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Drinking Out Loud

Where Do We Go From Here?

Why wine today has irrevocably changed from a decade ago

Matt Kramer
Posted: April 5, 2011

CLARE VALLEY, Australia—Of all the wine sagas that I've followed over the decades—the rise of California; the decline of everyday Bordeaux; the stunning renaissance of Italy; the revitalization of Spain; the wholly new appearance of Oregon and Washington—none quite equals the roller-coaster ride of Australia.

In the space of little more than a decade, Australian wine went from a strictly local item fighting for shelf space and cultural legitimacy in a beer-besotted country to a worldwide phenomenon that single-handedly knocked France off the (low-priced) shelves in Great Britain and was fast encroaching on comparably low-priced wines in the United States. Like some alien invader, Australian wine was a commercial juggernaut that seemingly came out of nowhere.

Then, about five years ago give or take, the juggernaut ground to a halt. All of a sudden, it seemed that nobody wanted Australian wines anymore—or publicly admitted to it, anyway. Producer after producer here in Australia told me point-blank during my three-week-long trip last month that they had no market in the United States. I heard time and again that their importers either cut orders severely or left off importing their wines altogether.

Every wine industry has its missteps. It happened in Burgundy in the 1970s with excessive yields creating dilute, almost anorectic wines; in California in the 1980s with flavorless "food wines;" and in Oregon with a self-proclaimed pair of supposedly great vintages (1986 and '87) that set the region back in public esteem and credibility for nearly a decade. The list could easily continue with, for example, Austria's disastrous scandal in 1985 involving wines spiked with diethylene glycol.

In all of these cases, what emerged from the ashes was a vastly improved wine culture in each locale. Burgundy has never made better red wines, in my opinion, than it does today. (White Burgundies are more problematic as the yields for Chardonnay are still way too high for consistent greatness, to say nothing of the nagging, aggravated and still-unsolved problem of premature oxidation in white Burgundies.)

Austria radically reformed itself after the wake-up call of the scandal, and its wines have never been purer, finer or more profound. California has gone from strength to strength, from an explosion of ever-better Pinot Noirs and Syrahs to the still-evolving maturation of largely new (and often cooler) wine zones along the Central and Sonoma coasts. Oregon, for its part, is now creating the best Pinot Noirs it has ever made.

But what of Australia? Right now, Australian wine suffers a nearly worldwide lack of esteem. Where only just a few years ago seemingly everyone was oohing-and-aahing over the new Australian wine baby, today there's a collective shrug. It's just another baby—and maybe it really wasn't all that cute anyway.

Australia's fall from grace had a velocity I've never before seen. I can't think of another wine country that, Icarus-like, flew so high and fell so far in so short a time.

"If you're thinking, 'Great, just what we need: more syrupy, over-alcoholic Barossa-style Shiraz,' think again."

Now, the question is: Where to go from here? In both value and quantity the plunge continues. According to Impact, a trade publication of M. Shanken Communications, "Exports of Australian wine have fallen in value for the third consecutive year, experiencing a 9 percent drop … for the 12 months through December 2010."

And what is sent abroad is increasingly exported in bulk form, as a cheap commodity item. Higher-value bottled wine exports continue to decline: exports of bottled wines to Australia’s two most important markets—Great Britain and United States—fell in volume by, respectively, 28 percent and 4 percent, according to Impact.

While other wine zones may have more breathing room thanks to, say, a larger local audience, which is the key advantage of American wine producers, many other nations are nowhere near as fortunate. (New Zealand, for example, exports fully 71 percent of its entire wine production.)

Many wine zones are faced with becoming "mini-Australias" as worldwide wine competition increases, exchange rates become unfavorable (Australia; New Zealand; Europe), local production levels become insupportably large (Italy, Spain, California) or lopsided in variety (New Zealand with Sauvignon Blanc; Oregon with Pinot Noir) or the luster simply wears off (Napa Valley; Brunello di Montalcino).

