Grapegrower & Winemaker by Provincial Press Group

APRIL 2012

20 TOP

Australian Wine Company review

Plus NZ’s Top 5

AWRI

answers

laccase

problems

Preserve and protect WISA winner

Chairman’s Award

2011

Calls for national clean plant register

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April 2012: Issue 579

Contents features

winemaking

Wine regions dig deep to promote identity

63 R&D@Work

Laccase and rot: Is it there or not?

Series seeks human touch over terroir

Building presence in US wine market

In profile: Liam Heslop

Post-harvest care IT & website design

news

MyView: Andrew Pirie

Small ferments next step in mildew-resistant

sales & marketing

What influences the Chinese distributor's

trials 8

Cool summer has New Zealand preparing for late harvest

choice on which winery to represent?

International news

Wineries get on board event management

Regional Roundup: South Australia

Elegance lifts Blue Moon design

Top 20 Australian wine company review

Top 5 New Zealand wine company review

grapegrowing

business & technology 86

Reddaway: Interest rates: comparing oranges and apples

Fresh calls for national clean plant network

Team effort needed for happy resolutions

Sydney bottling line to cut freight costs

Pre-flowering defoliation as a vineyard

Appointments and accolades

management tool for cool climates

Demystifying website content management

systems

Ask the AWRI: Mixed cost and quality 90

effects from thinning 53

Organic fertiliser reaps high yields

Addressing fruit exposure in Granite Belt

Export figures support high expectations

Chardonnay

44 APRIL 2012

cover

regulars

The Top 20 Australian Wine Company Review, now also

includes the Top 5 New

TOP

AusTrAliAn Wine COmPAny revieW

Plus nZ’s TOP 5

AWRI

answers

laccase

problems

Zealand wine companies. Cover design: Chris Nicholls.

5 44 67 93 94

on the grapevine grapegrowing winemaking looking forward marketplace classifieds

Preserve and protect WISA winner

Calls for national clean plant register

Chairman’s Award

2011

February 2012 – Issue 577

www.winebiz.com.au

Grapegrower & Winemaker

In this issue April Publisher and Chief Executive Hartley Higgins General Manager Elizabeth Bouzoudis Editor Jen Barwick editor@grapeandwine.com.au Editorial advisory board Dr Jim Fortune, Denis Gastin, Dr Steve Goodman, Prof. Jim Hardie, Dr Terry Lee, Paul van der Lee, Bob Campbell MW, Prof Dennis Taylor and Mary Retallack Editorial Kellie Arbuckle Contributors Ben Rose, Danielle Costley, Jeni Port, Melanie Reddaway, Paul Williams, Peter Bailey. Advertising Sales Chas Barter sales@grapeandwine.com.au Circulation: Jenny Size subs@grapeandwine.com.au Production Chris Nicholls Subscription Prices Australia: 1 year (12 issues) $77.50 (inc. GST) 2 years (24 issues) $145 (inc. GST) New Zealand, Asia & Pacific: 1 year (12 issues) $110 (AUD) 2 years (24 issues) $210 (AUD) All other countries: 1 year (12 issues) $174.50 (AUD) 2 years (24 issues) $339 (AUD) Students (Aus only): 1 year (12 issues) $66 (inc. GST) Winetitles Pty. Ltd. 630 Regency Road, Broadview, South Australia 5083 PO Box 1006, Prospect East South Australia 5082 Phone: (08) 8369 9500 Fax (08) 8369 9501 info@winetitles.com.au www.winebiz.com.au Printing by Lane Print Group, Adelaide © Contents copyright Winetitles Pty Ltd 2012.

4 Grapegrower & Winemaker

EVER HAVE THAT dream when you’re trying to get somewhere by a certain time or date and you just can’t seem to get there... you go this way, and that way, you crawl through tunnels and leap tall buildings (also have a superwoman complex)... but to no avail. The Australian wine industry feels a little like that at the moment. The Riverland has enjoyed a pretty good vintage 2012 and the prices have reportedly lifted to reflect this. A short trip over the border and the Riverina continues to suffer prices below cost of production and the heartache of late season storms and flooding. US companies have started buying up cheap wineries, vineyards are selling and even some of the top Australian wine companies are shopping around for bargains. Yet, several wine supply companies have recently gone under or are doing it extremely tough – and are a long way from enjoying the effects of an industry swinging back up the pendulum of profit. But the light is on at the end of the proverbial tunnel... and would you like to know how I know. Tony Keys – chief author of the top Australian wine companies review and one of the most cynical commentators in the industry – has admitted cautious optimism.

Surely that’s a sign, right? Thank you to Tony, Max Marriott, who helped compile the New Zealand responses, Michael Major, editor of the Australian and New Zealand 2012 Wine Industry Directory (WID) and all the 28 wineries who participated in the 30-page review, beginning on page 16. The review is an interesting read. It’s an opportunity to see how the big guys perform, but it’s also a roadmap for where they intend to help take this industry. Other articles in this issue, well worth a read, include Kellie Arbuckle’s articles on the call for a national clean plant register and the interesting Alpha Crucis Winemakers Series, Danielle Costley’s story on regional branding and Steve Goodman’s research on how best to gain distributor attention in China. I would also like to hear your thoughts on the Top 20, or any of the articles in this month’s issue. Email editor@grapeandwine.com.au Happy reading Jen Barwick Editor PS: The 2012 Australian & New Zealand WID is now available. Be sure to get your copy, by calling the lovely Meredith on phone: 08 8369 9500 or email: info@winetitles.com.au

Contributors Ben Rose is the principal advisor of Performance Viticulture and is the Grapegrower & Winemaker’s bi-monthly viticulture columnist. Ben’s column, Vititalk, this month looks at a new take on an old tool, the wire-strainer, from page 59. He is happy to address any viticulture question you may have in this column. Contact Ben on email: ben@performanceviticulture.com.au

Paul Williams has worked in sales, marketing and technology for 30 years. Now specialising in South Australian wine tourism aimed at UK, Europe, USA and Asia through his website community www.winetrailsonline.com. Paul also provides consulting via www.wbct.com.au and teaches through TAFE in SA and Victoria in small business start-ups specialising in online marketing and global presence. In his column, on page 89, Paul takes the ‘eek’ out of website geek talk and advises on the best options for content management systems. You can contact Paul on 0417 187 771. www.winebiz.com.au

April 2012 – Issue 579

on the grapevine Penfolds’ winemaker named world’s best PENFOLDS’ CHIEF WINEMAKER Peter Gago was last month named the Winemaker’s Winemaker of the Year. Gago received the honour at ProWein – the world’s largest annual wine fair – in Dusseldorf, Germany, by a panel of international winemakers, the Institute of Masters of Wine and UK magazine, The Drinks Business. In accepting his award, however, the ever-humble Gago was quick to point out that he had a whole team mid-vintage, hard at work back home. “By years of Penfolds’ service (only 23), I am still almost the most ‘junior’ member of this team,” he said in a media statement. “I’m naturally chuffed and thankful. I’m also feeling guilty – it’s harvest and I’m 12,000 miles away! Payback, no doubt, awaits when I return in a day or so!” Started in 2011, the Winemaker’s Winemaker Award honours a winemaker respected and admired by their peer group in respect of what they have achieved with fine wines on the global stage. Ed’s note: One wonders, whether he was really made to shovel out the tanks upon his return or just, perhaps, expected to shout a round at the local pub.

Technology vs tradition GRAPEGROWER & WINEMAKER attended the recent Debate@The Waite last month, which posed the question ‘The future of the Australian wine industry will be based on technology, not tradition.’ Lining up on the affirmative side was the cast of stellar techno-crats, Professor Steve Tyerman, School of Agriculture, Food and Wine, The University of Adelaide; Dr Dan Johnson, managing director, Australian Wine Research Institute and Professor Vlad Jiranek, School of Agriculture, Food and Wine, The University of Adelaide. Opposing the argument was Brian Croser, AO, Tapanappa winemaker; and The University of Adelaide’s Professor Barbara Santich, School of History and Politics, and Dr Sue Bastian, School of Agriculture, Food and Wine, The University of Adelaide. The debate asked its speakers and audience to consider Australia’s future in the eyes of a more engaged wine consumer; those people who seek a unique story and ethical consumption and sustainability. With this in mind, it asked whether Australia’s future success hinged on its traditions and terroir, or on technology that affords it economic viability; science-proofed wine and some assurances against climate change. The end result, you ask? Once for and against argued, bribed and alluded to old age and ignorance (on both sides), it was technology is the future. Though, in the editor’s (and self-confessed luddite) humble opinion, an audience of staff and researchers from AWRI, SARDI and CSIRO may have swayed the results somewhat.

Chinese experience vintage 2012 About 38 Chinese wine trade professionals travelled through Australia’s wine regions last month to experience vintage and meet the winemakers. The guests from China visited the country from 26 February to 6 March as part of Wine Australia’s Regional Visitors Program, which seeks to develop a network of wine professionals globally to promote and support Australian wines in their market. The visitors, who were split into four groups and travelled across 12 Australian wine regions, included importers, distributors, retailers, food and beverage managers and media professionals. Coonawarra was one of the host regions, and according to vignerons association president Sue Hodder it is already seeing the benefits. Hodder told the local ABC that most winemakers who met the group had already seen follow-up interest in their wines. “Importantly we’ve got to educate the opinion leaders so that when we’re in essence competing with every wine region in the world for the Chinese market, that ours is a premium story and it’s just not about bulk wine, it’s about our heritage and quality,” Hodder told ABC. April 2012 – Issue 579

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what’s online Liquor minnows join forces in battle of the bottle-oh Liquor retailer Doug Evans calls it ‘’feeding the monster’’. The peculiar spectacle of independent bottle shop owners backing their trucks up to big box outlets such as Dan Murphy’s and filling up with cheap booze to then sell at their own stores, reports Business Day. Such is the pricing and buying power of outlets like Dan Murphy’s – owned by supermarket giant Woolworths – and Coles’ own network of 800 stores, that they can buy and sell beer, wine and spirits at a cheaper price than is available to the nation’s thousands of independent bottle shops.

NZ’s potential for top quality sparkling wine - expert “I’ve been making sparkling wine for many years, and if I had to make bubbles in just one place, I would make them in New Zealand,” Dr Tony Jordan told New Zealand Herald writer Jo Burzynska. This is praise indeed of the country’s potential given Jordan’s pedigree as one of the world’s leading fashioners of fizz and onetime CEO of Domaine Chandon.

Study evaluates impact of vineyards (US) A research project to help grapegrowers manage their carbon footprints and greenhouse gas (GHG) emissions is expected to yield results this year. Wine and Vines reported data from the study will be used to develop an online application to help vineyard managers maximise soil carbon storage and minimize GHG emissions. Researchers with The University of California, Davis, presented information about the project at the Recent Advances in Viticulture and Enology (RAVE) meeting on March 15.

.com.au Australia’s wine industry portal by Winetitles Australia’s wine industry portal by

Winetitles

Daily Wine News is a snapshot of wine business, research and marketing content gleaned from international wine media sources, with a focus on Australian news and content. To subscribe visit www.winebiz.com.au/dwn. Grapegrower & Winemaker

my view Defining cool climate Andrew Pirie

FOR A PRESENTATION at the recent International Cool Climate Symposium in Hobart, I was asked to put some rigour on the definition of ‘cool climate’ in viticulture. It seemed a reasonable request given that growing and researching grapes and wine in cool climates was the common interest of the 320-odd delegates. The term is commonly, and sometimes loosely, used to describe grapegrowing environments from the Granite Belt in Queensland to the southern reaches of Tasmania, hence the need for some rigour. In the context of the broader Australian industry grape supply and demand projections, it has been stretched to the point of describing regions not located in the Murray Valley. For instance, the Cool Climate Study Steering Committee of the South Australian Wine Industry Council as recently as 2006 included Adelaide, Barossa Valley, Clare Valley, Coonawarra, Langhorne Creek and McLaren Vale in their production tally of cool climate grapes. The outcome of such a broad boundary has led to confusion about the apparent oversupply of ‘cool climate’ grapes while at the same time we know that there is strong demand for Pinot Noir and Chardonnay grown under very cool conditions. As the temporary relief you now see the term ‘true cool climate’ being coined to try to differentiate the latter two production areas. The topic is highly subjective and to try to at least reach a meaningful outcome in this exercise I decided to look for a relationship between historical usage of grape varieties and climate. In this way a possible outcome was to define cool climate as where Pinot Noir thrives. To measure ripening potential of regions I opted for a simple index, growing season temperature (GST), now commonly used. It provides a more universal measure of growing season temperatures than MJT (mean January or July temperature for southern (SH) and northern hemispheres (NH) respectively). It is derived from the average temperatures of the growing season October to April for the SH or local to October for the NH. To calculate, simply take the maximum and minimum temperatures for April for a representative weather station, divide by two to give the average April temperature and then repeat the exercise for each of the months until October (SH) and finally derive the grand average for the season by averaging the seven means.

