In our most recent Export Report 2019–20, we highlighted that the impact of COVID-19 on exports to the USA had not been negative to date. This comment was based on observations of quarterly data that showed export value stabilising in the March quarter 2020 before increasing in the June quarter 2020. This news is particularly interesting given export value was in a gradual decline prior to lockdown restrictions.
Today, we unpack Wine Australia’s export data for the first half of calendar year 2020 compared to the same period in 2019 to explore how COVID-19 has impacted exports to the USA on the main wine styles – red, rose, white and bubbles from Australia.
Red wine
In the first half of 2020 (H1 2020), exports of red wine to the USA were the second largest wine style in volume terms but the highest in value. Despite there being growth at both the medium and higher price points, it was not enough to offset overall declines in export volume or value given most red wines exported are below $5.00 free on board (FOB) value (Table 1). Growth in particular price points to note include $5.00–7.49 FOB value (up 6 per cent in volume and 6 per cent in value), $10.00–14.99 FOB value (up 23 per cent in volume and up 22 per cent in value) and $20.00–29.99 FOB value (up 49 per cent in volume and 55 per cent in value).
Table 1: Exports of Australian red wine for H1 2020 by price points
| FOB price points | Volume (litres) | % change on H1 2019 | FOB Value (AUD) | % change on H1 2019 |
| $2.49 and under | 14,000,804 | -37% | $22,581,602 | -33% |
| $2.50 to $4.99 | 36,059,489 | -8% | $138,116,409 | -1% |
| $5.00 to $7.49 | 2,479,594 | 6% | $14,723,107 | 6% |
| $7.50 to $9.99 | 1,034,763 | -4% | $9,625,079 | -0.3% |
| $10.00 to $14.99 | 1,575,759 | 23% | $18,539,229 | 22% |
| $15.00 to $19.99 | 285,057 | -31% | $4,706,567 | -31% |
| $20.00 to $29.99 | 298,233 | 49% | $7,274,737 | 55% |
| $30.00 to $49.99 | 77,588 | -38% | $3,043,615 | -32% |
| $50.00 to $99.99 | 22,500 | -49% | $1,500,748 | -45% |
| $100.00 to $199.99 | 4,739 | -42% | $648,144 | -48% |
| $200.00 and over | 1,676 | 303% | $613,130 | 244% |
| Total | 55,840,202 | -16% | $221,372,367 | -5% |
The fall in the lower price points was due to fewer bulk exports of red wine, accounting for a quarter (26 per cent) of export value in H1 2020 and down from 34 per cent in H1 2019.
Across the varieties exported based on label claim, there was growth in H1 2020 from 8 of the top 20 by volume. These included Cabernet Sauvignon (the most popular variety in terms of off-trade sales), Cabernet Sauvignon/Shiraz, Durif/Shiraz, Durif, Shiraz/Merlot/Cabernet Sauvignon, Shiraz/Cabernet and Grenache/Shiraz/Mourvèdre. These label variety claims also increased in value along with Pinot Noir (Table 2).
The increase in value from wines with Cabernet Sauvignon on the label was the result of increases across lower, medium and higher price points.
According to IRI, sales in the USA off-trade for Cabernet Sauvignon indicate that USA consumers are turning to established varieties with value across the total off-trade market up 21 per cent in H1 2020. Retail sales of Australian Cabernet Sauvignon have contributed to this growth, up 9 per cent in value. This has also been the case for Pinot Noir with the total off-trade market up 22 per cent and Australian Pinot Noir sales up 20 per cent.
