of trialling these new fermenters,” she said. “We just have to pay attention and see what happens to the fruit as it develops in the eggs.” Wines produced from the Ovum are receiving mixed reviews around the world, so it will be interesting to see what the future holds for this expensive, yet exquisitely designed egg. For more information on the Taransaud Ovum range, contact Andy Gravier on (03) 9602 4066 or visit: www.taransaud.com
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April 2013 – Issue 591
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ask the What’s that smell – is that Brett? Part 2 There have been a number of queries lately to the AWRI regarding Brettanomyces, or ‘Brett’, in wine, particularly the perception of Brett in different wine styles and at levels close to the sensory threshold. Here are some of those questions – other questions were explored in our January issue. Do all wines have Brett?
At one time it was commonly thought that all red wines has Brett, just in different amounts. In the late ’90s this was probably the case. At the completion of the AWRI’s 10-year Brett Survey of Cabernet wines, the mean level of 4-EP in Australian Cabernet had dropped by a dramatic 90%, with a mean 4-EP of 107µg/L reported in 2005 vintage, and with 21% of all Cabernet wines measured from the 2006 vintage having ‘not detectable’ levels of 4-EP or 4-EG. Are certain types of wines more likely to be affected by Brett?
Brett only needs 0.3g/L sugar to produce 1000µg/L 4-EP (AWRI publication #1227).
The average glucose+fructose levels in Australian red wines has increased to 2.1g/L (AWRI publication #1212) in 2008, from 0.5g/L in 1998. Increasing alcohol levels over time, stuck or sluggish ferments, or consumer-driven sweetness levels in reds, does mean red wines with some residual sugar are more at risk and might require filtration when previously they did not. Beware of unneeded or excessive use of yeast nutrient and nitrogen during fermentation which can leave residual nitrogen as a food source and might under some circumstances increase Brett risk, as well as increase the risk of other spoilage organisms growing. The Brett zone is now known as that critical time from the end of primary and secondary fermentation until the point before sulfur dioxide (SO2) is added. Leaving wines unsulfured for long periods of time, particularly during slow malolactic ferments (MLF), is the riskiest time for Brett growth. Ideally, MLF should be finished quickly. A molecular SO2 concentration of 0.6mg/L is required to prevent Brett growth, and
is best achieved by one large addition of SO2 post-MLF fermentation. What is the best way to monitor or measure Brett?
You can routinely measure wines for the 4-EP marker compound, however this is expensive and only tells you once there is already a problem. A range of Brett sniff test kits are also available where wine is added to broths, and if the wine contains Brett yeast they will grow and produce 4-EP levels that can be readily detected sensorially. Routine microbiological testing is also costly and time consuming. An effective way of monitoring for Brett, and other microorganism growth during barrel ageing, is simply to measure the free and total SO2 ratio. If Brett or anything else is active, then the ratio starts to increase. Ideal ratios of Free to Total SO2 in a finished wine are 1:2 or 1: 3 (e.g. 30:60 or 30:90). Once the level creeps up to 1:5, it suggests something is binding up the SO2 and actions needs to be taken. Now that team AWRI has sequenced the Brett genome (AWRI publication
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April 2013 – Issue 591
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#1450), future diagnostics tests are likely to become available including rapid PCR identification of yeast and tests to identify sulfite-resistant Brett strains. If my wines have Brett, how do I treat it?
Prevention is better than cure. Routine sanitation will prevent population buildup in your winery. The key ways of spreading Brett around include wine transfers, putting clean wine into contaminated barrels, or vice versa, cross contaminating barrels via topping, sampling and barrel stirring. Affected barrels can be filled with hot water at 85°C for 15 minutes to sanitise the barrels. Mark these barrels and watch them carefully the next time they are used. Barrel disposal in some instances might be a safer option. Ozone and ultrasonics have also been reported as treatment options. Brett can be removed from wine by sterile filtration, and can be kept under control with effective SO2 management. Reduction of 4-EP by reverse osmosis treatment is offered by several companies, or low levels of 4-EP can be blended away to levels below threshold. And for the quirky question that people always seem to ask. Has the boy’s name Brett declined in popularity since Brettanomyces became a nasty word in the wine industry?
for men in 1980 peaking at #77, declining through the ’90s and 2000s to # 508 in 2011 www.babynamewizard.com. While there is a clear correlation with the decline in Brett incidence over this period, there is no evidence to suggest this was a major driver in not naming children Brett!
References Bramley, B.; Curtin, C.; Cowey, G.; Holdstock, M.; Coulter, A.; Kennedy, E.; Travis, B.; Mueller, S.; Lockshin, L.; Godden, P.; Francis, L. (2007) Wine style alters the sensory impact of ‘Brett’ flavor compounds in red wines. In: Blair, R.J.; Williams, P.J.; Pretorius, I.S. (eds) Proceedings of the 13th Australian wine industry technical conference: 28 July – 2 August 2007; Adelaide, South Australia: Australian Wine Industry Technical Conference Inc.; Adelaide, SA: pp73-80. Chatonnet, P.; Dubourdieu, D.; Boidron, J.N.; Pons, M. (1992) The origin of ethylphenols in wines. J. Sci. Food Agric. 60: 165–178. AWRI publication #1450. Curtin, C.D.; Borneman, A.R.; Henschke, P.A.; Godden, P.W.; Chambers, P.;J. Pretorius, I.S. (2012) Advancing the frontline against Brett: AWRI breakthrough offers potential to transform the battle against Brett. Practical Winery Vineyard. 33 (2) : 47-54. AWRI publication #1227. Coulter, A. 2010. Postbottling spoilage - who invited Brett? Aust. N.Z. Grapegrower Winemaker. 559: 78-86. AWRI publication #1212. Godden, P.; Muhlack, R. (2010) Trends in the composition of Australian wine, 1984-2008. Aust. N.Z. Grapegrower Winemaker (558) : 47-61. www.babynamewizard.com (accessed Nov 2012)
Yes. Brett was a very popular first name
Adelaide to host global wine forum
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Wine Australia and the South Australian Government will host what they say is the first and biggest wine forum, Savour Australia 2013, in Adelaide. To be held from 15-18 September 2013, Savour Australia will bring together a mix of business discussion, wine tastings and lifestyle experiences to illustrate the position of Australian wine as a significant player in the global wine market. Wine Australia market development general manager, James Gosper, said Savour Australia heralded a significant change in the promotion of Australian wine globally. “We want attendees to challenge the commonly held perceptions of Australian wine, uncover the business case for our wines and discuss Australia’s role in the global wine market, but do this in a way that couples our wines with our quintessential Australian way of life,” Gosper said. The event will include 20 landmark tastings, themed lunches and dinners, and discussions that will showcase www.winebiz.com.au
rarely-seen wines to uncover what Australian wine has to offer. The event will attract wine distributors, retailers, winemakers and commentators from around the world.
New wine sales company launched A new wine sales and distribution company by the name of Epoch Wine Group was launched at the start of this month. Sam Mete, former Cumulus Estate wines sales director and newly appointed Epoch Wine Group CEO said, “During my 25 years in the Australian wine industry I’ve seen many a great wine brand struggle with distributors that are unable to give their brand 100% attention. At Epoch we are providing a new model where like-minded wine producers can join as partners and have equity in the business. This will create stronger working relationships, within an environment of respect and trust, and a place where everyone has a vested interest in securing top-quality sales opportunities.” April 2013 – Issue 591
White wine phenolics – friend or foe? After isolating GRP and caftaric acid from experimental wines, AWRI researchers used these wines and phenolic compounds to identify correlations with sensory ratings and explore the role played by pH and alcohol on phenolic taste and texture. Richard Gawel, Dr. Martin Day, Alex Schulkin and Dr. Paul Smith
A RECENTLY COMPLETED report on a collaborative research project with Orlando Wines has shed some new light on the impact of phenolic compounds in white wine which may allow winemakers to better manage palate texture in their wines. Controversially, some of the findings contradict widely held assumptions about phenolics in white wines, particularly their assumed effects on astringency. The effects of the phenolic composition, alcohol and acidity levels of white wines on their mouth-feel and bitterness were assessed by a team of researchers at the AWRI using experimental winemaking, sensory, and advanced compositional analysis. The key findings were that low pH enhanced astringency, while the presence of two major phenolics in Australian white wines either increased palate ‘oiliness’ (Grape Reaction Product (GRP)) or suppressed ‘hotness’ (caftaric acid). The AWRI researchers made experimental wines over three vintages
which clearly exhibited a range of ‘phenolic’ character. From these wines the researchers isolated GRP and caftaric acid. We used these wines and phenolic compounds to identify correlations with sensory ratings and explore the role played by pH and alcohol on phenolic taste and texture. In the wines made using methods designed to alter their phenolic content (i.e. pressings, hyperoxidation, skin contact), the perception of astringency was found to be far more influenced by pH than by the total amount of phenolics. Increased skin contact led to more phenolics, as expected, but unexpectedly astringency decreased and viscosity increased, mostly due to the pH increase (caused by potassium extraction from skins). However we showed that wines to which 30% more phenolics were added were more astringent, but overall, this significant increase in total phenolics induced a relatively small increase in astringency compared to that caused by pH. The increase in astringency resulting
from adding phenolics was greater in higher pH wines, once again highlighting the importance of pH on astringency. Higher pH was also associated with higher viscosity, further emphasising the importance of pH on the perception of mouth-feel in white wines. GRP was found to increase the impression of oiliness in model wine. Palate hotness or ‘burning after taste’ is most highly associated with alcohol concentration. High phenolic levels also appeared to slightly enhance the hot palate sensation, but in a further discovery, the major phenolic in white wine, caftaric acid actually suppressed alcohol hotness. Bitterness was generally positively associated with phenolics, although not for the two major phenolics in Australian white wines (GRP and caftaric acid). This implicates some other phenolics whose identity remains unknown in white wine. The report detailing the research carried out is now available on the GWRDC website (http://www.gwrdc.com.au/site/ page.cfm?u=43&t=project&cId=2796).