Mind you, none of this is inevitable. But the nature of the world today makes Australia's astoundingly rapid fall a cautionary tale. Simply put, things happen faster and more dramatically now. The reasons may differ—Japan's appetite for luxury products may contract because of a new mindset from the earthquake—but markets indisputably now react more severely than, say, 10 years ago.

This is why I went to visit Australia's Clare Valley. Such a statement may seem a non sequitur, but I assure you it's not. I went to Clare Valley to see the future—and the redemption—of Australian fine wine.

About 90 miles north of Adelaide, Clare Valley is a narrow strip of farmland—really several lateral ribbons of hillsides—that's one of the oldest winegrowing areas in Australia, dating to the 1840s. With just 2,500 acres of vines, it's overshadowed by its much larger and equally old neighbor, Barossa Valley. Yet the two zones, despite their proximity (the two districts are 60 miles apart), create distinctly different wines—and have utterly different mentalities.

Where Barossa has long been the titular headquarters of some of Australia's biggest wine companies—and consequently has suffered disproportionately from their bulk-processing mindset—Clare Valley is far more artisanal. Vineyards typically are small: 200 acres of vines would be considered a big holding.

What's more, Clare retains a distinction that's remarkable anywhere in the world: It creates stunningly fine dry Riesling alongside equally superb Shiraz and Cabernet Sauvignon. And if you're thinking, "Great, just what we need: more syrupy, over-alcoholic Barossa-style Shiraz," think again. Clare Valley reds are typically sleek and cool-climate in their restraint. Sure, the reds can be amped-up, and a few are. But most are not.

Clare Valley has what all wine lovers should want: artisanal, handcrafted winemaking values allied to a focus on just a few varieties that perform magnificently. And oh yes, the prices are proper. They're not Australia's cheapest wines, nor should they be. But you won't be paying for hype and hoopla either.

For producers everywhere (and we onlookers as well), what Clare Valley represents is what the future will reward: no critter labels, no winemaking trickery; no cheap and cheery and no excess.

If Clare Valley had monks, we'd call it Burgundian—which is what it is, at least in its agricultural modesty. It epitomizes the cure for what ails Australia.

Harvey Steiman
San Francisco, CA —  April 5, 2011 12:38pm ET
I have been a big fan of the region's wines myself for years. Clare is also the prettiest and most charming of the wine regions in South Australia, with biking/hiking trails that run the length of the valley.

In my view the biggest thing that ails Australia is the exchange rate. The Aussie dollar, now mostly at par with the U.S. dollar, has put the squeeze on exports, essentially decreasing revenues by one-third on anything they sell to the U.S.

Australia produces too many good to great wines to ignore.
Joe Dekeyser
Waukesha, WI —  April 5, 2011 12:56pm ET
Do you have any particular favorites or good examples to highlight?
Matt Kramer
Portland, OR —  April 5, 2011 1:31pm ET
Mr. Dekeyser: You write : "Do you have any particular favorites or good examples to highlight?"

I'm glad you asked. (I was hoping someone would.) I sure do have some favorites some of which, regrettably, are either not available in the U.S. or the latest releases--for the reasons I outlined in the column--are not being sent to the States.

One of my favorites is Wendouree, a near-legendary Clare Valley producers whose wines are sold exclusively from their mailing list. I spent several hours visiting Wendouree on this latest trip. The owners are delightful people and couldn't have been nicer. Yet the demand for Wendouree's Shiraz and Malbec and red wine blends such as Cabernet/Malbec is such that I wasn't even offered a taste!

The last thing Wendouree wants is more attention, as they can't even begin to supply their existing mailing list. (By the way, their prices are not "cultish". Typically, a Wendouree wine sells for about $45 from the winery, which is, if anything, a bargain for the quality.)