6 Grapegrower & Winemaker

The impact of global warming makes all boundaries of viticulture a moving target.

The principle is, in short, for optimum winegrape quality early maturing grapes are grown in the cool areas, mid-season grapes are grown in the mid-temperature zones and late ripening grapes are grown in the hot areas. There are notable exceptions but 80 per cent of the time the rules hold. The early ripening grapes are those like Chardonnay, Pinot Gris and Pinot Noir, which ripen approximately the same time as Chasselas. These grapes have evolved in cool areas (GST 14.5-15.5°C ) and ripen at the end of September in the NH and the end of March (early April in the cooler areas in the SH). Mid-season grapes are those such as the Bordeaux varieties, Cabernet Sauvignon and Semillon, which also ripen at roughly the same time if grown in regions with a GST 1.2 to 1.5°C warmer, i.e., 16.5-17°C. Typical late ripening grapes are traditionally grown around the Mediterranean basin and include Carignan, Grenache and Monastrell (Mourvedre or Mataro). These ripen 30 days after Chasselas whereas the mid-season cultivar ripen 20 days later. These late maturing grapes ripen again www.winebiz.com.au

at the right time August to September (NH) or February to March (SH) in warm regions with a GST of about 18.0-20°C. Châteauneuf-du-Pape has a GST of 18.4°C. The impact of global warming makes all boundaries of viticulture a moving target. Nonetheless, I think it is important for resource allocation in the Australian wine industry that we categorise viticultural climates and understand the strengths of each temperature zone. The notion that grapes might have specific climatic niches is worth exploring further, especially regarding the wider Australian context. This concept goes against the democratic and unconstrained history in Australia of growing any cultivar in any location. The opposite is found in legislation-controlled European areas such as France where the French Appellation d’Origine Contrôlée (AOC) fixes viticultural practice according to time-honoured tradition. Could it be that in our pursuit of freedom in Australia we have not given enough credence to one of the Viticulture 101 principles established in the old countries? I have just been reading about the growing interest in the cultivar Vermentino in the Riverland districts. It is a Third Epoque grape thriving in warm climates. Its success in regions with a GST as warm as 20°C GST is predictable. Therefore, the success of ‘exotic’ late ripening grapes in warm climates and the benefits of using early ripening grapes in Tasmania are part of the same underlying principle. It has been noted that consumer acceptance and tradition (read fashion) play a large role in constraining the choice of cultivars made into table wine. And yet despite this, Australian consumers are demanding a wide range of imports to increase the available spectrum of wine styles. In my view fashion is no longer a justifiable reason to plant grapevine cultivars outside their agronomic comfort zone. I believe fashion has driven unsustainable viticultural practice. By the way, the boundaries of ‘cool climate’ were proposed as GST 14-16°C with ‘very cool’ between 13-14°C GST.

Andrew Pirie is one of Australia’s most respected winemakers. He helped establish Tasmania’s largest and most important vineyards and wineries and is a passionate champion of cool climate viticulture and winemaking. April 2012 – Issue 579

Small ferments next step in mildew-resistant trial 2012 vintage will be a year to note for more reasons than quality and size. It is also the year where groundbreaking viticulture research into mildew resistant vines moves from the vineyard into the winery. The CSIRO has started small-scale ferments from new grapevines, bred through marker assisted breeding (MAB) methods, which are resistant to powdery and downy mildew. Small-batch winemaking of these

grapes is the next step in assessing thousands of vines of all-new varieties that were developed by CSIRO using classical breeding techniques and then screened for mildew-resistant genes. Grapegrower & Winemaker looked at the research being undertaken at CSIRO in its December issue, which by using MAB has markedly reduced the time and cost involved in developing classically bred new varieties. MAB allows researchers to screen the

seedlings for the presence of the desired genetic profiles relating to disease resistance, berry colour and fruitfulness. Selected seedlings were then transferred into an unsprayed block in the field and, over the past two years, no mildew infection has been observed on these test vines. Now, wines from the vines are being assessed by a panel of winemakers to identify those that produce the desired flavour and aroma characteristics.

Vale Trevor Mast The global wine industry has mourned the loss of the highly respected Victorian winemaker, and creator of the Mount Langi Ghiran Shiraz, Trevor Mast, who passed away in March, aged 63. Mast’s death as a result of pneumonia followed a five-year fight against early-onset Alzheimer’s disease. Initially employed outside the industry, Mast discovered wine in 1969 and in 1970 began a degree in Germany, at the Geisenheim Institute. After graduating, he spent a few years completing vintages overseas, working in Germany, Hungary, Portugal, France and South Africa before returning to Australia to take up a position at Seppelt, Great Western, in 1975. Though it wasn’t long before he moved on, it was at Seppelt that he first tasted Mount Langi Ghiran (MLG) Shiraz. He went on to become winemaker at Best’s Wines, Great Western then in 1987 he and business partner Ian Menzies purchased the Mount Langhi Ghiran winery and soon launched into an internationally acclaimed winemaking career. In 1996, he was named winemaker of the year by Robert Parker’s Wine Advocate. In the same year, the ‘94 Langi Shiraz was pictured on the cover of Wine Spectator, with Australia’s most established icons,

April 2012 – Issue 579

Penfolds’ Grange and Henschke’s Hill of Grace. “Mast was a ‘worker’ who considered himself a labourer and had little stomach for the glamour side. Humble but not one to suffer fools, single-minded and driven but also generous, Mast was a unique personality who created a unique wine,” Huon Hooke wrote in his Sydney Morning Herald column. MLG general manager and viticulturist Damien Sheehan said: “Working with Mast was like being on a quest, a magnificent adventure full of diversions, some wrong turns, some right turns, you never knew what to expect but you always knew you wanted to be a part of it.” He is survived by his wife, Sandy, and four daughters, Daliah, Inika, Anya and Sophie.

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vintage report 2012

Cool summer has New Zealand preparing for late harvest Kellie Arbuckle

MOST WINE REGIONS in New Zealand have experienced a slightly cooler summer this year, which has made for a longer and slower ripening period for vintage 2012. The first grapes of the grape harvest had been picked in the northern regions by the start of March 2012 but, despite the late start, New Zealand Winegrowers CEO Philip Gregan said good flavours in the grapes were expected. “The weather has also impacted the flowering and fruitset in some regions, reducing the size of the crop as a result,” Gregan added. A pre-vintage survey, which was complete by the start of March, tipped the harvest estimate at about 300,000 tonnes of grapes, down from the recorded 328,000t in 2011. Gregan did note, however, that previntage estimates of crop size are not an exact science. “With the variable crops that wineries have reported, this makes crop estimation more difficult than normal. Accordingly, the harvest could be up to 20,000 tonnes smaller or larger than our current estimate,” he said. Gregan said growers and wineries were hoping for a typical New Zealand autumn to deliver the final quality flourish to the vintage.

Wairarapa The vintage 2012 season in Wairarapa kicked off to a promising start with relatively fine spring weather, despite a few frost events. Summer was a bit cooler and crop levels were showing signs of potential – until the rain came. “The sort of weather pattern that seems to be the norm for the 2012 vintage kicked in, with cold and wet patches at critical times for a lot of the main varieties in our area,” Gladstone Vineyard winemaker Gerhard Smith said. “Pinot flowering could be fantastic or miserable, depending on timing of flowering and the weather pattern at the time.” He said crop levels at Gladstone Vineyard were down between 5 and 30 per cent, and ripening was about two weeks behind a normal year. The adverse weather conditions also caused pressure in terms of powdery

8 Grapegrower & Winemaker

Growers across New Zealand have been dealing with a late vintage with cooler than average conditions. Photo courtesy of New Zealand Winegrowers.

mildew, but Smith remains optimistic. “On a positive side, our growers manage most vineyards to very low cropping levels so I’m still optimistic about getting a good result in terms of fruit quality this year, but a lot will depend on the autumn weather conditions and being smart in the winery to manage fruit with varying ripeness levels,” he said.

Canterbury Like Wairarapa, the Canterbury wine region has encountered grey and cooler than average conditions, which has resulted in mixed fruitset and considerable vegetative growth. Wines of Canterbury coordinator Gill Walsh says rainfall patterns and humidity have caused some disease problems, such as downy mildew, which has been managed by persistent leaf plucking and removal of laterals to reduce canopy density. “Despite the weather, a healthy crop is out there for most varieties and we look forward to the upcoming harvest,” Walsh said.

about 15-20% of their crop, depending on variety,” Flatman said. “However, if you talk to most viticulturists, growers and winemakers, there is an air of positivity around. With lower crops, growers have been able to secure contracts for most, if not all, of their grapes. “Winemakers are excited with the small berry size as they continue their search for fruit concentration and those viticulturists who got through the major tasks, like leaf plucking, and had a good tight spray program are happy that we will get some reasonable quality fruit.” With the slightly cooler conditions, this season seems to tracking along at about the same rate as the 2010 vintage, he said. Picking was expected to start at the end of March or the start of April. Flatman predicts there will be an easier finish to vintage, with forecasts pointing to a drier than average conditions until June.

Nelson Rainfall that was high enough to cause flooding in the city of Nelson made for a tough start to the vintage 2012 season, with extreme disease pressure prevalent in the wine region. According to Neudorf Vineyard viticulturist Richard Flatman, the vineyards on the Moutere Hills received 282mm of rainfall, while the vineyards on the plains received 441mm of rainfall (193mm in one 24-hour period) throughout December. “This affected flowering right across the district, with most vineyards losing www.winebiz.com.au

Blackenbrook Reserve Pinot Noir, in Nelson. April 2012 – Issue 579

Central Otago Winegrowers Association president James Dicey.

Hawke’s Bay The fruit in the Hawke’s Bay wine region is reportedly clean with no disease, despite a lot of overcast and rainy days, according to Hawke’s Bay Winegrowers Association Inc executive officer Lyn Bevin. “It’s [vintage] late and we need some warmth for ripening,” Bevan said, at the start of March. The grape harvest in Hawke’s Bay is expected to be slightly down this year, by about 5% compared with previous years. The lower than usual temperature has also meant acid levels in the grapes are lower.

April 2012 – Issue 579

Central Otago

Marlborough

Like most New Zealand wine regions, Central Otago has experienced an early start to the autumn coolness, along with a series of minor rain events. The season started with a warm spring with flowering and fruitset, and was followed by a hot and dry summer, allowing mild water stress to be induced in the vines, resulting in tight small bunches. By late January, the weather had cooled down and a protracted veraison enabled colour thinning to be used to even up fruit ripeness. The normal autumn coolness has come early, along with a series of minor rain events. Cent ral Otago Winegrowers Association president James Dicey said the balance of the season had been “delicately poised”. “If things continue with no more significant rainfall, the vintage should be an excellent one,” Dicey said. “Growers and wineries are looking forward to an excellent vintage with balanced yields and superb quality fruit.” By the start of March, most growers had completed fruit thinning and all nets had been applied to prevent any bird damage. Dicey said there is an increasing demand for fruit from the Central Otago wine region. “The region has seen all available fruit contracted at firming prices,” he said at the start of March. “With no significant additional developments currently on the horizon and increasing demand, future price increases are expected.”

By 9 March, vintage in Marlborough was running two weeks later compared with vintage 2011 and one week behind vintage 2010. Growers were hoping for a warm and sunny March and April to push ripening along steadily, according to Wine Marlborough general manager Marcus Pickens. “The top of the South Island, where Marlborough is located, usually experiences the highest sunshine hours in New Zealand,” Pickens said. “However, the overall sunshine hours and average temperatures for the growing season for the 2012 vintage are behind average.” Grapegrowers across Marlborough are reporting lower than average yields, which has resulted in reduced pressure on the vines to ripen their crop. Marlborough viticulture consultant Dominic Pecchenino said the fruit looks good, even though the weather data would suggest otherwise, and the potential is still there for a strong vintage. “The longer maturation period this season is likely to provide a good base for flavour retention,” Pecchenino said. “Canopies are also in good condition and disease pressure is low. A bit of the usual summer weather from here will see us through to a great harvest” Pecchenino estimated that the harvest for Chardonnay and Pinot Noir for sparkling wines would start around 16-19 March. The harvest for premium table wine, however, isn’t expected to get under way until the first week of April.