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Grapegrower & Winemaker
Pioneering wine family is quiet achiever Grahame Whyte
stayed until about 1942 and during this WINEGROWER Dr Richard Hamilton has time Syd realised that to make good a pioneering winemaker in his family quality aromatic table wines required a tree – his uncle Sydney. means of cooling. “Sydney Hamilton was essentially Firstly, he experimented with a chilled a self-taught chap, both in general brine solution in copper coils immersed education and in winemaking. He was in the fermentation tank and this did the probably about 16 when he got thrown job in keeping temperatures down. into winemaking, due to the untimely “However, through these coils he death of his father – my grandfather – ran into problems. The wine which was Frank Hamilton,” Richard said. initially bright went cloudy. He was “In about 1918 Syd’s elder brother Eric puzzled by this and couldn’t find any returned from Gallipoli and Flanders and answers so referred to his French text they had to take over, so Syd was thrown where he found this condition called in with bare feet and bare hands to make copper casse. If you got too much copper the next vintage. in the wine there is a reaction and it “Syd was an avid reader and he had precipitates out, then you can’t get rid of a very active mind – he taught himself it,” Richard said. French and German and was able to “So what he did to the alarm of his read wine textbooks. He had a very good brother and other wine people was to engineering mind too, and was able to Grapegrower & Winemaker, December 1979. build a huge underground cellar and make equipment he needed.” install refrigeration, jarrah vats and oak In the 1920s a Russian, John Seeck, casks to keep the wine cool. turned up. Trained at the Heidelberg “This was an absolute breakthrough, of course. This was winemaking school in Germany, he started work as a consultant the beginning of the Ewell Moselle – that was really the first winemaker. aromatic table wine of any quality and was recognised as such. He became a mentor, influencing Syd a great deal. Seeck “This cool handling of grapes was really the beginning of the white wine revolution, the table wine revolution in Australia.” In the early '70s, during the beginning of the red wine boom, Richard started off his own winery at Willunga and his father Burton left the old family company and came to help. “Uncle Syd had left the family company in 1955,” Richard said. He was bought out by brother Eric and became a grapegrower for quite some years. But he always harboured the passion to someday make Australia’s best red wine from Cabernet Sauvignon. “He was getting quite old – he was 76 when he went down When a barrel becomes too expensive for certain there – but I believe he was quite inspired by my enterprise and product ranges, winemakers need alternative oak my success at McLaren Vale. After searching the country from east to west he settled on Coonawarra – he bought some land options that deliver the “fine oak touch.” down here in 1974 and built the winery the next year, and that’s called Leconfield. I acquired Leconfield from Syd in 1981.” And does Richard remember looking for information about Tech-
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April 2013 – Issue 591
Grapegrowing in the Hamilton family dates back to 1837 when the first Richard Hamilton (1792-1852) planted the first vineyards on the Adelaide with Cape Town cuttings. These vines formed the foundations of the Hamilton Ewell Wine Company. By the 1850s, Richard’s third son, Henry Hamilton (1826-1907) had planted additional vineyards and established wine cellars. Frank Hamilton (1859-1913) joined his father in the vineyard and winemaking business in 1875 and managed it from around 1890. During these years, Frank produced a fine Chablis-style, dry white wine based on Pedro grapes. In 1928, his son Sydney pioneered Hamilton’s Moselle. In order to retain natural acidity, the Pedro and Verdelho grapes were picked early and fermented in closed wooden vats instead of the usual open cement tanks. This was a milestone in Australian winemaking. In the mid-1930s Sydney began experimenting with cold fermentation techniques and went on to use a refrigerated cellar to control the fermentation in the production of quality Germanic-style white wine. Later he used mechanical refrigeration to chill must prior to fermentation. These pioneering techniques allowed for the preservation of delicate aromas and flavours in white wines. Burton Hamilton (1904-1994), fourth son of Frank Hamilton, established vineyards in McLaren Vale in 1947 and was a great believer in the quality of the region. In 1972, Burton Hamilton’s son, Dr Richard Hamilton, established a small winery in McLaren Vale and gradually began to build up the family’s vineyard holdings, under the watchful eye of his father. Richard honed his skills as a winemaker under the guidance of Burton, Uncle Sydney and French winemaker Maurice Ou, and throughout the 1970s produced a number of award-winning wines. A fifth-generation descendant, Dr Richard Hamilton now perpetuates the family’s 175-year involvement in the wine industry. winemaking in the pages of Grapegrower & Winemaker magazine? “The magazines were good and I used to read them,” he said. “There was a lot of technical stuff. There were articles by Bryce Rankine, for instance. “He was very influential and I know everybody respected him highly. “I used to speak to him as did Syd and Burt, to consult with him and he was always very, very helpful. “I was a Grapegrower & Winemaker subscriber and still am, actually. “When I was actively involved in the winemaking, I found the magazine a tremendous resource in terms of winemaking, chemistry and so forth – I hope it continues.”
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EQUIPMENT & SUPPLIES
National: 03 9555 5500 NSW Sales: 0447 020 313 SA & WA Sales: 0401 560 550 Hamilton Ewell Winery workers are busy on a labour-intensive bottling line in 1947. April 2013 – Issue 591
E-mail: firstname.lastname@example.org Grapegrower & Winemaker
winemaking Today’s winemaking focus differs from 1970s approach The December, 1979 edition of Grapegrower & Winemaker featured an article called “Wine grape quality – can it be measured?” where it talked about the basic components as sugar, acid and pH. We asked Leconfield winemaker Paul Gordon to recall the standard winemaking approaches in that era. “Yes, they are the basics – and more recently anthocyans and colour can be used,” Gordon said. “However, personally I think with the regions like Coonawarra and McLaren Vale there is no substitute for getting out there and looking, for seeing the fruit – what is tastes like, how ripe the seeds are, seeing the colour of the flesh, how much shrivel may be on the grapes, what the crop load may be – all those things from a premium winemaking point of view, all those things are a primary source of quality assessment rather than a scientific number,” he said. “Back in the 70s my role was different from what it is now. I was working mainly with bulk varieties. In those days the
sugar level was a primary goal. We also measured pH and TA as we realised we had to adjust those. “In the Coonawarra in the early days, the Baume was a major determinant of when we would pick, but I think the more experienced you got the more time you spent tasting. “Getting an idea of the fruit, the quality, of the texture of the fruit, of how much light the fruit is getting, is much more important now.” Has the concept of quality changed? “Yes, I think so, I guess with the comparisons of one person over time, you learn a lot. There are more important and fundamental things than just the measurement of sugar,” Gordon said. “We’ve got some grapes out here that are testing at 13.9 Baume but they aren’t ready to pick yet. Probably 15 years ago we would have panicked and got them off the vine – but that’s not necessarily how we see it right now,” he said. “Similarly, last time I picked some
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McLaren Vale in February at 13 Baume it looked fine, it had quite good sun exposure and small berries and I figured that with some heat coming up it wasn’t going to improve at all. If you just went by the figure alone, you would probably get it wrong. “Production is affected by how much yield we have our own vineyards here, so in years when we used to have larger crops volume, that put some strain on our production facilities. “Nationally, dry years have limited yields, like at our McLaren Vale vineyards, where yields have about halved, and the last couple of years Coonawarra has been down, too – so we have a shortage rather than a surplus, from our own point of view.” And at 5-6 tonnes to the hectare at McLaren Vale, the quality of the current vintage is putting a smile on this winemaker’s face. “It’s been a great ripening season, there’s been no rain to speak of, it’s been warm without having huge extremes – so far the quality looks pretty good.”
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April 2013 – Issue 591
$22,000 wine science award to explore ‘cold soak’ RICHARD FENNESSY WILL explore the influence of climate and variety on the effectiveness of ‘cold soak’ (prefermentation cold maceration) after winning the $22,000 Viticulture and Oenology 2013 Science and Innovation Award for Young People in Agriculture, Fisheries and Forestry. GWRDC is the principal sponsor of the viticulture and oenology award. The award was one of 12 category awards presented this week by the Minister for Agriculture, Fisheries and Forestry the Hon Joe Ludwig at the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Outlook 2013 Conference dinner. Fennessy, a wine research officer at the Department of Agriculture and Food WA, will compare the technique of pre-fermentation cold maceration to the production of Shiraz, Cabernet Sauvignon and Merlot wines in both warm and cool climates. While literature exists on the effectiveness of cold soak as a winemaking technique, little is known
about the suitability of this technique to different varieties in different regions. Fennessy anticipates the benefits of the project to industry will be improved wine quality, colour and aroma, improved efficiency in the winery and effective management of vintages of differing temperatures. “Mr Fennessy’s project addresses a key challenge facing all agricultural sectors, that being the ability to adapt to changing climates. His project critically addresses one of the Commonwealth’s national research priorities of an environmentally sustainable Australia,” GWRDC executive director, Dr Stuart Thomson said. “GWRDC supports the project’s focus on extension of research to generate improved practices in the winery that will assist businesses to be more profitable and sustainable.” Fennessy expects to conclude his research in November and a full report of research outcomes will be available on the GWRDC website in early 2014.