All the Wendouree wines I've had have come from Australian friends who generously supply me with samples from their own cellars. On this last trip a friend in Sydney popped open a 2005 Wendouree Malbec that was stunning: dense yet supple, free of apparent oak, with refined tannins and gyroscopic balance. It was one of those reds that you can drink young with guiltless pleasure yet you know in your bones that the wine will continue to age beautifully for decades to come.

Just up the road from Wendouree is a tiny winery called Adelina whose wines, until recently, were indeed exported to the States. Adelina Shiraz, from 80+ year-old vines, is remarkable, very much in the no oakiness/no excess/supple-yet-seemingly-immortal style of neighboring Wendouree. Adelina makes just 300 cases of Shiraz from their two acres of old vines.

I adore the many dry Rieslings from Clare Valley which, by the way, age beautifully. I spent considerable time visiting Jeffrey Grosset (Grosset Wines) and his life companion Stephanie Toole (Mount Horrocks Wines) who make absolutely some of the finest dry Rieslings in Clare Valley. They make their wines separately in Solomonically divided cellars within the same structure.

Grosset Riesling comes from a district called Polish Hill, while the Mount Horrocks Riesling comes from a separate--and very different--zone called Watervale. You can taste the soil differences in the wines easily. But more about that in another column.

By the way, the Mount Horrocks Cabernet Sauvignon from Clare Valley--just 250 cases, alas--is refined, supple and delicate yet substantial. It's one of the finest Cabernets I've yet tasted from Australia and nothing at all like what most of us would imagine as a "typical" Aussie Cabernet.

Back to Clare Rieslings: Look also for Pikes and Neagles Rock, as well as Paulett Wines and Reilly's. The list is extensive with the Rieslings, as most Clare wineries do at least a decent job while, inevitably, a few really stand out.

Anyway, that's a start. Thanks for asking!
Gavin Speight
Napa, California —  April 5, 2011 2:17pm ET
As an importer of many Australian regional estates, I concur with both Harvey's and Matt's comments - the Clare is fabulous wine country (its Rieslings are absolute treasures) that should be on any wine lover's itinerary when touring South Australia (and the same applies to states such as Victoria, Western Australia or Tasmania - there are many similarly engaging regions to explore).

Adding to Harvey's comment on exhange rates, the rise of the Aussie dollar from a relative normal level of US $0.75 a few years ago to parity today means that a Clare wine such as Kilikanoon Riesling would have risen from $20 to $25 simply because of FOREX movements - the fact that it hasn't attests to the decreasing revenue scenario for the winery and importer (we both share the pain!) that Harvey alludes to.

But, as an optimistic Aussie in the US (you've gotta be in these times!) I still point out that Australia remains the 2nd largest import category in the US (only behind Italy), there's a determined group of importers who continue to wave Australia's regional flags and we are simply not going to disappear into the ether. Harvey notes this and Matt mentioned in a previous blog that Australia is producing more great wines than ever before and there is no logical rationale why the market should have gone pear shaped so quickly.

But, as the ANZAC's did way back in WW1 in Gallipoli, we'll protect the beach heads! Although that's a story for another day.
Morewine Bishar
Del Mar, California —  April 5, 2011 4:00pm ET

You are so right about the high quality of Clare Valley Riesling, but of course, you just lost 95% of your audience right there by the mere mention of the world's greatest white wine grape! Click! Off went the interest circuits, down came the shutters!

For the lucky 5% though, these wines are so worth seeking out. I wish those wineries all the luck in the world. Why is it that Riesling's great charms remain so lost on the vast majority of the American wine market? Thank you, Matt, for not giving up the effort on behalf of this glorious varietal.

David Clark
for The Wine Connection
Joseph Kane
Austin —  April 5, 2011 4:58pm ET
Another great article Matt. Quickly becoming my favorite blogger on WS. You would think that with the implosion of the US market for high alcohol australian wines the Aussie winemakers would shift their style of production. Unfortunately, I recently attended a tasting with Chris Ringland. Some of his most recent Chateau Chateau grenache releases came in at 18% alcohol. I am glad to hear that some winemakers are getting the picture and making more subtle and refined red wines. Let's hope that this article sparks just enough interest in Clare Valley wines to get some excellent bottles imported.