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Grapegrower & Winemaker

international news SOUTH KOREA

Consumption to grow to 2015 Wine consumption in South Korea is tipped to rise by nearly 27 per cent from 2011 to 2015, new research by Vinexpo suggests. A study by UK-based the International Wine and Spirit Research shows consumption rose 8.4% last year over 2010, and that consumption growth is likely to increase well into 2015. One of the major drivers of growth was the Free Trade Agreement between South Korea and the European Union, which entered into force in 2011 and introduced easier market access for European wines. Vinexpo also predict that red wine consumption will increase from 2011, which could also contribute to renewed growth in South Korea where red wines account for three quarters of all wines drunk in South Korea. At the same time, consumption of Korean wines should continue to decline in favour of imported wines. According to the study, over the 10-year period from 2006 to 2015, it will have fallen by 53.5%. La Journée.

CHINA

Moët Hennessy to produce red wine in China Moët Hennessy has struck a deal with a leading enterprise in the Chinese wine industry to produce red wine in the mountainous Yunnan Province in south western China. Moët Hennessy has signed a joint

venture agreement with VATS Group to build a winery and vineyard covering about 30 hectares in an area located 2400m above sea level in Shangri-La. Christophe Navarre, CEO of Moët Hennessy, said: “Thanks to the creation of this winery joint venture we will be able to offer Chinese consumers a premium quality red wine within four to five years.” “The partnership with VATS is a new step in our long-term commitment in China.” The new investment comes five years after Moët Hennessy’s acquisition of Chinese white spirit brand Wenjun, and just one year after an investment aimed at creating a premium sparkling wine in Ningxia. La Journée.

UNITED KINGDOM

UK demand soars for low alcohol wines A report by Wine Intelligence has found that consumers in the UK’s independent specialist wine retail sector are spending more and increasingly requesting lower alcohol wines. Almost half of the retailers who answered the survey said they expected sales of wine between £8 and £15 to grow over the next 12 months. Retailers also reported growing demand for wines below 12% ABV, and for lighter, fruit-driven red wines. Many retailers in the £300 million revenue category reported positive Christmas trading, with sales of Prosecco

and English Sparkling wine rising. There were, however, several hints that previously high-spending customers were trading down: data from the report suggests that wines over £20 would not grow sales in this channel over the next 12 months. Wine Intelligence.

SOUTH AFRICA

New grape and wine research hub A new Institute of Viticulture and Oenology in South Africa is expected to boost the country’s competitiveness on an international scale. The recently IVO will be housed at Stellenbosch University and is intended to promote world-class teaching, research and technology, development, focussing on projects that will strengthen the relevance and quality of the country’s offering on international markets. The Institute, which was recently established through a joint venture between the South African wine and table grape industries and the university, will also seek to facilitate international relationships with other wine-producing countries. A spokesperson for IVO said that now that a structure for the institute has been created, the next step would be to seek funding from the private sector. South Africa receives limited government support for research and development. La Journée.

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April 2012 – Issue 579

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regional round-up

Wineries embrace festive spirit and go green Adelaide Cellar Door Wine Festival

Adelaide Hills Hills set green goals

McLaren Vale Harvest Festival

More than 150 wineries from 12 South Australian wine regions came together under the one roof in February for the second Cellar Door Wine Festival. Visitor numbers rose to 6500 at this year’s event – a 30 per cent increase from last year’s festival – which took place 24-26 February at the Adelaide Convention Centre (ACC). During the festival, a series of 22 food and wine master classes were held, with all tickets selling out and more than 660 people attending. More than 30,000 bottles of wine were either consumed for tastings or sold over the counter to visitors during the festival. ACC exhibition manager Alex Tietgen says the festival is a unique event that attracts people from across the country. “The festival makes it easy for people to sample the best of South Australian wine and local produce including many boutique producers that don’t have a traditional cellar door and therefore don’t normally enjoy this level of exposure,” Tietgen said. Tietgen said 95% of festival visitors intend to visit at least one of the wineries they have discovered at the Cellar Door Wine Festival in the next six months – a potentially 6175 new clients the festival is helping drive to wineries own cellar doors.

Members of the Adelaide Hills community are working towards making the district Australia’s leading wine region devoted to environmental stewardship. The Adelaide Hills Wine Region (AHWR) environment committee recently embarked on the development of an Environmental Management Plan (EMP), and is calling on local residents for contributions. AHWR environment committee convenor Janet Klein says the plan will be used to support local wine producers in their sustainable practices. “We are a region already committed to environmental stewardship, and the scope of an EMP will bring the opportunity to grow even further this commitment – for the benefit of our beautiful region and for the long term health of our member businesses,” Klein said. The plan will be used to identify an environmental vision, report progress towards goals, identify threats and develop an action plan. The EMP is expected to be rolled out in mid-2012. For more information or to make a contribution, contact Mary Retallack from Retallack Viticulture (on behalf of AHWR) on (08) 8339 3324.

Planning is already under way for a second Harvest Festival after the inaugural food and wine extravaganza attracted more than 5500 people. McLaren Vale showcased the best of its wine and local produce at its first Harvest Festival from 13 January to 4 February. Harvest Festival secretary Jenni Mitton said “we couldn’t have been happier with the outcome” and that planning for a 2013 event was already under way. “The format will be similar, however, there are already loads of new ideas for improvement and even more exciting activities for all ages,” Mitton said. Proceeds from the Harvest Festival were donated to the McLaren Vale and Districts War Memorial Hospital.

Biodiversity plan started Grapegrowers and wineries in McLaren Vale are uniting to take the region’s biodiversity to a new level. In addition to under ta k ing biodiversity workshops on their properties, the local wine community is working on a Regional Biodiversity Plan to help enhance vineyards the green way. The plan was made possible after the McLaren Vale Grape Wine and Tourism Association received a Community Achievement Grant from the Adelaide and Mt Lofty Ranges NRM Board. The grant will be used to help support stage one of the plan. This includes mapping existing vegetation and vineyards in the region, consultation with major stakeholders and guide biodiversity actions by the wine industry in the region. A second stage, if funding becomes available, would comprise a detailed action plan for the McLaren Vale wine industry to contribute further to biodiversity in the region.

Langhorne Creek Festival gets alternative

The Cellar Door Wine Festival attracted record numbers this year, with 6500 people attending.

12 Grapegrower & Winemaker

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The Langhorne Creek wine region is in revival mode as wineries from across the region unite to make the region standout on the national wine map. In attempt to raise awareness of the region and what it has to offer, wineries from the region have committed to a number of events for 2012. The Love Langhorne Creek festival from 11-12 February marked the start of April 2012 – Issue 579

regional round-up

stand out in the crowd custom made packaging for a stand out presentation

The Love Langhorne Creek festival debuted in February and attracted about 200 people over the two-day event.

Custom Print & Stock Muselets

this commitment, when wineries offered free tastings of their alternative and traditional varieties to the public. Langhorne Creek Grape and Wine Incorporated marketing officer Bek Schapel was impressed with the turnout. “We estimate that around 200 people attended over the two days, which we were extremely happy with for a firsttime event,” Schapel said. “Everybody already knows about the amazing red blends from Langhorne Creek, so we wanted to introduce them to some of the less mainstream varieties that are grown and wines made in the region,” she said, noting a significant amount of interest in Malbec. The Langhorne Creek wine region is planning on holding events that encourage new and returning visitors every quarter. For more information on these events, visit: www.langhornewine.com.au.

Barossa New chapter for the Barossa

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Barossa associations are working together on a range of initiatives that aim to lift the region’s status to becoming the leading wine, food and tourism experience. The Barossa Grape and Wine Association (BGWA) has teamed with Barossa Food and Tourism Barossa to establish a number of initiatives to re-energise the region. The region now has a new, consumerfacing campaign, logo and web-platform, all of which are set to go live by June 2012. BGWA communications and promotions manager James March said the idea was to revitalise the region. “We hope that by creating a visual identity and framework, people will be compelled to think about what Barossa www.winebiz.com.au

stands for in its food and wine,” March said. “The result is a new suite of themes, engagements and tastings – quite literally, new ‘chapters’ to the Barossa story. “This is not about rewriting an old story, but rather about introducing a new chapter and inviting our audience to turn the page.”

Barons declare vintage The Barons of the Barossa celebrated the 2012 Declaration of Vintage in February with the traditional Harvest Parade and award ceremony. Ray Beckwith, who recently celebrated his 100th birthday, was recognised for his services to wine industry; his honours include the Maurice O’Shea award, an honorary doctorate from the University of Adelaide and a Medal of the Order of Australia. Seppeltsfield senior winemaker Fiona Donald was named Barossa winemaker of the year, while Barossa vigneron of the year went to John Schiller, a fourth generation Barossa farmer with vineyards in Nuriootpa and Ebenezer. Each year, a plaque is placed in the footpath in Tanunda as part of the Baron’s Wine Walk of Fame, honouring a late Baron who has made a major contribution to the Barossa. This year, a plaque honouring Len Evans – the first regular wine columnist in Australia – was presented to his wife Trish Evans. The Barons of the Barossa was founded in 1974 by a group of influential Barossa winemakers. The Fraternity was modelled on similar organisations which exist in Europe whose aims are to promote wines of the regions and carry out philanthropic and charitable works. April 2012 – Issue 579

20 TOP

Australian Wine Company review

Plus NZ’s Top 5

Compiled by Jen Barwick (editor), Tony Keys (Australia) and Max Marriott (New Zealand) Welcome to the annual top 20 review, which for the first time includes New Zealand’s top 5. The following special 30-page feature delivers Australia’s and New Zealand’s annual wine company review. It includes interviews with the company’s top decision makers and communicators, the latest industry statistics and a picture of where these companies intend to direct Australia and New Zealand’s wine industry on the national and global stage. A big thank you to writers Tony Keys, of the Key Report, and Max Marriott, of Marriott Wine Ltd, in New Zealand, and Michael Major, editor of 2012 Australian & New Zealand Wine Industry Directory, who have dedicated considerable time and effort into producing this review. Also a sincere thank you to all the companies who continue to participate in this review. April 2012 – Issue 579

Contents 16 Tony Keys introduces the Australian review and ranking 17 Top 20 wine company biographies 26 Top 20 production and branded wine sales 27

Top 20 Q&A

35 Top 5 New Zealand introduction and company profiles 37

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Top 5 Q&A

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Industry treading cautious path to optimism Tony Keys

TO THE END of December 2011, Australia exported a total of 703 million litres of wine, valued at $1.89 billion – a 10 per cent drop in value on the previous year. The 12-month drop seems less important when viewed alongside the results from 2007, which saw export sales valued at close to $3b for around 750 million litres. In four years, a billion dollars in value of exports has disappeared. On the home front, the strong Australian dollar – which is largely blamed for the large export value drop – has opened the door for imports, which grew by 4% in the 2010-11 financial year. The lost billion dollars of exports combined with the drop of 10 million litres of Australian wine on the domestic market has, in the main, been hardest felt by Australia’s top 30 wine-producing companies. This year, the top 20 Australian wine companies has stretched to 23, based on an estimated sales turnover of more than $20 million, and has some noticeable absences, such as Kingston Estate, who declined to participate in the review. I estimate Kingston would sit somewhere around the 12-14 mark. Also, not included in this Australian list is The Wine Group. Based in San Francisco, chief executive David Clark who did respond, albeit briefly, says the US company is responsible for: “One out of every five glasses of wine consumed in America”. Last year, The Wine Group acquired the Loxton winery, based in the Riverland region of South Australia, from Australian Vintage. The Loxton winery is capable of crushing 90,000 tonnes. Added to the winery it already owns in Griffith, The Wine Group could, at full production, be responsible for producing more than 80 million litres of wine. Clark says the scope of its current operation includes the provision of bulk wine to select Australian retailers, but its main focus will be to supply roughly 50-75 million litres of bulk wine to the US market per annum, where it will bottle a dozen labels – three of which are among the top five Australian brands in the US. Littore Family Wines could possibly hit the lower end of the Top 20 rankings, as well as Westend Estate Wines and Nugan Estate but no details were supplied, making it difficult to verify. This review does, however, clearly

depict the concentration of Australian wine production. Fifteen wine companies are responsible for 74% of Australia’s total wine production. Altogether, about 86% of total Australian wine production is in the hands of 34 producers. The buzz word among Australian wine exporters is ‘China’ but as exciting as it seems, its potential needs tempering with the knowledge that the rest of the world’s wine-producing countries are looking in the same direction. In 2011, there were 812 companies exporting Australian wine to China, with only 304 to the UK. However, the UK market (although declining) is six times the size of the Chinese one in volume and twice the size in value. Exactly what these 30 largest producers want is sometimes easier to surmise than to factually establish. How much of what they want is for the good of the industry, and how much is self-interest? After several years of decline and the harsh reality the strong Australian dollar has imposed on the industry, there is still a reluctance to face the whole problem. Some of the answers submitted appear to contain more wish than fact. The question, asking what each company thought was an ideal vintage size for Australia, was rather revealing: 42% of respondents ignored the question, 21% went for the lower figure of 1.2 million tonnes, and 37% at 1.5 million tonnes (rounding applied). The truth lies in the cost of grapes because at 1.5 million tonnes and above grapes are relatively cheap (a large amount

16 The Australian & New Zealand Grapegrower & Winemaker

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bought for below cost of production) and at 1.2 million tonnes they would cost the wine producers more, possibly preventing wine to be sold at lower pricepoints. In recent private conversations with Wine Australia chief executive Andrew Cheesman and Winemakers’ Federation of Australia chief executive Stephen Strachan there was a feeling of optimism that was more genuine than I have seen or heard in many years. It is optimism I share; new investment in the industry has started to appear and vineyards that have had the ‘for sale’ sign on the gate for years are now sold. Producers, marketers and consumers are beginning to understand what Australian wine really has to offer. My own view still leans towards the industry continuing to shrink but it is a view I am happy to have proven wrong.