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MEP Instruments Pty Ltd Richard Fennessy, centre, with Dr Kim Ritman, ABARES chief scientist, left and the Minister for Agriculture, Fisheries and Forestry the Hon Joe Ludwig at the ABARES Outlook 2013 conference. Photo: Steve Keough Photography. April 2013 – Issue 591
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Grapegrower & Winemaker
From vine to bottle: sustainability a core value for Barossa winery Yalumba Wine Company is taking its sustainability programme to a new level by communicating and engaging with its stakeholders across the value chain. Kellie Arbuckle
“You’re only as sustainable as the weakest member of your value network.” So says Cecil Camilleri, sustainable wine programmes manager for leading Barossa winery, Yalumba Wine Company. For the past 20 years, Camilleri has been spearheading Yalumba’s sustainability programme. He has undertaken various research projects with the overall aim of making the wine company resilient and adaptive to a competitive wine market that is increasingly being impacted by climate change. In protecting the winery’s future, Cecil has devised methods for the winery and its people to protect the essential elements that make up wine – air, water, soil and energy – throughout Yalumba’s supply chain. Communicating and engaging these methods to Yalumba’s stakeholders (employees, the board, suppliers and consumers) has been the focus of Camilleri’s latest research, which concludes this month. “After five years of research on whether our sustainability programme was delivering, we found we weren’t communicating it as well as we could,” Camilleri said. “While we were on the right road towards sustainability, we were being burdened by not communicating with our stakeholders and we realised we needed to ensure our sustainability was well communicated and more engaging. “We all have to travel the journey of sustainability together. Everyone needs to be engaged and everyone needs to do their bit.” The research, undertaken by Camilleri at the School of Communication, International Studies and Languages at the University of South Australia, draws on Camilleri’s previous research, which formed the basis for Yalumba’s sustainability programme (‘Commitment to Sustainable Winemaking programme’). Until now, the programme had identified five pillars of sustainability: • land stewardship: Yalumba’s Vitis programme aims to promote economic production of grapes with maximum attention to environmental
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Yalumba’s five pillars of sustainability • • • • •
Yalumba Wine Company sustainable wine programmes manager Cecil Camilleri.
outcomes • product stewardship: Yalumba’s action plan demonstrates continuous improvement in packaging waste reduction and management • climate change mitigation and adaption: Yalumba has adopted a life-cycle approach to continuous improvement in energy conservation, efficient energy consumption, fuel substitution and clean technology • wastewater management: Yalumba has a programme to reduce, recycle and reuse wastewater produced from its operations • organisational citizenship: the company also has a program to raise awareness to its stakeholders on how to prevent or minimise negative impacts to the business. In achieving more engagement and communication with its stakeholders, Yalumba undertakes traditional project management techniques as well as a positive stance. Increasingly the company will focus on: • changing how people think, instead of what people do • supporting self-organising change processes that flow from new ideas • understanding how, through sensemaking and sense-giving, the meaning of sustainability is shaped www.winebiz.com.au
land stewardship product stewardship climate change mitigation and adaption wastewater management organisational citizenship.
by social interests and ideologies and how it is adapted as society changes. Camilleri said sustainability involves three integral factors: economical, social and environmental. “As a commercial organisation, we need to make sure we make a decent profit – one that is sound but does not compromise the life options of present and future generations. A profit that is based on optimisation rather than maximisation,” Camilleri said. “We need to balance our social and environmental responsibilities to make a profit, to ensure fair return of risk to employee and owner.” He said Yalumba’s commitment to social responsibility was based on its commitment to its employees, while its focus on the environment was about doing more with less. “Essentially it is to do with being very efficient at what one is doing in avoiding waste,” he said. Camilleri said Yalumba’s approach was entire post-modern and holistic – something he says any winery could stand to learn from. “If we can do what we’re doing, then anyone can. There’s nothing special to us other than that we’ve set our minds to be sustainable and to build on the positive things we are doing and address the things we are not doing properly,” he said. “The message is really simple: it is to do be very efficient at what one is doing in avoiding waste.” For more information on Yalumba’s sustainability programme, visit: www. yalumba.com April 2013 – Issue 591
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, winemaker for Tasmania’s Bay of Fires winery, was recently honoured with the top prize at the Sydney Royal Wine Show for his 2011 Pinot Noir. The wine was awarded the perpetual trophy for Best Wine of the Show as well as trophies for the Best Red Wine of Show and Best Varietal Wine, Pinot Noir. Born in Adelaide, Peter graduated at the University of Adelaide with a Bachelor of Agricultural Science (Oenology) while working at Petaluma during the holidays. He worked his first vintage in 1998 and has undertaken several vintages throughout Europe. What inspired you to become a winemaker and how have you got to where you are now?
I was very fortunate to land a position in the lab and cellar at Petaluma during my gap year after high school. Brian Croser told me to become a winemaker, so I did. As for where I am now, it’s taking the opportunities presented to you or the ones you’ve created and not looking back. It does, however, pay to look back occasionally then try to recreate a bit of mentorship, generosity and benevolence that you hopefully have been lucky enough to experience in this industry. Who do you think is the most influential person in the Australian wine industry?
Aaron Brasher, regional director, Australia and emerging markets for Wine Australia. He is so influential that he has not only written his own job title but his own job description for about the last three roles he’s assumed in the Australian wine industry. Go get ‘em, Brash! Which of your wines do you most enjoy making and why?
Chardonnay and Pinot Noir, simply because that’s what we do at Bay of Fires. We’re lucky enough to see a lot of different clonal material and subregional variation thanks to our dedicated growers. We also have the ability to vinify separately as required. I make the still and Ed Carr makes the sparkling. What is your favourite time of year in the winery and why?
Harvest time, of course. It’s what we all work towards. It’s a toss-up between tasting fruit on the pad or tasting ferments just after completion. Raw flavour, raw expression and it’s all happening at once under the one roof. Goosebump sort of stuff. Tell us about your most memorable winetasting experience.
Undoubtedly the Len Evans Tutorial. My wedding day or the birth of my first child may trump it, but I doubt it. Just keep on applying. What do you like to do when you’re not making wine?
Listen to music, preferably while being active outdoors. Music, and my passion towards it, is on par with wine.
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How do you de-stress after vintage?
It usually involves a lamb or pig on the spit, the vintage crew, dressing up, plenty of world-class wine (some masked), loud music and dancing. Then I read a book if nausea permits or watch Wes Anderson films. What keeps you awake at night?
Watching Wes Anderson films or playing vinyl 45s in a tent in my lounge room. What was the last big-ticket equipment purchase you made in your winery? Would you recommend the equipment to colleagues?
A 2t press to accompany the 10t presses at Bay of Fires. A whole myriad of small-batch or split-batch winemaking opportunities arise from a small press (I’m talking fizz-based and whites in particular). It also alleviates the confines of minimum 6-8t picks for our growers in Tasmania, should pickers not appear or it rains. What has been the best business decision you’ve made for your winery?
Expanding our contract winemaking clientele. We see greater diversity of fruit (and oak, occasionally) in our winery and we have broader discussions about style; occasionally you receive praise and get paid for it, all when there is mutual benefit to be had. Bloody brilliant. Which export markets are of most interest to you? What do you think is the key thing that will help you succeed in that market?
Bay of Fires is sold domestically in its entirety, so any export market has my interest. Small amounts of House of Arras offerings are working their way across Asia currently. Persistence appears to be the key here. What do you think of the Australian wine show system? Do you enter wine shows? Why/why not?
I adore the Australian wine show system. I have no doubt that the snippets of information born from discussions with journalists, sommeliers, sales and marketing representatives, international judges, viticulturalists and winemakers based in and around the shows have contributed to my awareness and ability as a winemaker. www.winebiz.com.au
I’ve been using Grapegrower and Winemaker as an informative reference for about 15 years, since I was student. It covers a lot of ground across the whole industry. What do you think is the Australian wine industry’s biggest challenge? What is your solution to the problem?
Convincing a greater number of wine lovers both here and the world over that we are on par with some of the world’s finest wines. The solution? One wine at a time, one year at a time, one tasting at a time. Across all price points and styles ... we all have a place. From a research and development perspective, is there one single piece of research in the wine industry that has really influenced you or your directions in winemaking?
Exposure to and the ability to vinify single clonal material from different subregions in Tasmania. It helps you respect the fruit for its heredity and ecology. The Ark question. The world is flooding ... which two wines (white and red) would you take onto the Ark?