And for those who have missed out on Clare Valley riesling, find some and drink it. It wont hurt your wallet, and your palate with praise your wisdom.
Karl Mark
Geneva, IL. —  April 5, 2011 8:52pm ET
I enjoy Riesling from Washington, Germany, Alsace, Austria and New York. So why Australia?

I enjoy Syrah from California, Washington, Chile, the Rhone Valley and South Africa. So why Australia?

As a comparison.

I enjoy Malbec from Argentina.

I enjoy Carmenere from Chile.

I enjoy Sangiovese from Italy.

Some wines are grown everywhere, while others are only grown well in a few places. Maybe it's time for Australia to focus on a few wines that are not grown all over the world, but will do well in Australia. Find something obscure and plant it...syrah is old news. (Semillon plantings in Hunter Valley is a great idea!)
Matt Kramer
Portland, OR —  April 5, 2011 9:26pm ET
Mr. Mark: While I understand your point, I have to say that Syrah/Shiraz is more than just "old news" in Australia. It is, to borrow Ezra Pound's immortal definition of literature, "News that stays news". Even after 150 years of cultivation, the best Australian Shiraz remains breaking news, to this day.

As for Riesling, you ask "Why Australia?" The answer is simple: Because no other dry Rieslings anywhere in the world taste quite like the best Australian dry Rieslings from Clare Valley, nearby Eden Valley and also in the adjoining state, Victoria.

(I had a 2001 Crawford River Riesling from southwest Victoria this last trip that was so good--so lime-infused, mineral and brisk--that it would have made your tongue hang out like broken roller shade, panting for more.)

Bottom line: If a place can create Rieslings (and Syrahs) as fine and as original as what the best of Australia delivers, then it doesn't matter what anybody else is doing--or how long they've been doing it.

Originality and accomplishment are their own justifications, don't you think?

Clinton W Mitchell
Naperville, IL —  April 6, 2011 9:43am ET
As a wine retailer, I can say Australia did this to itself. It flooded our market with so much cheap Shiraz, consumers think that's all there is. Throw in a tough economy, where consumers are willing to take fewer chances on higher-priced wines, and the emergence of Argentina, New Zealand, and certain regions in California in the value-driven New World market, and you have the death of Australia.
So, exporters tried to start sending us their "good stuff", but consumers thought they were seeing $8 wines with $25 price tags. Too late. You should have sent the good stuff to begin with, instead of hoarding it if for yourselves, and dumping your garbage on us.
Good luck marketing Clare Valley Rieslings and Hunter Valley Semillon -- great wines, but nobody wants them, especially at $20+/btl. I'd rather have a Michigan Reisling for $15.
Adrian Bryksa
Calgary, Alberta, Canada —  April 6, 2011 10:28am ET
Consumers don't care( for the most part) about the differences in Clare Valley or the nuances of Coonawarra because they haven't been educated to do so. I hold the importers who flooded the market with insipid, placeless plonk responsible for this. It is their greed driven efforts to move massive amounts of product with the least amount of effort that built an expectation that varietal wines from Australia have a certain, distinctive flavour profile and character. When these wines got expensive, consumers moved on to better values. Now, these wines are used as loss leaders strictly to continue to support sales numbers. Its quite disgusting actually.

Its sad that great producers like Grosset, Petaluma and others who are making wines with a sense of place are punished for this. The only way I see consumer behaviour towards wines like these changing is to see a major shift towards education about these areas like Clare Valley and drastic reduction in price. Until that happens, the $35 Grosset Riesling is going to languish on the shelf while the consumer loads up on the example from Barefoot at $9.
Johnny Espinoza Esquivel
Wine World —  April 6, 2011 11:36am ET
Another "thought provoking" piece from you Matt. You really know how to "spoil the party". Please, keep doing it that way.