RANKING

COMPANY NAME

Treasury Wine Estates

Accolade Wines *

Orlando Wines

Casella Wines

Australian Vintage

De Bortoli

McWilliam’s Wine Group

Brown Brothers

Warburn Estate *

Yalumba *

Tahbilk

Angove Family Winemakers

Grant Burge

Lion (Australia)

Taylors Wines

Peter Lehmann

Garacama (Andrew Peace Wines) *

The Warren Randall Group

Tyrrell’s Wines

Zilzie Wines

Wingara Wine Group*

Berton Wines

Beelgara

Rankings based on annual income from 2010-11 financial year. Income provided by individual wineries as part of top 20 survey, unless noted with an *. *R ankings based on estimates using resources such as annual reports, other Winetitles publications, including the 2012 Australian and New Zealand Wine Industry Directory. April 2012 – Issue 579

Treasury Wine Estates Branded wine sales* 2 Wine production* 2

Treasury Wine Estates (TWE) is Australia’s largest wine company, with the highest annual turnover but second in terms of wine production and case sales. In May 2011, TWE was spun out of the Foster’s brewery group and listed on the Australian Stock Exchange. It has an enviable portfolio of major brands, 54 in total, and owns or leases more than 8000 hectares of vineyard (the largest vineyard portfolio owned by a wine company in Australia°). Topping the brand list is Penfolds, which can lay claim to Australia’s most famous and

widely recognised brand. Global sales of TWE brands for the year ending June 2011 amounted to $1.76 billion. About $0.79b of that figure is derived from US net sales of, predominantly, the California-based Beringer, but also Penfolds’ luxury range, Stags Leap and Etude with strong support also from the emerging brands, such as Cellar No. 8 and Colores Del Sol Wines. Today, TWE is a different company than it was a couple of years ago, and could change again in another couple of years. Speculation leans towards the possible off-loading of Beringer. There is also an argument that certain brands lose out because there are simply too many great names in the portfolio. Would Wynns, Wolf Blass, Lindeman’s, Rosemount, Seppelt, Yellowglen, Leo Buring or any of the other 47 labels do better out of the group? TWE corporate communications manager Sue Rana provided the responses for this review, with a big emphasis on brand. TWE’s chief executive is David Dearie (pictured above), who took on the role in 2009 and has steered the company through its demerger.

2 David Dearie

Accolade Wines Wine production** 1 Case wine sales** 1

In tandem with Treasury Wine Estates, Accolade Wines has undergone substantial change in the past 18 months. In December 2010, Constellation Brands (CB) announced it was going to dispose 80 per cent of Constellation Wines Australia and Europe to Sydney-based CHAMP Private Equity (CHAMP). The deal was finalised on 31 January 2011.

Troy Christensen

Constellation disposing of these assets was not a surprise. However, the low value placed on them was just $290 million in total, with CB receiving $230m for the 80 per cent. Along with 1800 staff based in various parts of the world, CHAMP picked up Australian brands, including Hardys, Banrock Station, Houghton, Omni, Berri Estates and several others. The Kumala brand from South Africa was also included in deal, along with Echo Falls from California and the mutable country brand Stowells, sold only in the UK. The acquisition also included 50% of the UK’s largest drinks distributor, Matthew Clark and a state-of-the-art bottling facility, which must rank as one of the best in the world. The following figures were sourced from the CB financial 2011 year, which ended in February, so is, in effect, the 2010 calendar trading year. Sales for that period were US$774.7m ($716.5m) down 17% from the previous year (or

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australian wine companies

a $US106.6m loss). It would be good to report a turn of the tide, however, not receiving any detail from Accolade and considering the current climate, a decline of 5% was estimated (estimating total sales at $680.7m). The next question being, how much of that is Australian? It is the way of private equity firms to buy a company, run it for three to five years, then float or sell it at a profit. Another approach is to look at each segment in detail and see if more can be made by off-loading various parts. There are many ways to divide Accolade, so we’ll have to wait and see what develops. Accolade Wines national public relations manager Anita Poddar provided the responses for this review. Troy Christensen remains as CEO of Accolade Wines, having held the position in its former guise as Constellation Wines.

Orlando Wines (Premium Wine Brands) Wine production** 4 Wine case sales** 4

Pernod Ricard Australia is responsible for the distribution of the company's global brands of champagne and spirits in Australia. Wine production, for its brands including Jacob's Creek, Brett McKinnon

Wyndham Estate, Gramps, Richmand Grove, Morris, Carrington and Poet’s Corner, come under the auspice of Orlando Wines. However, Jacob’s Creek being its largest Australian wine brand, with an estimated income of $250-300 million, is managed under Premium Wine Brands (PWB), the global brand manager for Pernod Ricard. Other PWB brands include Brancott Estate (NZ), Graffigna (Argentina), and Campo Viejo (Spain). The company is responsible for 1662ha of owned or leased vineyard° in Australia and employs about 200 staff in Australia. According to industry analysts Nielsen, in figures to July 2011, Jacob’s Creek kept its sixth position in the top selling UK wine brands, despite recording a 20 per cent decline in sales. In 2011 (year ended 30 June 2011), the company reported Jacob’s Creek sales of 6.8m cases. In the half-year results to end of December 2011, the company reports, “poor sales of Jacob’s Creek in the US is a depressed market for Australian wine.” Canada and the UK also shows a decline. The bright spot is China, where Jacob’s Creek is credited along with Martell and Scotch whiskies, which have increased sales overall by 23%. The Jacob’s Creek increase in China alone was 42%. Without this, the global sales of Jacob’s Creek in the first half of the 2012 financial year would have been more than 3% down in volume and 1% down in value. Pernod Ricard has established routes to market across Asia and owns many recognised leading spirit brands, such as Martell Cognac, Absolut vodka and Chivas Regal. Having an established distribution helps when wanting to add another product, such as wine. The company appears to be re-examining some markets and looking with interest at others, with the responses to the review provided by Brett McKinnon, managing director of Orlando Wines.

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John Casella

Casella Wines Wine production*: 3 Wine case sales*: 3

The Casella Wines brand, [yellow tail], has been hugely influential in the story of Australian wine, though the tale it tells has not been to everyone’s tastes. And, like many Australian wine companies, Casella’s revenue is declining (13% in the past financial year). Not that it has held the company back from investing. It has increased its directly-owned vineyard land by 947ha this past year, amounting to 2243ha owned and co-owned by Casella. The new property acquisitions would see it ranked in the top five companies for vineyard ownership in Australia°. They also buy from many growers in NSW and South Australia and transport the grapes to the winery at Yenda in the Riverina. Managing director John Casella, pictured above, who supplied the responses in the Q&A, starting on page 26, has concerns the proposed carbon tax (to be levied on trucks), will add considerably to his costs. Volume sales have remained flat at

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April 2012 – Issue 579

around 12 million cases, with two-thirds of the sales going to the US. The 2011 vintage saw Casella crush 160,000t of grapes and the company has predicted an increase to 175,000t for the 2012 vintage. Export is the major part of Casella’s business and is reflected by long in-depth answers concerning various markets. Regarding the UK, the company’s focus is on the promise of convenience stores and Casella presents some interesting figures on the advantage of refrigeration space in the Q&A. Asia also gets vast coverage and Yellow Tail can now be found in 10 countries across the Asia region.

Australian Vintage Wine production* 5 Branded wine sales* 5

The share price for Australian Vintage (AV) has had a year’s range of 22-38 cents. In 2003, the range was $3.684.92. In 2005, the price was above $5 for much of the year. Roughly half of 2009 saw the share price below 20c. There have been times in recent years AV has looked close to collapse. The company is still walking a tight line but there are bright spots appearing here and there. The financial half-year to 31 December 2011 saw sales increase 4.4% to $116.4 million. Net profit was down 3% to $3.7m partly due to reduced sales of second-tier branded products in Australia. AV owns or leases 2901ha of vineyard. It also produces six ‘tertiary’ level brands: McGuigan, Tempus Two, Nepenthe,

Miranda, Yaldara and Passion Pop, and employs a workforce of 700-plus people, at peak vintage times. It has three main markets (figures rounded): • domestic $103m (2010 $107m) • UK/Europe $99m (2010 $103m) • North America $12m (2010 $15.5m) • others $11m (2010 $12.5m). A positive or negative could be AV’s reliance on just three customers who account for $108.7m of sales, up from $103.6m the previous year. One overseas customer (likely Tesco) is responsible for $75.8m. Two domestic customers (likely Coles and Woolworths) contribute $32.9m. One positive event was the disposal of the Riverland-based Loxton winery for $27m to The Wine Group (see page 16). Celebrations were also in order when Neil McGuigan was voted International Winemaker of the Year (for the second time) at the International Wine and Spirit Competition, in the UK, last year.

De Bortoli Wine production: 7 Branded wine sales: 6

Treasury Wine Estates and Accolade Wines have many famous Australian wine brands within their portfolios. What they lack is personality behind the brands. This is the strength of the family company, De Bortoli, who have real people with a name matching that on the wine bottle. Trading has been flat for the company over the past couple of years but profits have increased slightly. Yarra Valley

operations manager Leanne De Bortoli and her brother Victor, export director, answered the questions for this article. De Bortoli has three cellar door locations, in the Yarra Valley, in the Hunter Valley and the other at its original base, in Bilbul, Riverina. It owns or leases about 820ha of vineyards in these three locations, as well as King Valley, in Victoria. It produces wine for approximately 29 wine brands. Family solidarity and hard work are cornerstones of the business and are constantly revealed in conversation. De Bortoli has been involved in the tough UK market for over two decades and are not prepared to abandon the hard work already put in. They admit sales are flat but are optimistic that opportunities from 2011 will turn into reality in 2012.

McWilliam’s Wine Group Wine production**: 9 Branded wine sales ** 8

Forever tied to the Hunter Valley via its Mount Pleasant Wines and to the Riverina with its Hanwood range, McWilliam’s Wine Group is a bigger company than many realise. Throughout the 1950s, ‘60s and ‘70s the company was in a form of hibernation; doing very well but nonetheless drifting along on an ocean of Australian sherry, supporting an ever-extending family group. There was a company restructure in the ‘80s, with the family holdings consolidated and several fringe members bought out. Today, there are fourth

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The Australian & New Zealand Grapegrower & Winemaker 19

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generation members on the board, with fifth and sixth generations working in the family firm. Near the end of the ‘80s, a major expansion was started with the purchase of the Barwang brand. In hindsight, it was an astute investment in the future of Australian cool-climate viticulture. In the 1990s, an investment in the Brands Coonawarra winery was acquired with the remainder purchased in 1994. McWilliam’s also has extensive vineyard holdings in the region, more than can be used for Brands’ wines. The surplus is used in other company brands, such as Hanwood, often lifting the quality above the retail price asked. Western Australia company Evans & Tate was added to the McWilliam’s portfolio in 2007. As with Yalumba and Lion, McWilliam’s is involved in distribution via Echelon Wine Partners, which has a selection of imported wines along with domestic brands. Robert Blackwell, McWilliam’s Wines CEO, supplied the responses to the Q&A.