A 1996 Salon Les Mesnil Blanc de Blanc and a 1999 Armand Rousseau Chambertin. Yeah I know, I should say 1963 Chateau Reynella Cabernet Sauvignon but I‘d have some cuttings in my briefcase to ensure Noah and I would eventually be making Australian-styled wine. He’d be under instruction and I’d take all the credit if the wines were well received amongst the menagerie but that’s okay because we’d both be drinking French in the meantime. April 2013 – Issue 591
sales & marketing US on-premise wine choice: what influences their wine buying decision? Dr Steve Goodman and Dr Cullen Habel
Lack of retail availability
Contribution to menu printing
Table ‘talker’/on table promotion
Press write ups and reviews
Medals and awards won
Match to food on menu
Listing fee/rebate paid by distributor
Tastes good (manager or sommelier likes)
April 2013 – Issue 591
of tables, to nominate which ‘1’ of the available choices ‘Most’ influences their decision, and which ‘1’ least’. There are a number of strengths to this – notably, the fact it is not a rating, it is a ‘best’ and ‘worst’, as such it is comparable across cultures, ages, genders – most is most and least is least, whereas scoring on a 1-7, some people’s 5 is someone else’s 7 (See Goodman 2009 and Cohen 2009 for a full description of the method). It gives you clear insights into the strength of the influencers, twice as much or three times as much, rather than a difference between 4.2 and 4.7 – something which carries very little practical implication. It means that generating simple bar graphs generates outputs where differences (and hence possible opportunities) can be quickly identified. Figure 1 shows the results at the sample level. ‘Tastes good’, as judged by the manager or sommelier is the most important influencer, followed by a ‘match to food’. Interesting is that ‘margin’ was the third highest influence behind these two, the same ranking of influence as in the off-premise data. So margin is still important but not ‘the most important’. Who the distributor is is a big decider in the decision, so the age-old sales adage of ‘relationships with customers’ holds true. In our consulting experience we have seen wineries with very good relationships with their distributors – and investigation has shown that the distributors have not always had good relationships with the trade. Which would you prefer?
At a sample level, active ‘marketing’ assistance from wineries, such as ‘point of sale material’ and ‘menu printing’ were the two lowest influencers. One of the fundamental thoughts behind segmentation is to break a market down in order to identify different segments that lend themselves to crafting different strategies or offers – and even to identify where similarities exist so that offers can be left the same. The notion of ‘standardisation vs. adaptation’ is at the heart of market strategy. Figure 2 shows the results of the segmentation by region. Similar to the off-premise results, the midwest and the north east have quite an overlap of similarity compared to the remaining regions. They are much more influenced by ‘Food matching’ than other regions. Yes, we all know the US is a big market, it’s a lot to cover – but rather than just geographic, look at what is more likely to influence decisions in your favour at the location level. When we looked at the segmentation using ‘type of restaurant’ (Figure 3), we see that there are some substantial differences between family/casual restaurants and fine dining. Fine dining, not surprisingly, are far more influenced by ‘matching food’, ‘taste’, ‘region’ and ‘vintage/aged wines’. The inroad this offers for wineries to approach fine dining with their own museum stock is an opportunity that confirms the most aspirational marketer’s opinion. What is interesting is the extent to which casual dining establishments are influenced by ‘margin’, ‘grape variety’ and ‘brand’. Even
100 90 80 Relative Importance (%)
This paper is one in a series from research funded by the GWRDC to examine the decision influencers along the wine supply chain. Previous papers have discussed the Chinese market and US and Australian distributors. They are available through the University of Adelaide Wine 2030 Research Network (www.adelaide.edu.au/wine2030). Email email@example.com for more information. On-premise is seen by so many as the path to building their wine brand (or even just selling some wine). The lack of retail oligopoly means there are so many more decision makers and so much more chance to sell wine than in a retail market dominated by big retailers, big buying groups and big distributors that have access to the lucrative sales volumes. Understanding the on-premise market then becomes of paramount importance. Too often, the wine trade market is divided in two – on and off premise. This research has looked at trying to understand both markets more – this paper presents some of the results from the US on-premise data. The research approach has been covered in detail in previous papers, (Goodman 2012 – Australian Data; Goodman & Altschwager 2012 – China Data, Goodman & Habel 2013-US Distributors – contact author for details) so a brief outline here only. An experimental design was used to ask those involved in the US on-premise trade the question, ‘what influences your decision when buying in a new wine’. The method used is called best:worse, where people are asked, across a series
70 60 50 40 30 20 10 0
13 5 11 Attribute number
Figure 1. Decision influencers – USA on-premise. www.winebiz.com.au
Grapegrower & Winemaker
sales & marketing
Steve Goodman, senior lecturer in marketing at the University of Adelaide Business School, specialises in wine business research. firstname.lastname@example.org Cullen Habel, independent market research consultant and adjunct lecturer in marketing and market research at the University of Adelaide: www.cullenofadelaid.com
100 Midwest (50) North East (42) South East (30) West Coast (31) South West (24)
Relative Importance of Each Attribute
Attribute Number Figure 2. Decision influencers – by region.
100 Fine Dining (n=46) Family casual (n=92) 80 Relative importance of each attribute
moreso – the fact that ‘lack of retail availability’ is much more an influence in casual/fine dining than fine dining – this appears counter to most wine marketers’ intuition and also represents an opportunity for exporting wineries to actively target larger groups of casual/ family establishments. Whilst not all restaurants will discuss their mark up with you, a scout through their wine list and a comparison to retail will enable you (and your distributor) to determine a high mark-up restaurant vs. low mark-up. Figure 4 shows that there are some differences between restaurants when you segment by markup. Higher mark-up restaurants are far more influenced by ‘grape type’ and ‘origin/ region’ – but also by ‘press write-ups’, ‘medals’ and ‘vintage/aged wine’. It doesn’t matter how many times we do analysis using choice experiments – we see differences when we segment. Okay, we’re researchers and we live in numbers- but as marketers, it reinforces what we teach – ‘get to know your customers’. Know who you are talking to, understand their needs, as consumers or business customers. Understand their business, ask them, talk to them AND LISTEN. That way, in the spirit of marketing thought, you’ll be able to look at what you do, how it fits in with those you are trying to sell to and then adapt to create value for all concerned.
Attribute Number Figure 3. Decision influencers – by restaurant type.
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lower (<50%) Markup (n=51) higher (100+%) Markup (n=98)
public relations web social media packaging direct marketing T +61 2 6365 8141 M +61 414 736 342 E email@example.com
Relative Importance of Each Attribute
Attribute Number Figure 4. Decision influencers – by markup.
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April 2013 – Issue 591
Rich history is narrated via truly stunning label design
Founded by Scott Larritt and Adam Lana in 2003, and joined by Jose Maturana in 2007, Swear Words helps create powerful brands, websites and visual communication pieces that improve its clients’ offering to their customers, the media, trade and peers. Based in Melbourne, Swear Words has clients in Auckland, London, Bangkok, Los Angeles and New York. The company has partnered with some of the Australia’s most recognised brands: Crown Lager, Rosemount Estate, BMW, Deakin Estate, Grays Online. It has also worked closely with a long list of boutique brands in the food, drinks and lifestyle sectors.
What inspired you to work in design, and what aspect of label design do you enjoy the most or derive the most satisfaction from?
I didn’t actually choose to work in design, it just happened that way. I guess I have an affinity for it and the perfectionist in me has driven a desire to create unique and thoughtful pieces of communication that are differentiated and hopefully inspiring. Label design is an extremely difficult discipline due to a couple of factors. Primarily, wine communication, especially at lower price points, has to be conservative because of a general lack of wine education in consumers. However, this is slowly changing and traditional cues are being deconstructed and reinterpreted in interesting ways. We find people are using label design more and more as the primary motivator in their purchase, however, people expect wine in a glass bottle with a label − anything else is a very hard sell. Secondary are the physical and production limitations of the wine label. Manufacturing and applying labels, especially at smaller quantities, is an expensive process. There is always a balance between level of finishing and cost − it is often the difference between a good and a great label – but for the producer it boils down to the bottom line, which is often slim. The proportions of a label are confined by mechanised label applicators, so your canvas is more or less pre-determined. So your task is to create a stunning and differentiated label, using minimal finishings, with the least number of inks in a predetermined space.
this sense of place and the rich history of the vineyard was the top priority with the label design. What are the technical specs used in the production of the label, i.e., printing technique, processes and colours?
The label is printed in two colours with a gold foil and gloss UV screen. What are the most important labelling concepts to impact on wine sales and marketing success?
Staying ahead of trends and offering something unique and memorable, but not too challenging, creates visual communication that encou rages consu mers to engage with it. This is a successful design, however it’s the quality of the product that governs subsequent purchase.
What was the inspiration or key branding message behind this particular wine label?
Have you seen many changes in label designs over the past decade and what labelling trends do you see emerging into the future?
There is a great narrative to St Leonards, a story that was not being told with the existing label artwork. Communicating
Labels have moved from a conservative European style, through a dalliance
April 2013 – Issue 591
with whimsical illustrative styles and photography, to a contemporary, bold, type-driven simplicity. The future sees more simplicity and honesty in label design, with an increased emphasis on specialty varieties and unique winemaking techniques and terroir. To what extent do countries respond differently to labels and/or wine marketing images?
There are huge differences in responses that are very complex and difficult to understand at both a cultural and individual level. In my personal experience, I have found that concepts translate well but executions often miss the mark. How can label designers overcome the challenge of helping a wine bottle stand out as the market becomes increasingly congested?
