Australian Pinot Noir’s growing popularity and success has been a long time coming; we’ve been growing it since the 1830s.
Australian Pinot Noir is considered among the elite, a status that was confirmed at the International Pinot Noir Conference in 2016, where Australia was extoled as the feature country for the first time.
Growing consumer demand for Australian Pinot Noir wines, especially grown in cool/temperate climates, is reflected in the average price paid for Pinot Noir grapes, which increased by 5.2 per cent in 2017 to $1564 per tonne. The average price paid for all grapes from the cool/temperate regions in 2017 was $1232 per tonne, indicating Pinot Noir is priced at the premium end. Supply, however, did drop year over year by 2 per cent to just under 27,000 tonnes, which would also be pushing up prices.
The most recent data shows strong growth for Australian Pinot Noir still table wine in domestic market sales and for exports.
Australians support homegrown Pinot
Australian consumption of Pinot Noir has been growing steadily in recent years. Off-premise sales data from IRI market research company (IRIworldwide.com) indicates that two years ago, Australians were eight times more likely to drink Shiraz than Pinot Noir. With Pinot Noir sales growing at a much greater rate, people are now six times more likely to drink Shiraz (Figure 1). Pinot Noir sales are currently ranked fourth of all still, bottled, single variety reds behind Shiraz, Cabernet Sauvignon and Cabernet Merlot for the year ended 4 March 2018.
Figure 1: Year-over-year change in off-premise sales for top four still red varieties
Source: IRI market research company (IRIworldwide.com)
There has been healthy growth across most price points except at low levels, that is the $6.00 or less per bottle category. The most popular price point for Australian consumers, representing a third (34 per cent), was for bottles priced between $20.00 and $29.99. More Australians were also buying bottles valued between $30.00–$49.99 and $100 or more. With domestic demand for premium Pinot’s continuing to grow, we may start seeing an increase in store prices if supply remains constrained in cooler climates.
Sales of both domestic and imported Pinot Noir are growing, but growth is faster for the Australian product. The split between sales of domestic and imported wines was 61:39 for the year ending 4 March 2018.
A study of Australian regular wine drinkers conducted by Wine Intelligence found that Pinot Noir is ranked fourth among red varieties, with 17 per cent rating it their favourite and a third (32 per cent) having drunk Pinot Noir in the last six months.
International demand for Australian Pinot Noir
Wine Australia’s Export Report shows that exports of Pinot Noir red table wine increased by 5 per cent to $31 million in the 12 months ended March 2018. This overall increase comes despite the shift from the previously dominant commercial-level wines priced from $2.50 to $4.99 per litre (down $1.5 million) to premium-priced wines of $10.00 per litre and above (up $2.7 million per litre), as shown in Table 1.
|
Table 1: Australian Pinot Noir still table wine by price point ('000 AUD FOB) |
|||
|---|---|---|---|
|
Price segment (A$/litre) |
MAT March 2018 |
Value change |
Growth rate |
|
$2.49 and under |
$291 |
$213 |
270% |
|
$2.50 to $4.99 |
$14,153 |
-$1,523 |
-10% |
|
$5.00 to $7.49 |
$2,971 |
$213 |
8% |
|
$7.50 to $9.99 |
$2,121 |
$237 |
13% |
|
$10.00 to $14.99 |
$4,087 |
$499 |
14% |
|
$15.00 to $19.99 |
$1,973 |
$491 |
33% |
|
$20.00 to $29.99 |
$2,078 |
$276 |
15% |
|
$30.00 to $49.99 |
$2,672 |
$972 |
57% |
|
$50.00 to $99.99 |
$750 |
$196 |
35% |
|
$100.00 to $199.99 |
$356 |
$233 |
189% |
|
$200.000+ |
$107 |
$48 |
81% |
|
Total value |
$31,560 |
$1,856 |
6% |
Source: Wine Australia
Of the top three markets, the United States of America (USA) is the biggest destination for Australian Pinot Noir, but exports in the last 12 months declined by 10 per cent to $11.8 million. On the other hand, there was growth to mainland China – up 49 per cent or $1.7 million – and the United Kingdom (UK) – up 13 per cent or $0.4 million.
USA
Pinot Noir was the fourth most popular still, straight red exported to the USA, behind Shiraz, Cabernet Sauvignon and Merlot. Compared to all single and blends, it sits in the top six in export value terms. The year-on-year decline in export value was the result of a decline in price segments below A$10 per litre. This fall was seen mostly across bulk wines but also in some bottled product. Despite the decline, the value of premium-priced wines did increase, but this segment only counted for 8 per cent of Pinot Noir exported to the USA.
Off-premise wine sales data from IRI US also shows consumer demand decreasing for this variety with a 9 per cent decline to US$15.4 million in the year ending December 2017, compared to the previous 12-month period. Australian Pinot Noir accounted for two per cent of all Pinot Noir sales in the USA. Wine Intelligence has highlighted a decrease in consumption of Pinot Noir by regular wine drinkers in 2017 compared with 2014, associating this result with a wider trend away from mainstream to niche varieties.
China
In China, the next largest export market, Pinot Noir was the sixth most popular still, straight red variety export for the year ending March 2018 and value grew by 49 per cent to A$4.75 million FOB. This growth was experienced across all price bands except for entry level wines.
From a consumer perspective, Wine Intelligence reports that younger and female customers in China are attracted to lighter-styled red wines like Pinot Noir. Awareness of the variety is also high at 43 per cent, which is second behind Cabernet Sauvignon. A fifth (22 per cent) of Chinese urban upper-middle class imported wine drinkers also indicated that they drank Pinot Noir in the past 6 months.
UK
With the UK coming in at number three, Pinot Noir was the fifth most popular still red variety exported for the year ending March 2018. Exports grew by 13 per cent to A$3.3 million FOB. The overall growth came from wines priced at $10 or more per litre, while there was a fall in wines priced less than $10 per litre.
Off-premise wine sales data from IRI UK also show consumer demand increasing, with a 15 per cent jump in sales to £8 million from year ending March 2018 compared to the previous 12-months. Australian Pinot Noir accounted for 15 per cent of all Pinot Noir sales in market. Wine Intelligence shows a continuing upwards trend towards Pinot Noir, up from 34 per cent of all UK regular wine drinkers having the wine in the past six months in 2013 to 38 per cent in 2017.
Figure 2: Top three export markets of Australian Pinot Noir (still red)
Source: Wine Australia
To further cement Australian Pinot Noir as one of the global elite, Wine Australia has commissioned the University of Tasmania to undertake a project to build scientific and qualitative evidence to explain the unique character, quality and provenance of Australian Pinot Noir. This project will bring benefits to the sector by increasing demand and the premium paid for Australian Pinot Noir, and the associated potential plantings and production in cool climate regions of Australia. So, it is onwards and upwards for this amazing variety that James Halliday has called ‘the nectar of the gods’.