Brown Brothers Wine production: 17 Wine case sales: 12

As 2010 came to an end Ross Brown, the then CEO of Brown Brothers (BB), announced the family firm had bought Tamar Ridge and associated wine assets from Tasmanian timber company Gunns for $32.5m. A statement by the company at the time said it was a large investment in a time that the wine industry was in some flux and one that increased vineyard holdings to 1058ha, plus boosting sales to $106m. Brown Brothers now owns Tasmanian Estates (Tamar Ridge, Devil’s Corner and Pirie) but these are kept separate to the overall BB brand. In February 2011, Brown announced he was stepping down as CEO – a role he had held for a decade. He remains the public face of BB, travelling extensively presenting numerous tastings, dinners and Roland Wahlquist

lectures. Roland Wahlquist is the new CEO, having been with the company more than 20 years and held the position of general manager prior to the promotion. Wahlquist supplied the responses for this review. The BB brand is among the strongest in Australia. Can Wahlquist and the Brown family position Tamar Ridge in the same league over the next few years? What it will demonstrate is if people create the brand or the brand creates itself and people just guide it.

Warburn Estate Wine production: 8 Wine case sales: 7

It started in 1971 as Sergi Estate Wines, became Riverina Wines and today it’s known as Warburn Estate. It is, however, still Sergi family-owned and now boasts 1000ha of vineyard and a winery capable of crushing 40,000 tonnes. In recent years, the company has cut its production to match sales. The Warburn Estate range of labels include Warburn Premium Reserve, Aspen Estate, Stephendale, Gossips, Brass Razu and Rumours brands. It also produces many others as buyer’s own brands (BoBs). Warburn Estate is a private company and supplied only limited information for this review. It confirmed it exported to more than 20 countries, but much of that is as BoBs. Although a large number of its vineyards are based in the Riverina, it does not limit itself to that one region. The Stephendale brand’s Shiraz, Semillon-Sauvignon and Cabernet Sauvignon wines are sourced from the Barossa Valley, and the Sauvignon Blanc from New Zealand. The Brass Razu is also a NZ Sauvignon Blanc. Showing its flexibility with BoBs and private labels, they have entered into an agreement with ‘70s rock band AC/DC to release AC/DC The Wine. Sold via Dan Murphy’s, fans can enjoy Back in Black Shiraz, Highway to Hell Cabernet Sauvignon and You Shook Me All Night Long Moscato.

Yalumba Wine Company Wine production: 12 Wine case sales: 10

Yalumba is a complex company that employs a workforce of about 780 staff worldwide. Yalumba is Barossa Valleybased and its origins date back to 1849. It owns/leases about 750ha of vineyard across several wine regions, though predominantly in South Australia. It produces more than 60 wines in brands as diverse as The Octavius, down 20 The Australian & New Zealand Grapegrower & Winemaker

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Robert Hill Smith

through various ranks to the Yalumba Y series. Put another way, the price-points range from $12 to more than $100 a bottle. There are several brands and many wines under the Hill Smith Family Vineyards umbrella, which include Heggies, Pewsey Vale, Jansz and Dalrymple in Tasmania, Smith & Hooper out of Wrattonbully, Ringbolt in Margaret River, Hill-Smith Estate, Redbank Victoria, Nautilus Estate (Marlborough) and Oxford Landing Estates. Not in the two above groups but still part of the company are the brands Running with Bulls, Mesh, Rogers and Rufus, Dunes and Greene, Angas Brut and Mawson’s of Wrattonbully. There is Opawa and Twin Islands from New Zealand, as well. Also included in the mix is Samuel Smith & Son, who distributes about 50 brands domestically, Negociants Australia with a huge portfolio of imported wines and Negociants International handling various wines in the US, UK and New Zealand. The empire is bigger than many think and, if all taken together, must generate several hundred million dollars of turnover. However, focussing on the Yalumba Wine Company wine production, a conservative estimate of sales turnover is between $70-85m. Brian Walsh, Yalumba’s director strategy and business development, supplied the responses for this review. However, Robert Hill Smith is the public face and fifth-generation proprietor of the company.

Tahbilk Wine production*: 22 Wine case sales*: 17

The Tahbilk Group consists of several parts, some well-known such as a holding in McPherson Wines and the Four Sisters brand, others less-known but all connected to wine. Chief executive Alister Purbrick is a driving force behind the family firm, and supplied the responses for the review. His views are forthright and his April 2012 – Issue 579

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concern for the whole wine industry is admirable. About 70% of sales are domestic. Purbrick thinks Australia currently has the most competitive domestic marketplace he has ever experienced. The company owns/leases about 518ha of vineyard, with its winery base in the Nagambie Lakes region of central Victoria. It encompasses 11 individual wine brands and employs a staff of 224 full-time people. Tahbilk is a revered brand within Australia, but it is yet to gain the status it really deserves globally. Tahbilk’s major export markets are UK, Sweden, China, the US and Canada. Purbrick believes the UK will remain Australia’s number one market but, “sales by volume (largely) and value (a little) will continue to decrease.” Unlike some producers, Purbrick is pragmatic about private label brands and confirmed Tahbilk works with chains both in Australia and the UK. Purbrick also stated the company bottled 100% of its wine in Australia and “will not be bottling any wine overseas”.

Angove Family Winemakers Wine production: 16 Wine case sales: 13

It’s a very busy year for Angove, which celebrates its 125th anniversary and a centenary of making wine at Renmark in 2012. It also opened a new cellar door in McLaren Vale and released its first wine, from its new home-base, called “The Medhyk” McLaren Vale Shiraz. This $50 old-vine Shiraz crowns a portfolio of wines that has been adding a number of new region-focussed styles in the past few years.

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As with Brown Brothers, it has undertaken some bold moves for a conservative company in a time of unease in the Australian wine industry. Head of the family firm is fourth generation John Angove as managing director, with fifth generation Richard and Victoria also involved in the business. John Angove supplied the responses for this review. Turnover was on par with the previous year. The company produces 10 brands all under the Angove umbrella and owns 500ha of vineyard. In addition to reorganising its portfolio, Angove have also bucked the trend and increased exports to the US and the UK, up 180% and 70%, respectively.

Grant Burge Wine production: Not ranked Wine case sales: 18

Grant Burge the person is, in many ways, Grant Burge the company. Not wishing to disrespect his wife Helen or three children involved in the company and wine industry, it’s hard to think of the company without thinking of the man. Having a Q&A with Burge, who supplied the responses for this review, is a rapid fire exchange; answers are short and to the point. Q: Rosé wines have done well but seem to be levelling out. What is your view? Burge: “No interest.” (One is made within the Benchmark range). Burge wines are 70/30 split domestic/export and apart from the UK, which is flat, the other top export destinations for Burge wines are all showing increases with China soaring. The company’s vineyard holdings, both owned and leased, total about 450ha. Its main base is in the Barossa, and its portfolio consists of 11 brands, with more than 50 wine offerings. Burge will work with retailers on a buyer’s own brand but only if the volume is large enough.

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Grant Burge 22 The Australian & New Zealand Grapegrower & Winemaker

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April 2012 – Issue 579

Lion No ranking information available.

Lion, formerly known as Lion Nathan, is a New Zealand and Australianbased dairy/cheese/beer/wine company and part of the Japanese conglomerate, Kirin. The Australian-based Lion group includes five top Australian wine brands. Head of the prestige pack is Adelaide Hillsbased Petaluma, with Stonier’s, in the Mornington Peninsula, a close contender for the top spot. St Hallett (Barossa), Knappstein (Clare) and Tatachilla (McLaren Vale) are not short of prestige but are a step or two behind the leaders. The following financial information on Lion is contained in its annual report (to the end September 2011). Its Australian beer, spirits and wine division revenue was $1548.1m. An estimate of wine revenue from the above mentioned Australian wineries is about $50-60m. Lion appears twice in this review as it has extensive New Zealand holdings, which it increased towards the end of 2010 when it acquired brands such as Lindauer, Corbans, and Saints from

April 2012 – Issue 579

Pernod Ricard. The company is also involved in wholesaling its wine in Australia and New Zealand via Fine Wine Partners. In the UK and Europe it has a partnership with Bibenum Wines and in the US its Distinguished Vineyards and Wine Partners (North America). In Japan, the base of parent company Kirin, the Mercian company handles part of the Lion wine portfolio. Mercian is also 100 per cent Kirin-owned. As yet, it doesn’t appear that Mercian has picked up many Australian wines, with a much larger focus on imported wine brands such as Gonzalez Byass, Concha y Toro, Robert Mondavi, Franzia and Champagne Pommery. Australia does, however, squeeze itself in there in a small way, with recent news that Mercian has teamed with St Hallett to jointly develop an Australian wine designed to suit Japanese customers.

Taylors Wines No rankings available

Taylors Wines originated out of the Taylor family Sydney pub empire and liquor wholesalers. For many years, the family had bought wine from the Clare

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Mitchell Taylor

Valley for the Sydney operations before buying land in the region and setting up as vignerons in 1969. The first release under Taylors Wines was a Cabernet Sauvignon in 1975. Today, Taylors Wines is still in family hands but much has changed in philosophy and practice since 1969. It was established with the intention of producing an Australian Cabernet Sauvignon, which would hopefully match the world’s finest examples. It has gradually evolved under new plantings and some grafting to include more white varieties. For some time, however, Taylors seemed to lag behind other wine companies in style of wine and style of label.

The Australian & New Zealand Grapegrower & Winemaker 23

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australian wine companies

Its current CEO, Mitchell Taylor, who supplied the responses to this review, has generated and overseen a new label, different styles and the company’s expansion into using fruit from new regions. The Taylors like to keep business details within the family but an estimate of its wine production is 550,000 cases, all under the company’s own brands. It does not produce any private or buyers’ own brands. It is also estimated that it owns/leases about 500ha of vineyard in several wine regions°.

Peter Lehmann Wines Wine production: 20 Wine case sales: 16

As with fellow Barossa-based producer Grant Burge, when the Peter Lehmann company name comes to mind so, too, does the man Peter Lehmann. However, after a vicious takeover attempt in 2003, the Lehmann family stake was diluted and now stands at around 11%. Peter is over 80 years of age and son Doug has retired although he remains on the board. Peter Lehmann Wines (PLW) is now part of the Swiss-based Hess Group AG, which paid about $160 million for the majority stake (85%) it now holds. PLW can be used as a barometer for a great deal of the Australian wine industry. Its sales in 2011 are about the same as those in 2002. The Hess Group has good distribution in the US but it hasn’t appeared to have created the market for Lehmann wines that was expected at the time of the takeover. Paul Turale is the global marketing manager for PLW and he supplied the responses for this review. Turale reports the domestic market accounts for 30% of sales. The company shares with Grant Burge a commitment to bottle domestically and not ship in bulk. Although now part of an international organisation, PLW remains loyal to the Barossa Valley.

Export is the strength of Garacama, with only 5% of sales on the domestic market. The UK is its top export destination, with the US, Europe and China following. Director Andrew Peace, pictured above, who is also chief winemaker, supplied the responses to this review. According to AC Nielsen (September 2011) the Andrew Peace brand is the eighth biggest Australian brand in the UK off-trade. In May 2011, a drinks report by Nielsen also placed the brand at 27 in the top 50 selling wine brands (off-trade) in the UK. The report showed a 24% increase over the previous year.

The Warren Randall Group No ranking available

As a first time entrant to this review, the best way to describe this group of companies, which has Warren Randall at its centre, is complex. Keeping it simple, the group comprises of four sections in four regions: • Seppeltsfield (Barossa) • Tinlins (McLaren Vale) • Fleurieu Vintners (Langhorne Creek) • Kilikanoon Wines (Clare Valley). The company structure, however, is more complex and involves a cats-cradle of 16 entries. In total, the groups are comprised of more than 2266ha of vineyard, a 16,000 tonne grape crush and global sales of around 117,000 cases. Exports are equally complex, Hong Kong being the main market for Seppeltsfield and Canada for Kilikanoon wines. Tinlins wines are to be found only in the US. Apart from Tinlins, China appears in the top five destinations for the other wineries. Returning from a recent visit to China, Randall, who supplied the responses for this review, hinted exports there could increase dramatically.