Less is always more. Keep it simple, focus on a single message and use negative space. I think having a unique hook, a simple and engaging narrative, makes all the difference. Grapegrower & Winemaker
sales & marketing
Wine label redesigns: what to consider The wine industry is no stranger when it comes to revamping important elements of brand design. But what are the dos and don’ts of a label redesign? Grapegrower & Winemaker speaks with a designer, researcher, retailer and a winery to find out. Kellie Arbuckle
A GOOD LABEL redesign can have a positive effect on business, with new Bottling & markets and even labelling increased sales. A poorly designed label can have the reverse effect. There are various reasons why wineries choose to redesign their labels but whatever the reason, undertaking a redesign is a critical decision that demands serious consideration and professional advice.
Considerations According to Rowena Curlewis, managing director at The Collective Design Consultants, the first and foremost consideration boils down to what makes the winery unique. “One of the key things we ask clients
who want to redesign is to tell us about the brand story,” Curlewis said. “We want to know what’s fundamentally different about your wine, vineyard and philosophy that is going to resonate with consumers and trade – and is real. We can make up all kinds of stuff but consumers will ultimately see through that, so we need to know what it is that differentiates your winery from someone else.” The Collective Design Consultants was responsible for the design of Taylors Wines Winemaker’s Project Clare Valley GSM 2010, which won the top design award at Australia’s Wine Industry Design Competition last year. After establishing a point of difference, the winery needs to consider its overall objective. “If they’re trying to retain their current consumer base because they’ve noticed a drop off, we might recommend what we
call an ‘evolutionary redesign’, which involves incremental steps to redesign the typography, label colouring and other elements,” she said. “If they want to retain their consumer base and attract new consumers, then we might suggest what we can an ‘evolutionary revolution’, where we show them how to evolve their package by taking gradual steps. Eventually the whole design is revamped and the wine might even have a new name.” Dr Roberta Veale, senior marketing lecturer at the University of Adelaide, is known worldwide for her research into consumer wine preferences. She says the front wine label is the most important aspect on the bottle – and is sometimes more important than the wine, itself. “The ability of the label to overcome people’s sensory perception of wine is
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well documented. They will absolutely pay attention to it and compare it with other bottles near and around it, and if they haven’t got a good reason to buy it then a good wine can easily be passed over because it has a bad label,” Veale said. She said wineries need to consider how consumers perceive their current label design and how it compares with the competitors. “You know what you want people to think of the design, but the only way to find out what consumers think is to test it and then make changes as necessary.”
Common mistakes According to Curlewis, there are a number of approaches wineries should avoid when considering a label redesign – copycat designs being one of them. “Wineries sometimes come to me and say ‘I want to look like this design’. This is not in anyone’s interest,” she said. Thinking you can double sales by slightly tweaking the label is another common misconception, along with the idea that wines of different varieties need to be colour coded. “This doesn’t work because it doesn’t take into account that consumers don’t
see their range sitting side by side. It also brings in a mass market feel which is not appropriate above the $12-14 price point.” Veale says wineries that think they can design their own label are risking brand suicide. “A good label is the product of someone who knows what they’re doing and is trained to do it,” she said. Tampering with the wrong elements of a label is also an area to be mindful of. “If you have a wine that’s doing quite well and you have well established symbolism to it, then tampering with that can disengage some of your loyal customers,” Veale said.
Impact Kyle William Crick is the owner of Mogo Village Cellars, a small independent wine store on the south coast of NSW. The objective of the store is to uncover the most exciting developments in Australian winemaking and to share them with like-minded customers. Crick says he chooses wines based on two things: the label and the quality. “It has to look good – if it doesn’t enamour me in any way, then it won’t matter how tasty the contents of the juice is. It’s fifty-fifty for me,” he said.
Left, the old label design by Schild Estate next to the new design, right.
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www.portavin.com.au email@example.com April 2013 – Issue 591
Grapegrower & Winemaker
sales & marketing
Hot off the press – smaller wineries try digital printing for short label runs Digital printing technology is providing smaller wineries with the flexibility to have labels printed quickly without risking quality or hurting the hip pocket. Kellie Arbuckle
WINERIES WITH SHORT label runs are embracing digital technology for its ability to print quality labels on demand at a cost-effective price. Unlike traditional methods, which require the production of plates which lifts the overall price, digital printing is a directto-paper process that starts from artwork files stored in a digital medium. As a result, digital printing is considered quicker and less expensive. The benefits are particularly true for wineries that require short label runs fast to meet tight deadlines. “Digital printing is cost effective, especially for smaller runs where traditionally the customer would be paying for a set of printing plates that aren’t required for the digital process,” says Damian Hamilton, director for graphic design firm Sage Visual Solutions. “It offers value benefits at lower print volumes and flexibility with low set-up cost and quick change overs,” he said. While new to Australia, Hamilton says digital printing Read Label Advert.pdf
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technology is likely to increase among suppliers as demand for fast, quality labels increases. “Digital printing was once considered a compromise. However, those that have invested in the latest technologies are printing at quality levels equivalent to the best results from conventional print,” he said. “Embellishments such as foiling, embossing, varnishes and a wide variety of substrates are available as digital print solutions. Digital printing also has the ability to offer variable printing which means each printed piece can have different information on it, providing personalisation and customisation unmatched by other processes.” Victorian-based printer Read Label invested in digital technology about three years ago as part of its renewed focus on short-run label printing for niche market clients in need of fast turnarounds. Read Label owner Ross Read says the company “hangs its hat” on its HP Indigo press. “The reason we selected the Indigo was because it gives the closest reproduction of traditional printing. From a customer’s point of view, that means the transition from traditional printing through to digital output is pretty much seamless; the appearance and feel of the label remains the same,” he said. “Now with quick set-up times, we’re able to offer a consistent product quickly which means customers can be flexible with upgrades, changes and trends as far as promotions or limited releases go.” Read says digital printing is taking off in the Australian wine industry. “It’s a huge change to the market. It’s been around now for the best part of 10 years but it’s really only been gaining traction over the last five. The trend is most definitely digital,” he said. Graphix Labels and Packaging has also adopted digital printing in an effort to support small to medium sized clients. Starting out as an offset printing house, Graphix pioneered the Xeikon dry toner system in 1997, then, after developing a strong client following, upgraded to HP Indigo wet ink technology in 2003. The company now has the latest HP Indigo WS6000 print systems and dedicated finishing presses to add embellishments like hot foil, screen print, embossing and lamination. Graphix wine division manager Neil Fisher says the major advantages of digital printing are its speed, price and quality. “We can literally tell the machine to finish on one label type and start the next label in the same job, without the press having to stop, which is a huge labour saving,” he said. “Printing is achieved by a four-colour process, so there are virtually unlimited colours available, all at the one price structure.” Another benefit, he says, is the ease associated with producing physical colour proofs on the selected stock before running the job. “This is a major advantage for designers and clients who are not sure of the particular colours, colour combinations or strength of print they’ve nominated.” It’s not all picture-perfect, however. According to Fisher, digital
April 2013 – Issue 591
sales & marketing printing is not without its limitations and, in some cases, traditional printing can be more advantageous to the winery – depending on their requirements. “The most notable downside is the absence of metallic offset ink capability, but this is currently being solved and we will see a quantum shift in what digital can achieve in the near future,” Fisher said. “Digital print technology currently prints slower than conventional presses, so there is a limit to economy of scale when a job volume reaches a certain level. This is not an exact science, so we frequently quote on our two systems to derive the best price outcome for the client.” Despite the limitations, Fisher says the technology is moving quickly and he is confident it will continue to grow in the wine sector. “Digital offset technology is moving very fast, metallic inks are nearly ‘there’ and press speeds have increased dramatically. On that basis, we believe that digital technology is indeed revolutionary and will have a growing impact on the Australian and world printing scene in a relatively short space of time,” he said.
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Flynns cut printing costs with digital Flynns Wines is a small winery based in Victoria’s Heathcote region. Up until the middle of last year, the winery relied on traditional printing for its wine labels, including its James Flynn 2010 Heathcote Shiraz, a limited-release wine. But after comparing traditional with digital printing services, Flynns Wines owner Greg Flynn found digital was the way to go. “Not only was the price dramatically different, but the quality was better and the colours were stronger; the black was blacker and the burgundy was more vibrant,” Flynn said. “The price difference would be close to half on the first print that we did.” Flynn, whose labels are now printed by Read Labels, says digital printing is good for the small guys. “Traditional printing requires very large runs to be viable price-wise, whereas digital can do small runs at a very good price,” he said. He says wineries can often be discouraged from leaving traditional printers for another due to the expense, which can be in the thousands, in setting up new plates at another company. Despite this, he thinks it’s only a matter of time before printing companies adapt to digital. “The companies with digital have the edge – they provide the same result at a much lower price. It will also save a lot of wineries from going offshore for their printing; it might even bring them back to printing in Australia.”
April 2013 – Issue 591
business & technology Adapt and innovate in a challenging wine business world South Africa looks at how to stay at the forefront of the global wine business by harnessing its unique skills and position.
