Is Chardonnay growing in demand?

Chardonnay is the fifth most planted winegrape variety in the world. It's Australia's most widely planted white variety and is second only to Shiraz overall. Australia has approximately 10 per cent of the world’s Chardonnay plantings and is the third largest grower of the variety after France and the US.

This Bulletin will examine the recent performance of Australian Chardonnay in export markets and at home.

Exports

In the 12 months ended March 2023, exports of wines labelled as Chardonnay[1] increased by 3 per cent in value to $327 million and in volume by 9 per cent to 176 million litres compared to the same period in 2022. By volume, Chardonnay is now the number one variety exported ahead of Shiraz.

Most of the growth in the past 12 months has come at below $2.50 per litre, up 19 per cent to $148 million. There was also strong growth at $10 or more per litre, albeit off a lower base, up 22 per cent to $25 million.

Figure 1 shows the total volume and value of Chardonnay exports have been gradually rising over the past decade. While volume hit a peak in the past 12 months, the value of Chardonnay exports peaked in 2021, but value in the past 12 months is the second highest over the period.

Figure 1: Exports of Chardonnay over time

^{Source: Wine Australia}

In the past 12 months, Chardonnay was exported by 536 Australian companies to 110 markets. The top five markets accounted for three-quarters of the value of Chardonnay exports. They are:

• United States of America ($116 million, 36 per cent share of Chardonnay value)
• United Kingdom ($80 million, 25 per cent share)
• Canada ($21 million, 6 per cent share)
• Germany ($14 million, 4 per cent share), and
• Japan ($13 million, 4 per cent share).

Figure 2 illustrates that the US has driven the growth in Chardonnay exports over the past three years. Exports have grown from $76 million in the 12 months ended March 2020 to $116 million in the same period in 2023.

Chardonnay exports to the UK were boosted during the initial wave of the COVID-19 pandemic as consumers gravitated towards well-known brands but have since returned to pre-pandemic levels.

Figure 2: Chardonnay exports over time to the top five markets

^{Source: Wine Australia}

Smaller markets that have seen some solid growth in Chardonnay exports in the past 12 months include:

• New Zealand (up 14 per cent to $6 million)
• Finland (up 48 per cent to $4 million)
• Thailand (more than doubling to $3 million), and
• United Arab Emirates (up 38 per cent to $2.5 million).

Domestic market

According IRI MarketEdge, Chardonnay is the second biggest white category in the domestic off-trade market behind Sauvignon Blanc. However, Chardonnay’s share of the total value of still white wine sales at 20 per cent is almost half that of Sauvignon Blanc at 38 per cent.

While the value of Chardonnay sales in the domestic market fell by 0.3 per cent in the 12 months ended 1 January 2023, there were varying performances by price segment (see Figure 3). Chardonnay sales declined below $15 per bottle but have seen growth above $15. Sales at $15.00 to $19.99 grew by 8 per cent and at $20.00 to $29.99 by 13 per cent. At above $20.00 to $29.99 per bottle, Chardonnay outsells Sauvignon Blanc by $16 million.

Figure 3: Value of Chardonnay sales in the domestic off-trade market

^{Source: IRI MarketEdge}

At $20.00 to $29.99, Margaret River is the number one region with a 20 per cent value share just ahead of the Adelaide Hills with an 18 per cent share. Adelaide Hills Chardonnay was a key driver of this growth in this price segment with the value of sales up 30 per cent in the past 12 months. Other regions to record growth in this price segment included the Barossa Valley (up 44 per cent), Yarra Valley (up 26 per cent) and Hunter (up 6 per cent).

Reflecting the growth in premium Chardonnay sales, Wine Australia is hosting a webinar on May 23 Adelaide Hills Chardonnay: Elevation and elegance. In a conversation with Rose Murray Brown MW, winemakers Turon White (The Lane Vineyards), Liam van Pelt (Ashton Hills Vineyards) and Tim Pelquest-Hunt (Orlando Wines) will discuss their diverse styles of Chardonnay, the importance of clones, vineyard practices and sustainability.