Opportunities for Cabernet Sauvignon exports

Cabernet Sauvignon is the world’s most planted winegrape variety.

In 2010, there were 290,000 hectares across the world planted to Cabernet Sauvignon^[1]. France has the most plantings with 54,000 hectares, followed by Chile (41,000 hectares), the United States (35,000 hectares) and Australia (25,000 hectares).

According to Euromonitor International, the two biggest markets for Cabernet Sauvignon are mainland China (511 million litres) and the United States (366 million litres). From 2010 to 2015, Cabernet Sauvignon sales grew by an average of 5 per cent per annum in China and by 6 per cent per annum in the United States.

Cabernet Sauvignon is Australia’s second-most valuable wine export. In 2016, Cabernet Sauvignon (single variety and blends) exports^[2] totalled $425 million compared to Shiraz (single variety and blends) exports totalling $701 million.

The value of exports of single variety Cabernet Sauvignon has grown by an average of 14 per cent per annum over the past four years and it grew by 12 per cent in 2016. Growth occurred at all price points (see chart).

Figure: Exports of Australian single variety Cabernet Sauvignon (A$ million FOB)

Source: Wine Australia

Mainland China is embracing Australian Cabernet Sauvignon, with single variety bottled exports up 46 per cent to $93 million in 2016. The United States is the second largest destination and exports grew by 0.4 per cent to $57 million. Exports to the United Kingdom grew by 29 per cent to $29 million, which is exceptional growth in an established market.

In the United States, research commissioned by Wine Australia and conducted by Wine Opinions indicates that the trade sees potential for Australian Cabernet Sauvignon as an affordable alternative to California Cabernet Sauvignon. This conclusion is supported in a recent article in Wine Enthusiast.

In China, Australia is already well-positioned in the grocery channel, according to data provided to Wine Australia by international wine market data analysts MiBD Market. In 2016, it had the highest placement (i.e. proportion of outlets stocking its productions), the second highest volume of products (after Chinese wine) and the highest average unit price after wines from the United States.

According to Wine Intelligence^[3], 62 per cent of Chinese consumers had consumed Cabernet Sauvignon in the previous 6 months. This places the variety well ahead of Chardonnay (32 per cent), Riesling (31 per cent) and Pinot Noir (25 per cent).

Of the consumers who are aware of Cabernet Sauvignon in China, 85 per cent of them had consumed the variety in the last 6 months. This is by far the highest conversion rate among the top 18 varieties. Furthermore, awareness, consumption and conversion of Cabernet Sauvignon improved in 2016 over 2015. Australian exporters are well-placed to take advantage of this trend.

Our full Cabernet Sauvignon report can be found here.