ADAPTATION, ENTREPRENEURSHIP AND innovation were the keywords during the recent Nedbank VinPro Information Day in Somerset West, where top-notch experts from diverse fields shared their views. This followed a volatile year in the wine business, as low profit margins, decreasing bottled wine sales and a shrinking area under vines persist. Altogether, 570 delegates from the whole wine industry value chain attended this event, presented for the eighth consecutive year by VinPro, the wine producers’ representative organisation. Nedbank senior economist Nicky Weimar started proceedings by stating that the 2013 economy is expected to be very similar to that of 2012, as production in general is under strain and domestic spending is growing. With the country’s total imports exceeding exports, the economy becomes unsustainable and the rand is yet again under severe pressure. The recent strikes proved not to be the only problem – domestic spending has outpaced production and although consumer debt is 76% of income, consumer spending is still rising. Scenario planner Clem Sunter explained three ‘red flag’ scenarios, which firstly pictured a globally flat economy for the next 10 to 15 years; then a new world economy in which the world’s attitude toward Africa has changed and the economy grows three times faster than the normal rate; and the final flag, one of upheaval and violence. Sunter’s advice is, “Keep the majority and minority together. For that, you need an inclusive leader. Create a balanced economy, create jobs through investing in innovation and entrepreneurship. And finally, create a climate to help stimulate small business”. With regard to the 2013 wine grape harvest, Francois Viljoen, VinPro’s consultation service manager, stated that the extraordinary hot and windy weather during December 2012 had an impact on the growth of winegrape vineyards, but with minimal sunburn damage. “However, thanks to the outstanding 2012 winter and the favourable preharvest weather conditions, we expect a very promising harvest of 1,379,352 April 2013 – Issue 591
From left, Dr John Purchase, CEO of the Agricultural Business Chamber; Rico Basson, VinPro executive director; Carolyn Barton, national wine buyer at Makro; Clem Sunter, chairman of the Anglo American Chairman’s Fund; Daneel Rossouw, divisional manager agriculture at Nedbank business banking; Dr Johan Bruwer, WineValueChain Insights; Francois Viljoen, VinPro consultation service manager; Abrie Botha, VinPro chairman. Photo: Barry Lambrecht.
tonnes – the third biggest in history and only 1% smaller than the 2012 harvest,” Viljoen said. According to Makro wine buyer Carolyn Barton, 2012’s retail trends will continue well into 2013. “The market reality is that domestic share is up 3%, but producers are under pressure, which makes it difficult to stand out with your brand. You have to engage with shoppers and back winning formats. Don’t miss any opportunity; focus on selling, not marketing. Put less effort into where the product came from and more effort into where it’s going. Work within trends.” Rico Basson, executive director of VinPro, added that of the top 10 industries in agriculture, the wine industry is the biggest employer of permanent workers. “This has to work in our favour. We need a closer partnership with government. We have the ability to earn foreign currency revenue, as well as increase productivity and be a multiplier of jobs in the value chain. “We create jobs and contribute to economic development; we will also keep on transforming and focusing on social responsibility. But we need government to step in by providing safety, creating an environment for investment, facilitating trade strategy and programmes to train and increase productivity, as well as investing in research, water supply, infrastructure and resources.” For Dr Johan Bruwer from www.winebiz.com.au
WineValueChain Insights, South Africa is at a tipping point. His advice? More control of the supply chain at the right margins, the right vineyard economics relative to the wine’s retail price, as well as brand ownership, especially amidst the bulk wine tsunami. “Producer consolidation needs to take place to control grape to glass. Innovation is also needed – especially with lower alcohol wines sold at lower prices to dodge the tax bullet. As for the Chinese wine market, you’ve got to be in it to win it, but don’t gamble. Focus on the US market – the pulse of the world wine market for the next five to 10 years – and remember, bulk is here to stay; fit it into your business model or diversify.” The message from Dr John Purchase, chief executive officer of the Agricultural Business Chamber, was that integrated, cohesive and coherent evidence-based policy development is needed in South Africa. “Business as usual is not sustainable, if you want to continue making a living in agriculture and grow your enterprise,” Purchase said. “We have reached a crossroad into broader transformation of the sector. Agribusinesses will need to deal with tough questions this year. There certainly are opportunities in agriculture and the wine industry specifically – just be smart and adapt.” Download the presentations at www.vinpro.co.za Grapegrower & Winemaker
appointments & accolades Russell Barratt appointed new CEO of Nugan Group
Perfect score for 2008 Penfolds Grange Shiraz
Seppeltsfield changes ownership structure
Nugan Group’s long-time CEO Michelle Nugan has retired after a 27-year career in the role, which has been filled by Russell Barratt. In making the announcement, Michelle thanked her three children for their support during her early days as CEO and credited Barratt’s professionalism. “Russell Barratt is an exceptional CEO, having been part of the leadership team that led the value-added growth of SunRice and more recently the turnaround of Accolade Wines as commercial general manager Australia and New Zealand,” she said. “I am confident that with Russell at the helm, Nugan Estate will continue to be one of Australia’s great family wine brands and I look forward as director of the Nugan Group to watching this exciting new chapter in Nugan Estate’s story unfold.” Barratt honoured Michelle’s inspirational reign since 25 February 1986 – transforming a struggling business into one of Australia’s great family success stories it is today.
Influential US wine publication the The Wine Advocate has scored the 2008 Penfolds Grange Shiraz 100 points. On top on this, 27 wines from Treasury Wine Estate (TWE) brands Penfolds, Rosemount, Wolf Blass and Wynns received scores of 90-plus. Robert Parker was the first person to implement the 100 points rating system for wine, which has been carried forward by The Wine Advocate’s current editor in chief, Lisa Perrotti-Brown. In her review of the 2008 Penfolds Grange Shiraz, Perrotti-Brown states: “Deep purple-black in colour, the 2008 Grange puts forward a very complex nose packed with aromas of mulberries, layers of baking spices, cloves and cinnamon with nuances of minced meat, anise, potpourri and whiffs of dried mint and chocolate. It is framed by firm, grainy tannins and a refreshing acid line before finishing very long with aniseed and lingering blackberry preserves notes. This is clearly a wonderfully opulent and a magic vintage for this label. Drink it from 2018 to 2035-plus.”
Barossa Valley winery, Seppeltsfield, has moved into a new generation of ownership structure, with Warren Randall becoming majority shareholder. Randall, the estate’s current managing director, has acquired more than a 90% share in the business. The acquisition involves the purchase of Seppeltsfield shareholdings from Clare Valley winery, Kilikanoon and Bruce Baudinet. Baudinet, along with Kilikanoon partner Nathan Waks, Janet Holmes à Court and Greg Paramor, led a consortium that saw the original purchase of Seppeltsfield from Fosters Wine Estates in 2007. Waks will retain a personal stake in Seppeltsfield and will remain a director, while the transaction will also see fourth generation Barossan, Carl Lindner, acquire an ownership share. Lindner will take a seat on the Seppeltsfield board. Warrick Duthy, appointed to the Seppeltsfield board in 2011 as chair, will also join Baudinet in retiring from executive duties. Both will now continue to execute their roles with Kilikanoon, as the winery too moves into a new generation.
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Wine Australia announces partnership opportunities for 2013-14 AUSTRALIAN WINE PRODUCERS, brands and state and regional bodies will have the opportunity to partner with Wine Australia on a range of new activities in key markets around the world from July, as part of the latest Market Programs Prospectus User-Pays Activities 2013-14, released last month. The partnership opportunities are aimed at educating and engaging the global network of importers and distributors, independent and chain representatives, hotel sector food and beverage professionals, on- and offpremise professionals, media and consumers in Australia and key global markets, to help build and grow the Australian wine category. Wine Australia’s general manager, market development, James Gosper, said the new program of user-pays activities would help achieve greater reach for and alignment of the industry’s promotional efforts.
“We invite the industry to join us in a collective approach to engaging with the global wine trade, media and consumers to showcase the quality and diversity of Australian wine and get more quality Australian wines on the world’s retail shelves and wine lists,” Gosper said. “Our user-pays activities provide an equitable, cost-effective approach for our wine producers, brands and state and regional partners and enable producers of all size to reach influential trade, media and consumers via our global network. “This year we’re introducing some bigger initiatives including opportunities to get involved in Savour 2013 – our first ever global Australian wine forum, consumer events, retail promotions, promotional features in magazines and advertorials, alongside our annual trade events and tastings. “In response to industry feedback, we’re providing our new program of
activities earlier in the year so our industry partners are able to factor it into their forward planning. We’ve also introduced a new, easy way to sign up and pay for user-pays activities via our website,” Gosper said. “We received a very positive response and strong sign up to our first program of user-pays activities launched last year. These initiatives are currently underway in all our markets and include the Next Chapter events in the US; an Australian stand at the upcoming Prowein in Germany; an Australian pavilion at the upcoming China National Food, Wine and Spirits Fair later this month and Aussie Wine Month in Australia in April.” The new user-pays prospectus is available from the Wine Australia website and can be viewed at http://ow.ly/iQnUm
Reducing the cost of workers compensation in the wine industry Employers Mutual is a recognised industry leader in workers compensation case management services. We are proud of our partnership with the South Australian Wine Industry (SAWIA) and offer its members tailored solutions and products to improve return to work outcomes and help reduce the cost of workers compensation.
Our key services include: • Claims and injury management • Member Benefits Program • Employer education and training programs • Employer onsite visitation program • Employer reporting tools to help you manage your claims
Member Benefits Program We have supported employers in the South Australian wine industry by allocating $300,000 in funds through our Member Benefits Program over the past 4 years, to establish workplace health and safety programs to minimise the impact of work related injuries and illness. Projects have included the creation of an industry wide job dictionary, development of a prototype for the efficient and safe handling of wire in vineyard fencing and trellis erection and maintenance, and the creation of an interactive work health and safety induction and training DVD for use across the industry.