Table 2: Exports of Australian red wines for H1 2020 by top 20 label claim variety
| Label variety claim(s) | Volume (litres) | % change on H1 2019 | FOB Value (AUD) | % change on H1 2019 |
| No label claim | 15,706,011 | -40% | $37,057,430 | -29% |
| Cabernet Sauvignon | 15,600,143 | 16% | $63,214,700 | 13% |
| Shiraz | 8,354,365 | -7% | $46,966,118 | -5% |
| Merlot | 8,040,974 | -6% | $31,270,687 | 0.3% |
| Shiraz, Cabernet Sauvignon | 3,120,763 | -27% | $13,586,931 | -11% |
| Pinot Noir | 2,391,371 | -2% | $10,073,655 | 4% |
| Cabernet Sauvignon, Merlot | 1,074,564 | -24% | $4,144,009 | -22% |
| Cabernet Sauvignon, Shiraz | 612,243 | 22% | $6,571,627 | 39% |
| Durif, Shiraz | 165,312 | 26% | $553,840 | 15% |
| Durif | 74,942 | 249% | $363,491 | 178% |
| Shiraz, Merlot, Cabernet Sauvignon | 73,080 | 487% | $1,103,926 | 306% |
| Grenache | 61,487 | -17% | $817,118 | -14% |
| Shiraz, Viognier | 51,792 | -41% | $639,228 | -46% |
| Cabernet | 50,549 | -30% | $480,325 | -10% |
| Shiraz, Cabernet | 49,878 | 210% | $457,389 | 587% |
| Grenache, Shiraz, Mourvèdre | 48,708 | 113% | $342,577 | 97% |
| Shiraz, Mataro | 42,665 | -16% | $454,921 | -16% |
| Cabernet Sauvignon, Shiraz, Merlot | 38,853 | -13% | $244,977 | -10% |
| Sangiovese | 18,909 | -17% | $119,204 | -4% |
| Grenache, Shiraz, Mataro | 18,893 | 3% | $301,698 | 34% |
Rosé wine
In H1 2020, exports of rosé wine to the USA were the third largest wine style in volume and value. Overall, there was no growth in export volume or value. However, there was growth at both the low and medium price points (Table 3). While nearly all rosé exports are bottled, there was a large increase in bulk rosé export volume, explaining the increase in the $2.49 FOB value and under price point. Despite this, there were also increases in $7.50–9.99 FOB value and $15.00–19.99 FOB value.
Table 3: Exports of Australian rosé wine for H1 2020 by price points
| FOB price points | Volume (litres) | % change on H1 2019 | FOB Value (AUD) | % change on H1 2019 |
| $2.49 and under | 182,617 | 271% | $371,532 | 436% |
| $2.50 to $4.99 | 1,321,140 | -26% | $5,134,436 | -22% |
| $5.00 to $7.49 | 9,450 | -84% | $61,151 | -82% |
| $7.50 to $9.99 | 97,824 | 808% | $835,245 | 769% |
| $10.00 to $14.99 | 24,588 | -28% | $311,935 | -17% |
| $15.00 to $19.99 | 4,968 | 426% | $84,265 | 419% |
| $20.00 to $29.99 | 1,841 | -22% | $40,754 | -24% |
| Total | 1,642,428 | -16% | $6,839,318 | -9% |
White wine
In H1 2020, exports of white wine to the USA were the largest wine style in volume terms but the second highest behind red wine in value. Like red wine, the majority of white wine exports to the USA has an FOB value of under $5.00 (Table 4). Given there was an increase in export value across lower, middle and higher price bands, this was enough to drive overall growth in export value, but not enough to offset a decline in volume. Growth in particular price points to note include $2.50–4.99 FOB (up 12 per cent in volume and 18 per cent in value), $10.00–14.99 (up 21 per cent in volume and up 25 per cent in value) and $30.00–39.99 FOB value (up 68 per cent in volume and 78 per cent in value).
Table 4: Exports of Australian white wine for H1 2020 by price points
| FOB price points | Volume (litres) | % change on H1 2019 | FOB Value (AUD) | % change on H1 2019 |
| $2.49 and under | 42,331,747 | -14% | $50,358,266 | -7% |
| $2.50 to $4.99 | 35,004,625 | 12% | $133,641,541 | 18% |
| $5.00 to $7.49 | 1,281,096 | 10% | $7,328,453 | 7% |
| $7.50 to $9.99 | 317,592 | -73% | $2,853,051 | -70% |
| $10.00 to $14.99 | 179,489 | 21% | $2,109,066 | 25% |
| $15.00 to $19.99 | 22,370 | -45% | $386,020 | -43% |
| $20.00 to $29.99 | 23,727 | 12% | $552,953 | 12% |
| $30.00 to $49.99 | 6,750 | 68% | $255,335 | 78% |
| $50.00 to $99.99 | 6,278 | -21% | $423,912 | -17% |
| $100.00 to $199.99 | 36 | -91% | $4,480 | -89% |
| Total | 79,173,708 | -5% | $197,913,077 | 6% |
Around half of the volume of white wine exports to the USA were shipped over in bottles and this grew by 3 per cent on the previous 6-month period last year.