Garacama Pty Ltd (Andrew Peace Wines) Wine production: 14 Wine case sales: 11

Andrew Peace family-owned vineyards total 350ha, with a base at Piangil, Swan Hill, on the Victorian side of the Murray River. Peace is also a large purchaser within and outside the region, releasing wines from the Clare Valley, Langhorne Creek, Coonawarra and other regions across Australia. 24 The Australian & New Zealand Grapegrower & Winemaker

Warren Randall www.winebiz.com.au

Tyrrell’s Wines Wine production: Not ranked Wine case sales: Not ranked

Tyrrell’s Wines CEO Bruce Tyrrell, who supplied the responses to this review, is a passionate and vocal supporter of the Australian wine industry. Bruce is a fourth generation Tyrrell in the company, which began in 1858, with fifth generations Chris, Jane and John also involved. Its winery operations, with a current full-time staff of 90, are based mostly in the lower Hunter Valley, but its vineyard holdings extend beyond the region, with 87ha in the upper Hunter, 26ha in Heathcote, and 15ha in the Limestone Coast. They recently sold a 34ha vineyard in McLaren Vale, but intend to continue making a McLaren Vale wine. The locations help provide Tyrrell’s a degree of security to climatic regional vintage variation – as is often the case in the Hunter. In terms of brands, Tyrrell’s has 12 individual sub-brands within its portfolio, including its Winemaker’s Selection, Sacred Sites, Single Vineyards and Rufus Stone. It also produces a number of wines exclusively for its Private Bin Club, which is a membership club, plus own label wines for various charities and direct retailers.

Zilzie Wines Wine production: 13 Wine case sales: Not ranked

Andrew and Steven Forbes now run the Zilzie vineyards and winery but still give deference to their parents and the three generations before them. Zilzie has more than 700 hectares of vineyard that is run as a separate company to the winery, based near Red Cliffs on the Murray River, just south of Mildura in north-east Victoria, where the grapes are crushed and brands produced (one sells to the other). The family involvement is similar to the Peace family, who are located up-river from Zilzie. The Forbes family have been involved in farming in the region for almost 100 years and have owned vineyards since the 1980s. The backbone of the business is the supply of wine in bulk for other companies. The three-tier Zilzie brands, along with exclusive and buyer’s own brand supplies, account for just under 10% of the business. Like other wine exporters, Zilzie has increased its sales to China but, unlike April 2012 – Issue 579

Andrew Forbes

Wingara Wine Group

though it is not yet at full capacity. It has, however, shown a steady increase since its establishment.

Wine production*: 18 Wine case sales*: Not ranked

The Wingara Wine Group is a small part of the Spanish Freixenet Group, which is ranked among the top 10 global wine producers. The Australian business is comprised of two parts; its top-end wines from Coonawarra, which include Faldo, Riddoch and Katnook Estate brands and value everyday drinking wines, which include Deakin Estate, from Mildura, in Victoria. About 50% of Wingara’s case sales are from exports, with the UK leading the way. It has an estimated 327ha of owned/leased vineyards in Australia. Wingara Wines director of sales and marketing Sean Shortt provided the responses for the review.

most exporters, it has also managed to increase its sales in the UK. Berton Vineyards Wine production: 19 The Zilzie brand was born in the 21st Wine sales: 15 century. Forward thinking came with the Bulloak range, which was released in Bob and Cherie Berton established 2008 as a 100% carbon neutral selection Berton Vineyards in 1996 with 30.4ha of of wines. It also has a regional collection land in the Eden Valley and planted 12ha with representation from the Adelaide to vines. It was hardly a lifestyle change, Hills, Barossa and Yarra valleys along as Bob had previously worked with De with others. Bortoli (eight years), Miranda (five years) Zilzie Wines managing director and Rossetto (now Beelgara) for four years. Andrew Forbes supplied the responses Based1at Yenda, in the Riverina, the march tank185x 130 19/3/12 5:18 PM Page for this review. winery has a crush capacity of 20,000t

Beelgara Wine production: Not ranked Wine case sales**: 19

Beelgara Wines evolved out of Rossetto Wines, which was established in 1930. The name Beelgara came into play post-2001, when the Toohey family became involved, who now control 80% of the company. A Riverina growerscooperative own the remaining 20% and supply the majority of grapes. Grapes are purchased, however, for Beelgara’s recent expanded regional wine range, including representation from the Clare and Yarra valleys. Beelgara does produce wine for private label but is reducing this side of the business to concentrate on building its own brands. *R ankings sourced from 2012 Australian and New Zealand Wine Industry Directory. Sales of branded wine based on branded case domestic and export sales (as at July 2011). Total wine production based on total number of litres of wine produced, including branded, bulk and buyer’s own brand wine. ** Rankings sourced from estimates published in 2012 Australian and New Zealand Wine Industry Directory. Estimates based on news reports, annual reports, information provided to other Winetitles publications. Data not provided by company named. ° Vineyard figures sourced from 2012 Australian and New Zealand Wine Industry Directory.

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The Australian & New Zealand Grapegrower & Winemaker 25

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Table 29. Australia’s largest wine companies by total wine production1

Table 30. Australia’s largest wine producers by sales of branded wine1 Rank

2011

2010

2009

Wine Company

Accolade Wines2

’11

’10

’09

’08

’07

’06

Treasury Wine Estates

Accolade Wines

Casella Wines

Treasury Wine Estates

Premium Wine Brands2

Casella Wines

Premium Wine Brands

Australian Vintage De Bortoli Wines

’05

’04

Wine company

Australian Vintage

Kingston Estate Wines

De Bortoli Wines

Warburn Estate

McWilliam’s Wines

Warburn Estate

McWilliam’s Wines

Qualia Wine Services

Littore Family Wines

The Yalumba Wine Company

Andrew Peace Wines

Zilzie Wines

Brown Brothers

Andrew Peace Wines

Angove Family Winemakers

Thatchi Wines

142

Kingston Estate Wines

Angove Family Winemakers

Berton Vineyards

Brown Brothers Milawa

Peter Lehmann Wines

Wingara Wine Group

Tahbilk Group

Berton Vineyards

Grant Burge Wines

Peter Lehmann Wines

192

Beelgara Estate

Selena Estate

Nugan Estate

Tahbilk Group

Ranked as per Australian total number of litres of wine produced including branded, bulk and buyers own wine. 2 Estimate using resources such as news reports, annual reports, information provided to other Winetitles' publications. Data not provided by the company named. Source: Compiled by Winetitles based on information provided by wine companies, unless marked with 2. 1

1 As per branded case domestic and export sales (and in line with brand acquisitions, mergers or joint ventures as at July 2011). nr = not ranked in previous years. 2 Estimate using resources such as news reports, annual reports, information provided to other Winetitles’ publications. Data not provided by the company named. Source: Compiled by Winetitles based on information provided by wine companies, unless marked with 2.

Re-pubilshed with permission from 2012 Australia & New Zealand Wine Industry Directory

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April 2012 – Issue 579 21/6/10 3:49:28 PM

Q&A

EIGHTEEN QUESTIONS WERE put to the companies with one free expression space. Enough, we felt, to cover various aspects of the industry without overburdening or taking up too much time. Vintage 2012 seemed to be shaping up to be an ideal balm on the rough memories of 2011. By mid-March, most of the warm regions in South Australia, New South Wales, Victoria and Western Australia had completed harvest of the white varieties and were nearing the end of the mainstream red varieties. Vintage updates, published in the February and March issues of Grapegrower & Winemaker, presented a common theme across the nation – low yields, high quality and a growing optimism. However, a very wet vintage in the Hunter and March floods across NSW, especially in the Riverina, caused heartache for some, with the red winegrape harvest significantly affected. Grape prices for some of the premium varieties in some regions were rising, however, Murray Valley and Riverina grower associations voiced continued concern that prices remained below the cost of production for many of their growers. Last year’s national crush, according to Australian Bureau of Statistics (ABS), Annual Wine and Grape Industry 2010-11 was 1.602 million tonnes. Early estimates on this year’s vintage suggest a similar figure. The first question looks at the ideal vintage.

he ideal Australian national vintage figure, T as projected by the leading companies last year, was put at 1.5 million tonnes (on average). Others called for 1.25 million tonnes and some suggested 1.75 million tonnes. Have your views changed this year?

Though it appears a simple question, not-so-simple answers arose. Perhaps producers didn’t want to appear mercenary or manipulative. Others came at the question from a different perspective, such as Neil McGuigan (Australian Vintage, pictured right): “The exchange rate will be the driver of what will be deemed the appropriate number of tonnes for this vintage.” Such an assumption appears to be if the dollar drops Australian wine could automatically and immediately regain all lost market share in those two markets. It’s an optimistic view, though one that’s difficult to imagine happening. Bob Berton (Berton Wines), sneaking in at company number 22, tipped his hat for a 1.7 million tonne vintage. “This is a difficult one, because I need to balance the good of the industry against the very pressing needs of continuing to sell against a ferocious exchange rate. If we have a surplus, then prices are depressed; if we are in balance, then fruit prices will rise and, in the current environment, it would be a brave producer that would opt for this option as a preference,” Berton said. Brett McKinnon (Orlando Wines) also provided the following response. “Orlando is forecasting that its own intake for the 2012 vintage will be slightly up in terms of volume from 2011 and down from 2010. In terms of industry, we

Neil McGuigan

would like to see a smaller vintage than 2011, and all the indications so far are saying that this is the case.” Many growers who have suffered from lower grape prices over the past few years have moved to establish their own brand. These brands are seeking space in an overcrowded market (mainly domestic). They may not make it to a retailer shelf but they do attract an estimated 25% of wine customers who do bother to look for the new and interesting wine choices. How problematic (as a group) do you think these brands are?

Answers ranged from “good on them, go for it” through to “they are destabilising the domestic market”. Peter Toohey

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The Australian & New Zealand Grapegrower & Winemaker 27

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(Beelgara Wines) said he suspected such brands were borne out of a need for some growers, who were keen to pick up the WET rebate. “This is putting significant pressure on an already fragile market, and is contributing to the glut and the resulting decrease in price per litre,” Toohey said.

several Moscato wines across our brands and we’re satisfied with the performance of these wines.”

Roland Wahlquist (Brown Brothers) said: “Anyone who doesn’t have a guaranteed route to market is prolonging the inevitable. A lot of these brands just can’t survive. They are just crowding and confusing the market.”

Warren Randall did point out, however, the increase of young Moscato was creating a shortage of young fortified Muscat and, in time, could see the heritage of old fortified Muscat die out.

Brian Walsh (Yalumba) said: “All competition is tough. If genuine businesses develop from this initial misfortune – good luck to them. But as many know, once you start building up inventory, and possibly adding staff, even investing capital, then it’s not the easiest way to make a dollar. I would suspect that a majority of this sector would be happier growing grapes for a fair return. In the meantime, it’s just another challenge we must address, but growers have the right to do what they need to do.”

To the emphatic, Wahlquist: “We remain confident about Moscato into the future, and launched two new sparkling Moscato wines last year. These wines have received a great response.”

Rosé wines have done well but seem to be levelling out. What is your view?

If genuine businesses develop from this initial misfortune – good luck to them. Brian Walsh (above) Yalumba

Varieties The 2012 Australian and New Zealand Wine Industry Directory (WID) reveals some interesting data in regards to alternative varieties. According to its annual survey of wine producers, there were 139 winegrape varieties used for straight or blended wine production in 2011. Varieties making their first entry to the list included Aranel, Aucerot, Brachetto, Burger, Caverdella, Flora and Gruner Veltliner. One of the fastest growing alternative varieties in Australia is Vermentino, with 56 producers using this variety compared with 19 in 2009. Australian wine producers also showed a growing interest in Fiano (+15% new producers ), Tempranillo (+6%), Nebbiolo (+5%), Durif (+5%), and Marsanne (+4%). What is your view on increased interest for alternative varieties this year (is it all media, sommelier or genuine consumer)?

Overall, one picked up a snort of derision; new varieties are interesting to grow, make and drink but the fuss surrounding them is out of proportion to sales. Grant Burge (Grant Burge Wines) cut to the chase and represented many opinions, suggesting “at this stage, it’s media and sommelier interest”. Walsh observed: “One never knows what comes out of what is essentially R&D, both production and market-based. We are having a good go with Vermentino,

without any unrealistic expectations. It has, however, given some hope to an otherwise depressed grower group. Sean Shortt (Wingara Wines) was in London for the annual Australia Day tasting and gave his opinion from the export angle. “[Alternative varieties] seems more of a domestic trend than export. In export, Shiraz and Chardonnay continue to be the styles identified as ‘Australia’s own’. The atmosphere in London was positive, almost like a re-correction of the Aussie bashing of the past three to four years. Perhaps the English media are re-visiting Australia and recognising the diversity and the innovation once more. There is interest in Tasmania, Mornington Peninsula, Riesling and Semillon-Sauvignon Blanc – all the wine styles that are getting press domestically but are still really niche or on-premise in our key export markets. We still have a long way to go in educating them about Coonawarra Cabernet and Barossa Shiraz.” There has been an influx of Moscato brands this past year. If you have one, how is it performing?