For further information contact us toll free on 1300 365 105 or visit our website:
www.employersmutualsa.com.au April 2013 – Issue 591
Grapegrower & Winemaker
business & technology
Evolution of digital marketing IN 2013 THE technology to deliver digital solutions to small and IT & website medium enterprise is here now. The challenge design for the grape and wine industry is to leverage these innovative technologies to take advantage of the growing opportunities afforded within this medium. Many business owners believe websites do not offer an advantage for their product or service, however, while this may have been the case in the past, times have changed. The internet is intertwined in nearly every aspect of our lives. We use it to gather information, research products, evaluate purchase options, locate an address, learn about a company, and more. Your customers do the same thing, so if you are not taking advantage of your online presence, then your business may be losing out.
Year of the mobile Consumers are spending more time and money on their mobile devices than ever before, with the mobile phone often being the device of choice for online engagement, browsing and purchasing. As a consequence, there are many tools available such as location technology, social media and other behavioural data to orchestrate ‘mobile marketing’ which can help brands to reach out and connect with this mobile audience. Consumers now have an expectation that serious businesses will have a mobileoptimised site to share their information or promote their products or services. If you don’t have a mobile-optimised site, the presentation of your businesses on these devices may be compromised, poorly presented or impossible to access. As far back as May 2012, the official
Google blog* reported that 86% of smartphone users in Australia look for local information on their phone and 88% take direct action as a result (such as visiting or contacting the business). With an overwhelming number of Australian consumers now having internet-enabled phones, the implications for your business are obvious. The customer’s journey – whether they are using a desktop, laptop, mobile phone or tablet to search your content – should be seamless and each should play to its strengths. To achieve this all your digital platforms must talk to each other and synchronise with the overall marketing strategy you have for your business.
Consumers are spending more time and money on their mobile devices than ever before, with the mobile phone often being the device of choice for online engagement, browsing and purchasing. Andy Phanthapangna Head of Digital Strategy, WorldWeb Management Services
How good does your website really need to be? WorldWeb Management Services is a major sponsor and a recognised digital strategy partner of the South Australian Wine Industry Association (SAWIA). The partnership assists the wine and grapegrower industry to individually market products and services online
and take advantage of the growth opportunities this provides. WorldWeb believes that your online representation needs to be just as good as you are. Nothing deters a potential customer more quickly than going to a website that is poorly designed, poorly written, unattractive or not optimised for the correct devices. In fact, a poor web presence will not only reduce online marketing potential but will also provide a poor customer experience with a subsequent negative impact on your brand. Just as you would not allow customers to see your office with peeling paint, dirty carpets or broken windows, neither should you allow your customers to visit a website that is confusing, poorly written or just plain bad. As a major industry sponsor, WorldWeb provides a means for the industry to have easy access to current online marketing solutions. To do this WorldWeb is making available close to $100,000 worth of websites for the industry, with heavily subsidised setup rates. With this mandate, a total of fifty ‘website station online shopping package’ websites valued at $1990 (ex-GST) each have been made available for the wine and grapegrower industry. These fully functional websites will be offered to industry (limit of one per registered grape and wine industry member business) at a subsidised setup rate of $197 (ex-GST) (plus $85 ex-GST/month hosting fee). Images of this website can be viewed online at: www.worldwebms.com.au/ grapeandwine Contact firstname.lastname@example.org or call Andy Phanthapangna on 08 8215 0020 for more information. * h t t p: //g o o g l e - a u.b l o g s p o t.c o m . a u /2 012 /0 5 / smartphone-revolution-isnt-coming-its.html
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April 2013 – Issue 591
Luxury wines enjoy growth surge in Asia
IN MARKETS SUCH as the US, China, the UK, Canada and Australia, there is a growing trend in the sales of luxury wines. These are wines priced at A$30 per bottle and above in the Australian market or the equivalent of A$10 per litre (FOB) and above for exported wines. According to Nielsen, sales of Australian wine in the domestic offtrade market at A$30 per bottle and above grew by 8% in 2012. The growth rate was similar for exports with the volume of Australian wine exported at A$10 per litre and above growing by 7% over the same period. Export markets make up the vast majority of the Australian luxury wine sales, with an estimated share of just over 80%. China and Hong Kong are driving the growth in Australian exports of luxury wines. China is now the biggest destination for these wines and exports grew 40% to 4.7 million litres in 2012. Hong Kong is ranked in second place and exports grew by 30% to 1.8 million litres (see Figure 1). The growth in Australian luxury wines exported to China and Hong Kong over the past five years has been extraordinary. From 2007, exports to China grew almost seven-fold and to Hong Kong almost three-fold. Australia is well placed to continue this strong growth to these two markets. In contrast, the US has fallen from first to fourth place over the same five-year period. Volumes fell from 6.7 million litres to 1.4 million litres. A combination of factors has contributed to this decline, such as the advent of the GFC and the rise in the value of the Australian dollar against the greenback. However, the US market for luxury wines continues to grow and is one of the biggest in the world. But Australia is significantly under-represented in this segment of the US market. Exchange rates aside, the feedback from Australian wine companies participating in the market is that the biggest challenge is the apparent disconnect between the wine trade and consumer perceptions of Australian wine in the US. Australian premium wines are struggling to find favour through the supply chain but not necessarily with April 2013 – Issue 591
Figure 1. Top 10 export destinations for Australian luxury wines (litres). 2011
Source: Wine Australia.
consumers. Wine Australia recognises these challenges and is assisting the wine sector in revitalising the Australian category in the US through a number of market program activities and in-market research. The US market program activities this fiscal year aim to build trade and distributor confidence in the Australian category. All programs will leverage industry and government partnerships to reach broader and deeper across the US industry. The 2013 program kicked off with a ‘Next Chapter of Australian Wine’ trade tasting in January 2013, followed by a multitiered ‘Next Chapter’ public relations campaign through the spring 2013 to showcase the current and upcoming offering from Australia, from popular to luxury priced offerings. Activities also include showcasing diversity and regionality, via a national retail promotion with Cost Plus World Market, a consumer eve nt program for leading national restaurant group, Landry’s, and having a strong Australian presence at Food & Wine’s Aspen Classic. The US program will importantly roll out a new Market Access effort to help wineries better understand, enter and navigate the US market. Apart from these new market initiatives, the successful Sommelier Immersion Program (SIP) will continue. In addition to the marketing activities, in the first half of 2013 Wine Australia will be conducting a research project on the US trade barrier/blockage. With funding provided by the GWRDC, the project, ‘Barriers in the US trade in developing www.winebiz.com.au
premium Australian wine sales’, will provide insights into the motivations and drivers of major players in the trade (importers, distributors, retailers and restaurants). Qualitative and quantitative research will be conducted by Wine Opinions with leading trade gatekeepers in the key trade tiers and geographic areas of the US that are critical to the future success of the Australian wines category. Among the areas to address include how they perceive the Australian wine category – strengths, weaknesses, opportunities and threat – and how can the Australian wine category work to improve? While there has been significant growth to China and Hong Kong, there are some emerging opportunities in the US and great potential to reinvigorate the market. As an industry, we need to collaborate and pursue a unified strategy to take advantage of the changing marketing conditions, excite the trade and grow and defend our market share. Ultimately, we need to activate the trade and see more quality Australian wines on wine lists and retail shelves. For more information on Wine Australia’s US market programs in 2013, please contact Wine Australia’s director North America, Angela Slade at email@example.com. For more information on the US wine market, visit the winefacts page on www. wineaustralia.com or contact Wine Australia on 08 8228 2010 or info@ wineaustralia.com. Grapegrower & Winemaker
Australian Wine Export Market Snapshot The Australian Wine Export Market Snapshot is prepared by Wine Australia and provides the latest key statistics on exports of Australian wine. Updated monthly, the snapshot looks at the movement in total volume and value
for the past 12 months and then drills down into more detail such as the top five destinations by value growth, movements in container type, colour, winestyle, and price point, and the top five varietal and regional label claims on bottles.
The main purpose of the report is to provide some high-level trends for the Australian wine category. For more information please visit www. wineaustralia.com/winefacts, email to info@ wineaustralia.com or ring 08 8228 2010.
Highlights â€“ year ended February 2013 Key statistics Total
Value A$M (fob)
Destinations (by value growth)
Germany, Federal Republic
% point change
Container type (by volume)
% point change
Still wine by colour (by volume)
% point change
Red still wine
White still wine
Price points (by volume)
% point change
Wine style (by volume)
$A2.49/L and under 2
$A2.50/L to A$4.99/L
$A5.00/L to A$7.49/L
$A7.50/L to A$9.99/L
$A10.00/L and over
Top five varietal label claims on bottles (by volume)
Shiraz and Shiraz blends
Chardonnay and Chardonnay blends
Cabernet Sauvignon and Cabernet Sauvignon blends
Merlot and Merlot blends
Sauvignon Blanc and Sauvignon Blanc blends
NOTES & DEFINITIONS Prepared: March 2013, updated monthly Alternative packaging includes flagon, tetra, PET and other packaging types The growth in this segment is due to growth bulk shipments as more Australian wine is being packaged overseas for a combination of reasons, including economic, environmental and scale rationale together with meeting the requirements of some customers. The change in share represents percentage point change in share between the current twelve month period compared to the preceding 12 month period. Based on data compiled from the AWBC Wine Export Approval System. Average Value ($AUD) calculated on FOB value. Free on Board (FOB) value includes production and other costs up until placement on international carrier but excludes international insurance and transport costs. Data is based on wine shipped from Australia to the country of destination - in some instances, wine is then transshipped to other countries for consumption.
