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harvey steiman at large

An Australian Turnaround?

Signs point to renewed interest as Wine Australia touts diversity
Photo by: David Yellen

Posted: Jan 17, 2013 4:05pm ET

It looked as if it were just going to be another trade tasting, a collection of importers sampling familiar wines to the trade. Wine Australia, which promotes Aussie wines around the world, expected about 150 sommeliers, retailers and wine media to the event in San Francisco Monday. More than 350 accepted the invitation.

The buzz there was palpable. Imagine, San Francisco sommeliers, notorious for seeking the most obscure wines they could find, excitedly sipping Margaret River Chardonnays, Hunter Valley Sémillons, even a Mornington Peninsula Dolcetto. And yes, Barossa Valley Shiraz. In recent years, as Australia's fortunes took a hit, one could hear crickets chirping at this annual event. Not this time.

The Aussies are doing everything they can to respond to a triple whammy that derailed what seemed like an express train only five years ago, when they were close to dominating imported wines in the U.S. They still export about 18 million cases to us, which is nothing to scoff at, but the headwinds have been brutal. A global economic crisis made wine drinkers wary of buying any unfamiliar wines. The perception grew that Australia sent us nothing but cheap wines for guzzling, except for overpriced, overblown Shiraz. And then Australia's currency unexpectedly got stronger than ours, in some cases erasing any profit margin at all for selling here.

The message from the tasting, titled "Next Chapter," couldn't have been more clear. The range of styles in Australia is a lot wider than most casual observers know. Having been exposed, on repeated visits to Australia, to the extensive selection available there, I can attest that, even at the peak of Australia's popularity here, we mainly saw a relatively narrow slice of this range. Wine Australia is diligently getting wines in the glass in front of sommeliers, retailers and wine media to reflect this regional and stylistic diversity.

That's what seems to be resonating with these U.S. gatekeepers, at least the ones I talked to at this event.

I was particularly taken with one small importer, Mark Huddleston. A former sommelier at top Los Angeles restaurants including Providence, Jar and Gordon Ramsey, Huddleston started his import business last year. He began with small-production wines from France, Austria and Italy. Because his godfather was born in Melbourne and pined for Yarra Valley Pinot Noirs, Huddleston made an exploratory visit and fell for the crisp, vibrant wines he tasted in Victoria and New South Wales.

"I loved the coffee, cedar, white pepper and spice character in the Pinots," he said. "It's not at all what I expected." He thought he should find light, wimpy wines, but the character of the wines he tasted drew him to see what else there was. Of all things, he found a sales winner in Hunter Valley Sémillon, a category notorious for gum-tingling acidity that repels as many wine drinkers as it attracts. His secret for selling it? "Oyster bars are big in L.A., and they just love the way these wines go with oysters."

The number of Australian wines I've reviewed has been shrinking perceptibly. In response to the economic headwinds detailed above, some importers who specialized in Australia have dropped some Aussie brands and diversified to producers from other countries. Others have simply closed up shop. Importers who trimmed their portfolios now seem to be adding new labels, some of which were on display at the tasting. Alongside the sunny, generous Barossa Shiraz and Grenache wines, I tasted a unique, lighter style Grenache from Ochota Barrels in McLaren Vale, a silky and vibrant Shiraz from Punt Road in Yarra Valley and a Rutherglen Durif of breathtaking purity and finesse from All Saints, a winery revered in Australia but historically rare or impossible to find here.

"We've added 13 new producers," bragged Ronnie Sanders of Vine Street Imports, a longtime stalwart of Australian wine. "This new generation of wines and winemakers in Australia is exciting, and the somms are starting to figure it out, too. It's always tricky getting past the gatekeepers to the consumer, and that seems to be changing for the better."

Later, I got a slightly different take from a couple of veteran winemakers, each with more than 40 vintages under their belts: Iain Riggs of Brokenwood (Hunter Valley) and John Duval, ex-chief winemaker of Penfolds whose eponymous winery produces wines from Rhône varieties in Barossa Valley. He also makes wine in Chile (Pangea) and Washington (Sequel, with Long Shadows).