Across the varieties exported based on label claim, there was growth in H1 2020 from 5 of the top 15 by volume and 2 varieties that were not exported in H1 2019. These included Pinot Gris, Sauvignon Blanc, Sauvignon Blanc/Semillon, Semillon, Fiano and Trebbiano. These label variety claims also increased in value along with Chardonnay and Viognier/Marsanne (Table 5).
The increase in value from wines with Chardonnay on the label was the result of increases across lower, medium and higher price points.
Similar to the trend with Cabernet Sauvignon reported by IRI, sales in the USA off-trade for Chardonnay indicate that USA consumers are turning to established favourites with value across the total off-trade market up 12 per cent in H1 2020. Retail sales of Australian Chardonnay have contributed to this growth, up 9 per cent in value.
Table 5: Exports of Australian white wines for H1 2020 by top 15 label claim variety
| Label variety claim(s) | Volume (litres) | % change on H1 2019 | FOB Value (AUD) | % change on H1 2019 |
| No label claim | 42,962,558 | -8% | $60,219,328 | 4% |
| Chardonnay | 21,570,663 | -9% | $81,771,501 | 5% |
| Pinot Gris | 6,508,494 | 265% | $24,815,275 | 332% |
| Pinot Grigio | 3,568,938 | -45% | $11,746,456 | -57% |
| Sauvignon Blanc | 2,917,248 | 19% | $10,464,173 | 20% |
| Riesling | 1,039,635 | -13% | $4,736,123 | -7% |
| Sauvignon Blanc, Semillon | 230,519 | 80% | $1,578,093 | 25% |
| Viognier | 182,760 | -9% | $1,007,995 | -15% |
| Viognier, Marsanne | 46,089 | -0.2% | $389,791 | 2% |
| Semillon | 25,785 | 23% | $313,606 | 27% |
| Gordo, Black Muscat | 24,255 | -80% | $153,056 | -79% |
| Chardonnay, Viognier | 12,393 | No exports | $65,534 | No exports |
| Semillon, Sauvignon Blanc | 11,448 | -80% | $57,910 | -78% |
| Fiano | 11,205 | 64% | $86,748 | 53% |
| Trebbiano | 8,910 | No exports | $28,245 | No exports |
Sparkling and carbonated wine
In H1 2020, exports of sparkling and carbonated wine to the USA declined in both value and volume. Sparkling wine made up 90 per cent of ‘bubbles’ exported and driving the decline, while semi-carbonated wine on the other hand grew in both value and volume -– albeit from a low base. Unlike the other styles, there wasn’t a great deal of growth across many of the price points other than a couple of the smaller ones, i.e. $2.49 and under and $20.00–29.99 FOB value (Table 6).
Table 6: Exports of Australian sparkling and carbonated wine for H1 2020 by price points
| FOB price points | Volume (litres) | % change on H1 2019 | FOB Value (AUD) | % change on H1 2019 |
| $2.49 and under | 549 | 510% | $1,180 | 521% |
| $2.50 to $4.99 | 143,730 | -43% | $499,878 | -43% |
| $5.00 to $7.49 | 238,284 | -35% | $1,321,788 | -32% |
| $7.50 to $9.99 | 23,225 | -17% | $199,174 | -18% |
| $10.00 to $14.99 | 45,108 | -30% | $582,693 | -25% |
| $15.00 to $19.99 | 7,821 | -31% | $131,642 | -30% |
| $20.00 to $29.99 | 5,490 | 95% | $122,411 | 111% |
| $30.00 to $49.99 | 9 | -96% | $274 | -96% |
| Total | 464,216 | -36% | $2,859,041 | -30% |
Wine Intelligence recently noted in their Sparkling Wine in the US market report that the there was an immediate increase in consumption of all types of sparkling wines after lockdown restrictions were put in place, but this could have been the result of lower consumption prior to this. This was driven largely by young consumers, especially under 35 years. They continue to highlight as well that new opportunities still exist for alternative Prosecco styles. This is female led, mostly from the desire for lower calorie wines. Exports of Australian sparkling Prosecco grew in the first half of 2020 in both value and volume, albeit from a lower base accounting for 1 per cent of sparkling / carbonated wine export volume.