Top five regional label claims on bottles (by volume)
South Eastern Australia
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April 2013 â€“ Issue 591
looking forward 2013 Australia & New Zealand April 25 Avoca ANZAC Day Races. Pyrenees Region, VIC. www.avocaraceclub.com 26 Savour the Strathbogies - Meet the Makers Tasting & Dinner. Euroa, VIC. www.strathbogierangeswine.asn.au 26 Zema Estate - 'Past, Present and Future'. Coonawarra, SA. www.zema.com.au 26-5 May Daylesford Macedon Produce Harvest Week Festival 2013. Daylesford, VIC. www.dmproduce.com.au 27 Go Grazing. Mudgee, NSW. www.mudgeewine.com.au 27 Seriously Shiraz - A Taste of the Grampians. Ballarat, VIC. www.grampianswine.com.au 27 Upper Goulburn Vintage Celebrations - A Day on High. Mansfield, VIC. www.uppergoulburnwine.org.au
7-10 AUSPACK PLUS 2013. Sydney Olympic Park, NSW. www.auspack.com.au 8-12 Savour Tasmania. Hobart, TAS. www.savourtasmania.com.au 9 Vintage Cellars International Wine Fair 2013 – Melbourne. Melbourne, VIC. www.vintagecellars.com.au 10 (CD) BRISBANE 2013 Royal Queensland Wine Show. Bowen Hills, QLD. www.rna.org.au 10-11 Riverina Field Days. Griffith, NSW. www.riverinafielddays.com 11-12 Vintage Cellars International Wine Fair 2013 – Sydney. Circular Quey, NSW. www.vintagecellars.com.au 14-17 WA Wine Celebration. Perth, WA. www.winewa.asn.au
International April 17-22 Arvinis 2013. Morges, Switzerland. www.arvinis.com
looking back We step back in time to see what was happening through the pages of Grapegrower and Winemaker this month 10, 20 and 30 years ago. April 1983 More and more grapegrowers are looking at their table grape industry as a possible alternative to their present crops. The Riverland has ideal soil and climatic conditions for growing table grapes but some growers are deterred by the time and technical expertise required to successfully grow and market this crop. Because the price of table grapes to the consumer is high, the demands for quality are urgent, and under present conditions there is no alternative to the labour required in the vineyard for bunch thinning, trimming, spraying and careful harvesting.
4-5 Grampians Grape Escape - The Food & Wine Festival. Halls Gap, VIC. www.grampiansgrapeescape.com.au
24-26 ExpoVinis Brasil 2013. Sao Paulo, Brazil. www.exponor.com.br/expovinis
There is increasing concern, particularly in the European community and the US, regarding the concentration of lead in wine. All foods and beverages contain lead either from soil uptake or contamination (atmospheric, packaging, and processing). Interest in the lad content of wine is a consequence of several recent reports which have suggested that there is a positive correlation between the concentration of lead in blood and wine (and beer) consumption. In keeping with the recommendations of the Office International de la Vigne et du Vin, the US maximum limit for lead in beverages has been nominally set at 300ug/L pending further investigation.
4-5 Kellybrook Cider Festival. Wonga Park, VIC. www.kellybrookwinery.com.au
24-26 Food&HotelVietnam. Ho Chi Minh City, Vietnam. www.foodnhotelvietnam.com
5 Langhorne Creek "Geek 2013" Wine Showcase. Langhorne Creek, SA. www.langhornecreek.com
24-26 Vino & Delikatesy - Wine & Delicacies. Czech Republic. www.vegoprag.cz
2-4 Agfest Field Days. Bass Highway, between Carrick & Bracknell, TAS. www.agfest.com.au 4 Campbells Bobbie Burns Dinner. Rutherglen, VIC. www.campbellswines.com.au 4 Heathcote Cabernets. Toolleen, VIC. www.domaineasmara.com 4 Heathcote Shiraz Masterclass. Toolleen, VIC. www.domaineasmara.com 4-5 Bickley Harvest Festival. Bickley Valley, WA. www.kalamundachamber.com
6-7 Speciality Food & Drink Fair. Sydney, NSW. www.specialityfoodanddrinkfair.com.au 6-7 Vintage Cellars International Wine Fair 2013 – Perth. Perth, WA. www.vintagecellars.com.au April 2013 – Issue 591
18-20 VINORUS VINOTECH. Krasnodar, Russia. www.vinorus.ru 19-21 Salon des Vins à Mâcon Macon, France. www.concours-salonsvins-macon.com 20-22 World Wine Meetings America. Chicago, USA. www.wwm.fr 21-26 9th International Symposium on Grapevine Physiology & Biotechnology. La Serence, Chile. www.grapevinechile2013.cl
24-27 INTERVITIS INTERFRUCTA. Stuttgart, Germany. www.intervitis-interfructa.de JD = judging date CD = closing date For a comprehensive list of events, visit www.winebiz.com.au/calendar www.winebiz.com.au
The Winemakers’ Federation of Australia has supported the National Drinking Guidelines education campaign developed by an expert committee of the National Health and Medical Research Council. The guidelines, launched recently by Trish Worth, federal parliamentary secretary to the Minister for Health, indicate appropriate and inappropriate levels of alcohol consumption in terms of standard drinks. Grapegrower & Winemaker
Marketplace WINE PRESS SERVICING • Preventative maintenance & breakdown repairs for all makes and models. • 24/7 coverage during vintage • Large inventory of spare parts. • Membrane replacement. • PLC upgrades and design improvements. Electrical & mechanical expertise.
03 9455 3339 • www.rapidfil.com.au
BIRD NETTING • Permanent canopy or throw over net • Fully UV stabilised • Cable, wire and all canopy supplies in stock
OBLOMOV TRADING CO. PO Box 207, Rozelle, NSW 2039 Phone (02) 9660 6845 Fax (02) 9518 8372 e-mail: firstname.lastname@example.org
Visit our website at: www.otcobirdnet.com.au
USED VINEYARD POSTS FOR SALE - CCA
x Hillston & Orange NSW (bundled) Intermediate - $1.65 Strainers - $5.50 Tom - 0428 443 263 www.vinesight.com.au
Vine Industry Nursery Assoc.
2003 model GAI 3032 monobloc Filling & Capping Machine Has been used for wine - could be oil, water, syrup. 12 head rinser, CO2 injector, 16 head filler. Corker - Capper - Screw capper available April - contact 0438 372 391
Bruce Gilbert 0428 233 544 Brian Phillips 0417 131 764 fax 03 5025 2321
Quality Grapevines Paul Wright PO Box 180 Mt Pleasant South Australia 5235 Ph 08 8568 2385 www.vinewright.com.au
s? a e s r e v o Vintage Talk to us!
www.bibber.com.au email@example.com 08 8374 077
Winery and Vineyard
“a wine making Nirvana”
WA Great Southern high elevation estate-grown Vineyard + Cellar + Winery + House Multi-award winning wines……including a champagne selected in Australia’s Top 5 18 year old vines trained to a Scott Henry system True cool climate fruit of Pinot Noir, Pinot Meunier, Chardonnay, Sauvignon Blanc, Semillon & Merlot Income Streams: Export markets, Wholesale, Cellar Door sales, Grape sales, Storage & Contract disgorging A vertically-integrated wine making enterprise guaranteed to impress Vineyard & Cellar: 63 acres. Offers invited from $1.3M Winery & House: 11 acres. Offers invited from $1.69M
90 Grapegrower & Winemaker
More information at www.elliscorp.com.au Listing ID Code: EC430 Contact Alan Dinnie + 61 (0) 417 906 263 firstname.lastname@example.org
April 2013 – Issue 591
th th 12 -16
fieramilano Rho - Italy
opening time 9,00 - 18,00 pavilions 9-11
visit our website www.enovitis.it
International Vine and Olive Growing Technics Exhibition The 25th SIMEI will take place at the same time. The International Enological and Bottling Equipment Exhibition, will display every kind of machinery, equipment and products for wine-making and for bottling and packaging of drinks
Hotel and Travel www.interexpotravel.com
for further information ENOVITIS via San Vittore al Teatro, 3 20123 Milan - Italy tel. +39 02 72222825/26/28 fax +39 02 866575 www.enovitis.it â€“ email@example.com
WHEN ONCE IS ENOUGH!
Winequip is pleased to be able to offer the new JUCLAS ONE STEP Mastermind De-alcoholisation system. MASTERMIND REMOVE is designed with the aim of reducing the alcohol percentage in your wine through direct passage on membrane. Very low pressures are required as the selective membranes only allow alcohol to be passed through the membranes into the extractive solution (water) PLC controlled MMR 50 and 100 provides full automation and ensures the unit can be run without constant supervision and the integrity of the membranes will be protected. Available sizes; 10, 50 and 100Lâ€™s of pure alcohol removal/Hr (Larger units available upon request)
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For further details, contact us on: Melbourne 59 Banbury Rd Reservoir, Victoria Adelaide 12 Hamilton Tce, Newton, South Australia Auckland Unit C, 4 Titoki Place, Albany, Auckland E. firstname.lastname@example.org www.winequip.com.au
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