Astonishingly, they both believe that the exchange rate pressure has actually been good for top-end wines. "The low-end wines have come up in price, or take a loss," said Riggs. "Basically, it has taken the focus off the low end," said Duval. In other words, the perception that Australia is nothing but cheap juice has lost ground in wine drinkers' minds.

The Aussie dollar currently trades at $1.06, from 25 to 75 percent higher than it was for two decades, basically fluctuating between 60 cents and 85 cents until 2011. Some producers and importers have swallowed the margin of difference rather than raise prices here, especially in wines up to $12, so as not to lose market share. Others have had to increase their bottle prices, making the wines look like less of a value than they were. High-end brands such as Brokenwood and Duval can still look good in a category where a difference in price of $5 matters less.

The other bright spot Riggs and Duval see is a new generation of wine drinkers in the U.S. who approach Australia without prejudice. "When you describe to them the style of wines Australia was exporting to the U.S. 10 years ago, they look blankly at you," said Duval. "They only care about what's happening now."

The new generation of Aussie winemakers is making a difference in that perception as well. "The young guns are giving it a go at a more elegant expression, using whole-cluster fermentations and other techniques, emphasizing individual vineyard sites, all to make their wines more distinctive," Duval added.

To be sure, not all the wines I tasted at the Wine Australia walk-around were so exciting. There was a Dolcetto that had me muttering that the variety is supposed to be aromatic, isn't it? Some of the Pinot Noirs were indeed weak. A couple of off-dry Rieslings had charm but didn't seem like a great improvement over the existing Aussie style of bone-dry and tight, but at least it offered variety.

The overall message was that any pigeonholes we may have used to house our impressions of Australia may need rethinking. And that's a good thing.

Angela Medeiros Slade
Washington, DC  —  January 18, 2013 10:55am ET
Thanks Harvey. We are really happy with the turn-out. The seminars were also overbooked, with 42 seats filled and people standing in the back.
Onwards & upwards...we've got lots more work to do to showcase Australia's next chapter.
Cheers, Angela Slade
Regional Director, Wine Australia
Don Rauba
Schaumburg, IL —  January 19, 2013 5:04pm ET
First, I'm jealous. Wish I could have attended! Second, I'm not sure I blame the product itself for the soft market. I'm not saying you do either, Harvey, but if one can assign partial "blame" to the wine, then I would still assign MORE of the blame to the distribution & marketing.

A disappointing number of Aussie bottles I've purchased are "cooked" by the time they reach us here... why is that? Cheap Shipping/Distribution?

Also, a more active presence at retail in tastings is essential to connect with consumers like me who love Aussie wine; not just advertising and plopping the bottles into the bins and crossing fingers. The reviews are usually respectable so that's normally enough to attract attention on the shelves. But I have never felt that Aussie wines were properly represented in tastings "around here", which I think are crucial in giving consumers the confidence to pay more than $10-15 for quality bottles.

I maintain that without significant changes in those elements (at least), there will be no bouncing back in the market, no matter how good (or diverse) the wines have become.
Kelly Carter
Colorado —  January 19, 2013 10:56pm ET
Many of us have tried to embrace Australian wines, relying on WS ratings as a starting point. They are lacking in so many ways when compared to other offerings, we have stampeded away from them with our palate. Why would I want to drink a Barossa blend for $17 rated at 90 in WS when I can purchase a Rioja for $15, a Douro valley red for $13, a Southern Rhone Villages quality wine for $15, or Bolgheri cabernet for $15?

All of those wines smoke the Aussie wine on the palate and the wallet. Consumers don't drink the Aussie wines because they don't measure up in a world where the competition tastes significantly better.

I have tried the WS Aussie recommendations, and they aren't worth the time of day compared to what the rest of the world has to offer. The Aussies should price their wine for the end of aisle "Clearance" prices to generate some interest.
Gordon Little
Little Peacock Imports, New York —  January 21, 2013 5:47pm ET
Thanks Harvey - glad to read of your experiences at the event. As the importer of Punt Road Wines to the United States, I'm happy that you enjoyed their Shiraz. I believe that Australian wines are in a very exciting spot regarding the US market.