Everyone can make a study case with whatever happened to Australia, we will never understand the whole dimension of the issues and their consequences.

To me the risen of other wine regions + the surplus of "2 buck chuck" wines + the cultish/unavailable wines, could be among the causes for Australia wine scenario to decline. And I'm not saying those are the ones. But the do really played a big roll one the whole movie.

It's really unfortunate such wines as the ones you mention are not easy to get. This could be another reason. Let me say this: If Argetina, which is right now as Australia was 10 years ago don't pay attention to the detail, it could face something similar as Australia did. The difference? You can get really good Malbecs from Argentina without paying the prices of having Catena Zapata or Achaval-Ferrer blue ship wines! How easy you can get the best from Australia? Let's take those Wendouree wines you mention. I do really like to have one bottle. And for sure the have to be really good. Truth is, chances are close to zero.

For sure, Australia is producing amazing wines and not only from the "Big Syrupy" Barossa region (Irony here. I love Barossa Shiraz!!!). The issue is, How can I get wines of that kind if distribution is not paying attention on them? Not to mention availability?

One last thing: Wine it's a matter of place. Syrah from the Rhone Valley it's different from Paso Robles or Washington or Chile? Why do I need to circumscribe just to Rhone wines from France? German Riesling is just as amazing as it can be from Australia. Or viognier. Please welcome regional diversity. This one thing I LOVE from wine. . .

Joseph Kane
Austin —  April 6, 2011 12:20pm ET
I agree Johnny. Regional diversity is imperative if you really want to experience wine. Mr. Mark, please go out, but a JL Chave Hermitage, a Cayuse Armada Syrah, an Elderton Command, and an Alban Reva. That might break the bank, but if you really want to see "Why Australia" you should take the plunge. All of those wines are syrah, and all of them are EXTREMELY different wines. They may have some varietal specific elements, but the styles of the wines are dramatically different, as are their flavor profiles. While some shiraz can surely be syrupy jam, some is also exceptionally refined, complex, balanced, stunning juice.

Don't give up on Australian shiraz, just do your homework before buying it. There are plenty of mind blowing bottles, at reasonable prices relative to California or Rhone wines, that will knock your socks off. Your question, "so why Australia?" can be easily answered:

Because it can be mind blowing, and different.
Vic Motto
Napa Valley —  April 6, 2011 12:51pm ET
The reputation of Australian wine was ruined by large commercial wineries mass marketing $7 wine, relegating "brand Australia" to a declining single price segment. There is no distinction in such wines, and they are unfortunately the face of Australia internationally.

As you point out, there are many wonderful premium wines from Australia that are not widely available. That's because there is no simple way for a fine wine producer to sell small quantities in remote markets (like the U.S.).

It looks like Australia will have to recover / develop its reputation gradually over time - one bottle at a time. Until then, we can continue to enjoy those special Australian wines that we can find.
Barossa Valley —  April 10, 2011 11:48pm ET
I live & work in the Barossa wine community I never have the sense of it being a big place of mass production. There are 180 wineries here of which 153 crush less than 500 tonnes, of that group 122 crush less than 100 tonnes. I live amongst 750 independent grape growers with the average vineyard size being 17 hectares & of these there are 430 growers with less than 10 hectares. There is over 1000 hectares of vineyards planted before 1969 here.
I wish you could see some more of our wines, I probably have the privilige of tasting every month over a 100 local wines & see 2 out of 100 over 15.5% alcohol. The Mataro, Grenache, Cabernet and Shiraz I taste is elegant and balanced I am shocked when I stumble across a jammy 16% red they are very very rare beasts in the Barossa. This is our fault we need to work out how we can get these wines to you at a fare price and not let the dumbed down wines of the world dominate your shelves

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