‘Extremely well’ is the overriding response. From the restrained Sue Rana (Treasury Wine Estates): “TWE has

28 The Australian & New Zealand Grapegrower & Winemaker

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This divided the respondents – some had little interest in making the style or, if they did, they found it was not selling well. Others have great enthusiasm for rosé, and leading the pro-camp was Leanne De Bortoli. “We are doing well with rosé but we have been very heavily involved with marketing and selling it over the past two years. Styles of rosé are changing as well and there appears to be more of the drier, savoury styles coming out onto the market. There is a place for both sweeter and for the drier. Each should tell its own story, because each has a place,” De Bortoli said. Neil McGuigan divided the question between domestic and export markets. “Domestically, it is a challenge as the category hasn’t really taken off, to date, but there has been more success in the UK. However, we must review our styles to ensure we remain relevant to changing trends within the rosé category,” McGuigan said. John Casella (Casella Wines) also seemed to have a strong interest in this market. “We already know that rosé acts as a key point of entry for consumers into wine and that the consumer-perceived benefits of rosé are that it is fruitier, has a more refreshing taste and is less challenging than red wine. So, given the opportunities here, we would expect to see more companies introduce variations on traditional rosé and an increased presence on wine lists and supermarket shelves,” Casella said. Walsh said: “There is a fairly low price barrier above which people won’t generally stray for fun wines – and rosé tends to sit in this category.” Lower alcohol brands have increased since last year. If you have one, how is it going? If not, are you planning to introduce one?

Many responded by pointing out their April 2012 – Issue 579

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Moscato brand was low in alcohol, however, Australian Vintage have made an enthusiastic effort in this direction outside of Moscato. “We have a dedicated lower alcohol brand, Summer Hues, consisting of Sauvignon Blanc, Shiraz and Sparkling Brut – full-flavoured lighter alcohol wines with up to 31% less calories and reduced GI (glycemic index) when compared with standard wines. It is too early to make comment on their performance,” McGuigan said.

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Paul Turale (Peter Lehmann Wines) said: “We don’t chase the low alcohol trend, but the inherent style of PLW white wines, in particular, is lower (10-11% v/v) and it is something we try to reinforce where possible.” McWilliam’s, Treasury and Pernod are also among the companies that are exploring the low alcohol wine markets. Andrew Peace

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Export According to Wine Australia’s December 2011 Wine Export Approval Report (WEAR) Australian wine exports declined by 10% to 703 million litres valued at $1.89 billion in 2011. In a welcomed (however small) contrast, the average value increased by 1% to A$2.69 per litre, driven mostly by increased prices for bulk and bottled wine exports. It also shows the not surprising decline in export volume, from 1.42 billion litres in 2005 to 1.07 billion litres in 2011. Australia’s top five export markets by volume are, in order, the UK, US, Canada, Germany and China – and account for 80% of Australia’s total export volume. In the February 2012 Wine Australia Export Market Snapshot, published on page 92, bulk wine export officially overtook bottled wine. In February 2012, bottled wine exports fell by almost 4% to just 49% of the total export market, while bulk wine increased by the same margin to 50%. The review sought to avoid asking the simple all-encompassing question: how are exports going? Instead, three markets were chosen, with India proving frustrating because it promises much but for various reasons is failing to deliver. The UK, which has delivered but is in decline, and the admittedly wide and varying, but seemingly enthusiastic, Asia market, particularly the south-east zone. From your own company’s perspective, what is your view on: • The Indian market over the next three years? • The UK market over the next three years? • The Asian market over the next three years?

In response to India, Andrew Peace (Garacama) provided the mysterious comment: “Watch this space”. April 2012 – Issue 579

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Anita Poddar, from Accolade Wines, spoke for many when she said: “The Indian market will be affected by domestic taxation policy.” On the positive side she added, “The large number of Indians who have travelled to Australia for education and consumed wine here as students could help provide a base.” McKinnon said: “Australia has strong economic and cultural ties with India, so Pernod Ricard considered it as a potentially large emerging market for its brands and products.” The parent company of Pernod Ricard also has a winery and brand in India, called Nine Hills. When it came to the export questions, Casella provided detailed answers, reflecting some extensive research in the overseas markets. “Yellow Tail is available in India. Sales are fairly modest with some reasonable growth levels but, overall, imported wine in India presents some incredible challenges,” he said. “The tax structure for imported wine is very complicated including one of the highest tax rates globally. A bottle of Yellow Tail in a Mumbai supermarket is over $23. “There is strong competition from locally-made Indian wines, which are improving in quality and are significantly cheaper than imported wine. “There are high levels of alcohol

The DeBortoli family, Darren, Kevin, Emeri, Leanne and Victor.

consumption but, in general, it is for purposes of inebriation and for this, locally-produced, cheap Indian whiskey and beer are available. A bottle of whiskey can be purchased for under $3. “There is not a strong food and wine culture – Indians have not traditionally eaten and consumed alcohol at the same time, and Indian food is quite challenging to match with wine successfully.” Aside from these challenges, Casella said there was a large emerging middle class, who were beginning to show an interest in Western products and traditions, including wine.

“These people are the perfect target for Yellow Tail in the future as they can afford the high cost of imported wine,” he said. “With all this being said, the reality still remains that until the tax on wine is reduced, it will be very difficult to make large inroads into the Indian market.”

The UK market The growth of the Australian wine industry between late 1980s and 2007 was built on exports. As, indeed, was the growth spurt from 1930 to 1940, although that included subsidies. The UK was the leading export destination for both

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The challenges that have faced the UK market over the past three years are all likely to be there for the next three years. Anita Poddar Accolade

periods. The question of how to trade profitably in the UK is baffling everyone at the moment. As difficult as the market is, none of those questioned mentioned pulling out. Victor De Bortoli said the UK market was still an important market and, while trading conditions were tough, there were still opportunities for the company. For Brown Brothers the market is opening out because some Australian brands have withdrawn. Burge wines are seeing growth “but no margin”. Several companies, like Yalumba and Orlando, are pushing prices up but sacrificing volume. The most pragmatic reply came from

Poddar, (Accolade). “The challenges that have faced the UK market over the past three years are all likely to be there for the next three years. Increasing taxes and the level of the dollar are going to be exacerbated by a tough local economy,” Poddar said.

The Asian market As the UK continues to prove difficult, exporters are looking at new avenues for their product. A great deal of interest is being shown in the BRICs countries (Brazil, Russia, India and China). Peter Bailey, from Wine Australia, looks at South-East Asia in depth on page 89 and shows why many wineries are finding relief in this region. A few companies already export to Russia but it’s proving difficult. While Brazil holds promise, it’s less researched at the time of writing but clearly coming onto some export managers’ radars. John Angove (Angove Wines) takes a measured view towards Asia. “China will continue to grow and show reasonable prices, but everyone is chasing it as the solution to all problems, which it is not. Other Asian markets will continue without significant growth or decline,” Angove said. Robert Blackwell, from McWilliam’s, takes Angove’s comments a step further. “It is important to distinguish that the Asian market is made up of many very different, individual countries that have specific market needs and different opportunities and challenges,” Blackwell said. “China is certainly a region to invest and grow, while Hong Kong, Japan and Singapore may have some challenges

There is still a spot for the specialist wine, spirit and beer retailer that can customise his or her trade, but the competition from the majors is very strong and their desire for control is never ending John Angove (above) Angove Wines

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australian wine companies

but present good opportunities too. The key to working with these markets is pushing aside the Western mentality and tailoring your approach to specific market insights, needs and consumers.” Alister Purbrick splits the China market into quality requirements. “Entry level south-east Australian and flagship wine sales to China will grow quickly. The middle premium, regional wine market will develop more slowly,” Purbrick said. Consolidation of retail in Australia and the UK, along with consolidation of distribution in America, has constricted routes within the three largest markets and presents a barrier to selling wine. What is your view?

The strong Australian dollar was acknowledged by all the top 20 respondents as having a key role to play in contracted export markets. On the dollar’s effects, Blackwell (McWilliams) said: “It means you need to think differently and provide better, smarter, stronger brands, along with insights and differentiation to be relevant.”

Angove astutely pointed out consolidation had “no doubt” created barriers to traditional trade routes, but there were other routes that needed to be pursued. “Direct marketing holds a strong opportunity for wine sales in Australia. There is still a spot for the specialist wine, spirit and beer retailer that can customise his or her trade, but the competition from the majors is very strong and their desire for control is never ending,” Angove said.

“Interestingly enough, I have seen an evolution of the UK supermarkets that see getting the balance is also right for their own credibility. A BoB will always be important to them at the lowest retail price-points and this is normally covered by bulk wine. For them, having the right mix of BoB, private or exclusive winery labels (or umbrella brands that include the winery name) and winery brands is becoming more important for their competitiveness and credibility.”

Adding to the above difficulties are private label brands. Do you already or will you work with retailers to develop private labels?

Exporting wine for overseas bottling has grown substantially in recent years. Do you do this, and will it help improve profit margins? If so, do you plan to increase the amount of wine you export in this fashion over the coming year?

Most do, including Zilzie, Australian Vintage, Tahbilk and Warburn Estate, some have but only if it meets a certain size criteria such as Burge, and a few were adamant that they had no intention of producing for private label, such as Rana, from Treasury, who said: “We do not develop private labels. We believe that the strength of our brands is the primary element in helping us to develop new products, markets, customer relationship agreements and promotional activities to provide long-term success and value to our business.” Mitchell Taylor, from Taylors Wine, agreed. “It is not our strategy [to produce private labels] as we believe in the heritage and story of Australian wine,” Taylor said. Paul Turale, from Peter Lehmanns, presented two sides of the issue. “We supply some private label, which has been a long-standing relationship. The difficulties are often offset by an enhanced supplier relationship and increased winery throughput, which also assists cost absorption and provides a benefit to the branded offer,” Turale said.

It means you need to think differently and provide better, smarter, stronger brands, along with insights and differentiation to be relevant.

Robert Blackwell (above) McWilliam’s

Victor De Bortoli offered a broader view and an explanation as to the company’s perceived difference between private labels and buyer’s own brands (BoBs). “Yes we do and we will work with retailers in the future where it presents an opportunity for us. We are careful how we approach and try to balance this with our own brands as it is not our goal to become private label suppliers,” De Bortoli said. “Private labels that include the house name, such as ‘De Bortoli’, I view are better than true BoBs that have the aim to hit low price-points. A BoB can have the value stripped right out of it due to the bidding war that a retailer can create. With the value taken out there is pressure to compromise quality to make the thing sustainable.

32 The Australian & New Zealand Grapegrower & Winemaker

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It was another mix of an emphatic ‘no’ to enthusiastic ‘yes’. Taylor answered: “No, we do not believe in exporting jobs for the sake of the dollar.” For Brown Brothers, Walqhuist said it was an essential step in remaining competitive in European markets, in particular, the UK. De Bortoli took the view if they moved too much bottling offshore, it could force an increase in the overall production costs in Australia, due to less throughput.

Domestic market With export conditions proving increasingly tough, wine companies have understandably increased their attention to domestic sales. According to the ABS 2010-11 Industry Report, domestic sales of Australian wine (released after this Q&A was sent out to the companies) accounted for 463.9 million litres, with a total value of $2.33 billion. However, it’s proving a harder arena than it once was. In the 12 months ended January 2012, Wine Australia reported that imports grew by 12% to 77 million litres. The domestic market accounted for 458 million litres in the 12 months to the end of March 2011. This was 10 million litres down on the previous year – the blame is put on increased imports, most of which are New Zealand Sauvignon Blanc (67%). Do you think more domestic sales will be lost to imports this coming year or can the Australian industry slow down or even reduce the import volume?

It’s obvious the strong Australian dollar plays the major role in increasing wine imports, however, many in the industry believe there is also an expanding taste and curiosity about wine, in general. New Zealand Sauvignon Blanc has taken centre stage as wine of choice for many. However, New Zealand is not the only April 2012 – Issue 579

Industry governance

country doing well out of the Australian market. Australia imported more than 4.8 million bottles of champagne in 2011 – an increase of 31.9%. Purbrick believes the current domestic marketplace is the most competitive Tahbilk has experienced. Such competition is unlikely to change in the near future, according to Turale, (Lehmanns), who said imports would continue to grow (but hopes the percentage increase will slow). “Therefore, it’s incumbent on local producers to adapt and provide wines that the market (consumers) are seeking, rather than what the winery or winemaker may prefer to produce,” Turale said. Andrew Forbes, from Zilzie Wines, agrees and believes increased imports are partly responsible for introducing consumers to alternative varieties. “Also responsible are the media, sommeliers and buyers looking for something new and interesting to discuss. So, it’s now the responsibility of the wineries to educate and market to the mainstream consumer if we want to turn passing trends into something that is fashionable,” Forbes said.