The financial crisis and exchange rate appreciation helped to expel some of the lower end ("made for export") wines. As wines from new places including Chile and Argentina have stormed in to take their place, a resultant niche has opened up not at the bargain end, but in the mid-price (say, $18-25) where Australia is super competitive with the right wines. This often involves a slightly more restrained and elegant structure but generous Aussie fruit. If you want cheap wine - as previous commenter Kelly seems to suggest - then often European or South American wine is a good option. But once you hit $18 and upwards, Australian wine offers in many cases superior value and quality for money than many alternatives.

Gordon Little
Little-Peacock.com
Kelly Carter
Colorado —  January 21, 2013 10:17pm ET
Gordon,

Thank you for highlighting my unintended characterization of the wines I described as "cheap wine."

Each of the examples that I noted are WS rated (as well as other professional reviewer) wines that score 90 or higher that I have in my cellar. Several of my examples are from WS Top 100 lists over the last several years. I have enjoyed these wines with friends and employees.

The wines noted are delicious, and the fact they may not be costly increases the value and enjoyment to consumers as they can enjoy more of it.

To suggest that an exchange rate unduly impacts Aussie wines would ignore the Euro impact on US consumers. Americans love good wine, and they are willing to pay for it. Collectors fill their cellars with Bordeaux, Burgundy, Sauternes, Napa Valley, Piedmont, Tuscany, Ribera, Mosel, Rhones, Rioja and Douro wines. Even with a good cellar selection, we like to drink good wines at a great price.

I have tried to blind serve Aussie wines that receive solid WS scores, and these wines do not capture the energy and excitement that the other wine offerings in the world can. Those of us who enjoy wine, make it a passion to explore, experiment, study, and immerse ourselves in what we love. For me and my friends, Aussie wines have not offered that passion or drinking pleasure.

We should all explore our own palate. I submit that a lack of palate has impacted Aussie wine sales more than people acknowledge.
Harvey Steiman
San Francisco —  January 21, 2013 10:53pm ET
Kelly, I can't quite follow. You have enjoyed Australian wines with friends and you found then delicious, but the same wines now don't compare well with those of the rest of the world?
Kelly Carter
Colorado —  January 22, 2013 1:32am ET
Harvey,

My apologies for the confusion I created. The wines I was referring to were the non-Aussie wines in my first post: Rioja (2010 #52), Douro (2011 #42), Southern Rhone (2012 #58), and Bolgheri. All of these bottles have had WS 90 or higher scores with a very reasonable cost.

When we serve wine for friends, they never know what they are drinking or what a professional scored the wines. I diligently note the tasting feedback and the amateur scores. On a consistent basis, the Australian wines have underwhelmed.

Don noted in his post that Aussie wines he has tried have been cooked. My notes do not reflect any cooked Aussie wines in our informal gatherings, but perhaps that also may be a problem.

I appreciate the commitment the WS staff has made to bring us great wine. I have tried to enjoy these wines. Most recently I tried to love the 2008 Peter Lehmann Layers as well as a 2008 Penfolds. I have tried d'Arenberg vintages as well. I wanted everyone else to tell me that I was missing something. I guess we are all missing it.
Ronnie Sanders
Philly —  January 23, 2013 1:28pm ET
Hey Kelly,

Although Peter Lehmann and Penfolds make great wines, especially in large volumes, I think you may want to have a look at some wines from other regions other than the Barossa or South Australia. Although South Australia makes up quote a bit of the production in Australia, wines from other regions are dramatically different and I think if you would blind your friends on maybe a Leauwin Artist Chardonnay from Margaret River or Giaconda Chardonnay from Beechworth, most would think you are looking at Burgundy. The same can be said for Shiraz from Victoria, Cab from Coonawarra etc. Australia is a massive country with an enormous diversity of wine regions, styles and flavors. I think to just generally say that all Aussie wines should be The Aussies should price their wine for the end of aisle "Clearance" prices to generate some interest." is just ludicrous. I have some fantastic Rioja at $15 and I've had more than my share of $15 wines form Spain that have been flat out faulty or just not interesting and you can say that about any category.

If I could be so bold, Kelly, I think you need to just dig a little deeper. I think you'll find some stuff that you'll enjoy.

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