In the year ended September 2018, there were 2401 active Australian wine exporters. The majority of these (87 per cent) are companies that export fewer than 10,000 cases[i] per year, as illustrated in Figure 1. Another 9 per cent export between 10,000 and 50,000 cases per year, and only 4 per cent of exporters ship more than 50,000 cases each year.
Figure 1: Share of exporters by size
The 3 per cent of companies that ship more than 100,000 cases contribute 88 per cent of the volume and 74 per cent of the value of total Australian wine exports (see Figure 2).
Interestingly, companies that ship fewer than 50,000 cases per year contribute a much higher share to value (21 per cent) than to volume (9 per cent), because smaller wine producers sell their wines at higher price points, while many bigger companies ship unpackaged wine at lower average prices. For example, shipments that are valued below $2.50 per litre free on board (FOB) and above $10 per litre have an equal share of total value (around 25 per cent) for companies that ship more than 50,000 cases per year. In contrast, for companies that ship less than 50,000 cases, 50 per cent by value is shipped at above $10 per litre.
Figure 2: Share of volume and value by exporter size
Overall, companies that exported more than 50,000 cases per year contributed $191 million to the increase in value of Australian exports (a growth rate of 10 per cent over the previous year), while companies that exported fewer than 50,000 cases contributed $75 million (a growth rate of 15 per cent). Figure 3 illustrates the trend over time for exporters by size.
Figure 3: Performance of exporter groups over time
Trends for smaller exporters
As 96 per cent of exporters ship fewer than 50,000 cases of wine per year, it is worth highlighting some of the less visible trends for this market segment and how they are performing compared with the larger companies.
For many of the top export destinations, such as mainland China, Canada, New Zealand and Germany, export growth rates have been similar for small and large exporters (see Figure 4). However, small exporters have borne a greater proportion of the decline in the United States of America (USA) and have also been struggling in Japan. On the other hand, small exporters are out-performing their larger counterparts in the Netherlands and Hong Kong.
Figure 4: Small vs. large exporter performance in top 10 destinations
As illustrated in Figure 5, performance by variety is much more diverse. While smaller exporters are outpacing large exporters’ growth rate for Shiraz, Cabernet Sauvignon and Grenache, larger exporters are performing better in white varieties such as Sauvignon Blanc and Riesling. Intriguingly, Pinot Noir performance is a very different story depending on exporter size; small exporters’ shipments of Pinot Noir have grown 11 per cent in value, while large exporters have declined by 8 per cent. This correlates to small exporters mainly playing in the premium space; premium Pinot Noir (shipping at above $5 per litre FOB) has grown by 10 per cent this year, while packaged Pinot Noir below $5 per litre has declined by 15 per cent.
Figure 5: Small vs large exporter performance by variety label claim
The standout performers for both small and large exporters on a regional basis are the ‘South Australia’, ‘Barossa’ and ‘Barossa Valley’ label claims, although small exporters are well outpacing the growth of large exporters with wine labelled as ‘South Australia’ (see Figure 6). Pleasingly, exports from Clare Valley and Langhorne Creek are also growing for both groups. However, there are a few regions where small and large exporters have diverging rates of growth. Exports from South Eastern Australia, McLaren Vale, Coonawarra and Yarra Valley are growing for small exporters but declining for large exporters.
Figure 6: Small vs. large exporter performance by regional label claim
Growing wine exports is a key focus of the Australian Government’s $50 million Export and Regional Wine Support Package. In October 2018, Wine Australia commenced its ‘Growing Wine Exports’ program for new and experienced wine exporters looking to grow their exports and give their export strategies a ‘health check’. The program comprises one-day ‘Export Ready Sessions’ and two-day ‘Export Plan Workshops’ that are being rolled out nationally throughout 2018–19. The sessions offer practical advice particularly useful for small enterprises. See Growing Wine Exports at a glance (PDF) for more information and email growingwine@wineaustralia.com with any questions.
[i] All references to cases are to 9 litre equivalents