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The statistics of the responses to this question were almost as interesting as the answers themselves: • Not answered 6 • Not a signatory 13 • Yes, a signatory 3. Beelgara said it “supports the Code in principle”. The three signatories are the three largest wine companies: Treasury, Accolade and Orlando Wines. McKinnon, from (Orlando): “We are a signatory to the Code. We feel it represents ‘best practice’ and shows our ongoing commitment to fair relationships with our growers.” Several did respond that they would consider looking at the revised code. Others explained their reasons for not supporting the code. Purbrick said Tahbilk did not agree with the dispute resolution clauses under the Code.

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The Australian & New Zealand Grapegrower & Winemaker 33

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australian wine companies I agree in principle that a merger of these organisations should occur, provided it can be achieved without losing any Federal Government matching funding to industry levies collected

Turale said Peter Lehmanns was not currently a signatory, as it maintains a good relationship with its wide grower base. “We have chosen not to sign, as we do not believe that the designated timing is realistic to set pricing,” he added. Plans to push forward on the merger of Wine Australia and the GWRDC are ongoing. What do you think the potential benefits or disadvantages to such a merger might be? Note this question was asked before the announcement of a formally proposed merger.

Alister Purbrick (right) Tahbilk Group

There were many interesting answers to this question. Walsh, (Yalumba), represented many of the responses provided when he suggested there would be “financial benefits of significant magnitude”. Apart from the financial angle, several also shared a similar view to Toohey’s, (Beelgara), response that it “is critical as an industry, as we need to speak with one voice.” Angove added this: “There needs to be a clear quarantine of R&D funds, so they do not get slowly side-tracked into ‘marketing’ funding in the here and now, rather than R&D investment for future benefit.” Purbrick also showed concern about continued funding. “I agree in principle that a merger of these organisations should occur, provided it can be achieved without losing any Federal Government matching funding to industry levies collected,” Purbrick said. The questions covered a wide range of topics but respondents were invited to share any additional thoughts regarding growing, production, selling, distribution or retail of wine, finance and political aspects. Of note was the problem of the WET. It’s also a topic of interest for NZ’s ‘top five’ wine companies.

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Poddar used the opportunity to reiterate Accolade’s stand on the topic of tax. “Accolade supports the current ad valorem system of alcohol taxation, and, by default, the WET rebate system. However, we recognise that there is a need to review the application of the rebate to deal with unintended consequences of the rebate,” Poddar said. McGuigan suggested the issue of volumetric tax was the elephant in the room. “We must be united on reform and the status quo retained for the overall benefit, and long-term health, of the industry. Australian Vintage believes the right decision for the Australian wine industry is to take a position that does not alter the current status of the tax,” McGuigan said. “We also need a review on who receives the rebate for the WET – this should be a high priority for the industry to address. It should be applicable to bottled wine only and bulk wine entrepreneurs should not receive the rebate. It should be reserved for those in the industry who are committed to viticulture and winemaking.”

Taylor also wants a united industry stance. “I feel it is very important for the wine industry to be unified on the tax position going forward. We are currently one of the highest taxed wine-producing countries in the world. We need to focus on making our industry sustainable in the future with the removal of the WET tax,” Taylor said. Angove raised the issue of the antialcohol lobby and its focus on health issues related to wine. “Threats to the industry from the health lobby and the do-gooders is real and ongoing,” Angove said. “Industry needs to continue its promotion of wine as a product that, in moderation, is good for one’s health and is an attribute to the enjoyment of life.” Wahlquist suggested now was a time of opportunity. “The New Zealand Sauvignon Blanc phenomenon and, more recently, the growing interest in Champagne, demonstrates that consumers are still prepared to pay more per bottle for something that delivers value to them. Our challenge is to find out what they value and provide it,” he said.

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April 2012 – Issue 579

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new zealand wine companies

Savvy, successful but not without a few bumps in the road VINTAGE 2012 kicks into high gear in New Zealand this month, with many in the industry, including most of the following ‘top five’ predicting a possible shortage of grapes. It’s been a cool and wet summer for most wine regions across New Zealand this year, and harvest is starting a little late (see the vintage report on page 8 and 9). Low crop numbers and disease pressures have prompted New Zealand Winegrowers to predict a 10-30% decline on 2011’s harvest of 328,000 tonne. Four years ago, oversupply was on the lips of every New Zealand grower and industry analyst and warnings that the country would follow in the footsteps of its neighbours across the ditch were

voiced. Then, the world fell in love with a little grape, by the name of Sauvignon Blanc. The latest export figures show that New Zealand export sales have grown from 23 million litres in 2002 to 154m litres in 2011, and is now worth NZ$1.1 billion (compared with $246m in 2002). Eight out of every 10 bottles of New Zealand wine sold offshore is Sauvignon Blanc. There is some evidence – a drop in grape prices, reduced profitability and slowing export figures – that the ‘Savalanche’ is on the wane (read Jeni Port’s column on page 82). However, in seeking the opinions of the New Zealand’s top five wine companies on whether Sauvignon

Blanc remains the ‘holy grail’ a quick reminder on the country’s additional wine virtues is provided. Eleven questions, looking at domestic and export markets, varieties and wine styles and industry engagement and governance were put to the country’s top five wine companies. Their responses are forthright and insightful, and we thank the companies for their time and efforts. New Zealand writer Max Marriott helped compile the responses, for what is hoped will be first of many New Zealand wine company reviews.

marketing of NZ wine brands, winemaking and viticulture. Pernod Ricard NZ is responsible for 18 NZ wine brands, including some of the country’s most famous, such as Brancott Estate, Stoneleigh and Church Road. In October 2010, it sold off several major wine brands for an estimated $NZ88 million, which included Lindauer and others from Gisborne and Hawke’s Bay. Its annual turnover at year ended 30 June 2011 was NZ$258.5m, a fall from $337.2m the previous year, attributed to the disposal of brands during 2010. Fabian Partigliani was appointed managing director of Pernod Ricard NZ in February 2007, and is based in Auckland. Partigliani has extensive international experience in wine and spirits and his career has included roles in sales and marketing positions in the UK, Spain, Argentina, Germany and Italy. Partigliani, who supplied the responses in the Q&A, starting on page 37.

international Lion Group. The Lion Group (it changed its name from Lion Nathan last year) was formed in 2009 when it was bought by the food and beverage conglomerate Kirin Holdings Company Limited. The company employs about 1400 New Zealanders across several wineries including Wither Hills, independent winery Indevin and its other beer and food businesses. Lion Beer Spirits and Wine distributes more than 25 brands, and produces several of its own, including Open House, Kopiko Bay and Two Tracks. In 2010, it also bought several wine brands and wineries from Pernod Ricard, including Lindauer. The NZ part of the company is responsible for about 360 hectares of vineyard land (350ha of it self-owned), and crushes about 9500 tonnes through its Wither Hills winery. Of that 9500t, 4700t is produced via its own vineyard, while the remaining 4800t is from contract growers. A further 16,000t of Lion-owned grapes is crushed by other contract facilities. Its grape production has increased annually for the past 10 years. Its NZ sales amount to approximately 1.245 million cases, its Australian sales account for 110,000 cases and global sales

Jen Barwick Editor

Pernod Ricard New Zealand

As part of the Pernod Ricard Group within Premium Wine Brands, Pernod Ricard NZ manages NZ domestic sales and marketing, as well as worldwide

Fabian Partigliani April 2012 – Issue 579

Lion

Lion – Beer, Spirits and Wine and Wither Hills is the NZ part of the www.winebiz.com.au

The Australian & New Zealand Grapegrower & Winemaker 35

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new zealand wine companies

account for 456,000 cases. Its annual turnover in wine sales only for the two NZ companies is $NZ173 million, with the domestic market accounting for about 87% of the sales. Rory Glass is managing director of Lion NZ and first joined the company in 2001, in the role of national accounts director for off-trade. He took on several senior management roles and, in July 2011, he was promoted into the role of managing director. Glass provided the responses in the Q&A.

Delegat’s Wine Estate

Delegat’s Wine Estate is one of New Zealand’s largest family-owned and family-managed winemakers. Established in 1947, Delegat’s Group Limited is the proud producer and marketer of the internationally-acclaimed Delegat’s and Oyster Bay wines. Last year, Delegat’s crushed 25.469t, which was a 16% increase on its previous vintage. It sold 697,000 9L cases of wine in the 2010-11 financial year across New Zealand, Australia and the wider AsiaPacific markets. Globally, Delegat’s wine case sales reached almost 2 million 9L cases. Delegat’s Group Limited and Subsidiaries revenue for year ended 30 June 2011 was $235 million. Its managing director is Jakov (Jim) Delegat, who has spent his entire working career in the NZ wine industry. Delegat’s is one of only a handful of second-generation family wine producers in the country and is the alternate director of both the Wine Institute of NZ and New Zealand Winegrowers (NZW), having previously served on the board of the Wine Institute of New Zealand for more than 13 years. Delegat supplied the answers to the Q&A.

Constellation New Zealand

Villa Maria Estate

Constellation New Zealand owns several of the country’s leading wine labels and oldest wine brands. In 2003, the US-based Constellations Brands confirmed its arrival in the NZ wine market when it purchased NZ’s second largest wine company, BRL Hardy. BRL Hardy was the conglomeration of two of NZ’s oldest wine companies, owned by the Selak (1934) and Nobilo (1943) families. In 1998, the two companies merged with National Liquor Distributors and BRL Hardy, and became the Nobilo Wine Group, which was soon listed on the stock exchange. Two years later, having significantly grown its vineyard and winery assets, BRL Hardy bought the company outright. By the time Constellation NZ was formed, the company had become the second largest wine company and wine exporter in NZ. The company provides an estimated wine crush production of about 3 million 9L cases, which includes its imported brands to NZ. Constellation NZ reported an annual income of $200 million, and is responsible for producing an estimated 20% of NZ’s wine production. Constellation NZ’s head office and North Island bottling operation is still located at the heritage Nobilo site, at Huapai. It produces a number of brands, including Kim Crawford (which it bought in 2006), Nobilo, Monkey Bay, Selaks, Drylands, The People’s Wines and two domestic-only brands Fall Harvest and Station Road. Constellation NZ chief executive is Joe Stanton, who joined the company in 1994 and who held several senior management positions, until taking on his current role in 2005. He is an elected board member of two wine industry boards: NZW and the NZ Wine Institute. Stanton supplied the comments for the Q&A.

Founded in 1961 by its current owner and managing director Sir George Fistonich, Villa Maria Estate is now seen as an icon in the NZ wine industry. Fistonich did not supply financial details on the company but did provide responses in the Q&A. Villa Maria Estate is made up of two wineries; the largest is based in Auckland and opened in 2005. Its other winery, in the Marlborough, crushes Villa Maria’s Marlborough harvest from its vineyards and contract growers throughout the region. It owns and contracts vineyards in Marlborough, Hawke’s Bay and Auckland. Villa Maria Estate has four tiers of wine labelled Villa Maria Reserve, Single Vineyard, Cellar Selection and Private Bin. It also owns three other brands; Vidal, Esk Valley and Thornbury. Fistonich is a passionate supporter of all things NZ and is credited with introducing and pioneering the use of contract growers, employing qualified viticulturists, and was the first NZ wine company to initiate payment for grapes based on quality, rather than a flat contract price. He purchased the Vidal winery in Hastings in 1976 and was one of the first to establish vineyards in the Hastings region. In 1979, he opened NZ’s first vineyard bar and restaurant at the Vidal winery, setting the standard for vineyard restaurants that have since opened throughout the country. In 2009, Fistonich received his greatest honour to date – a knighthood for his services to the NZ wine industry. In 2011, he was inducted to the NZ Wine Hall of Fame for services to the NZ wine industry and received a Lifetime Achievement Award at the International Wine Challenge Awards, in London.

Table 1. Summary of New Zealand wine industry statistics, 2000-2011

Producing area (ha) Average yield (t/ha) Average grape price ($/t)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

10,197

11,648

13,787

15,800

18,112

21,002

22,616

25,355

29,310

31,964

33,428

33,600

7.8

6.1

8.6

4.8

9.1

6.9

8.2

8.1

9.7

8.9

8.0

9.8

1153

1441

1634

1929

1876

1792

2022

1981

2,161

1,629

1,293

1,172

Tonnes crushed (thousands)

80.1

118.7

76.4

165.5

142

185

205

285

266

328

Total production (ML)

60.2

53.3

119.2

102

133.2

147.6

205.2

190

235

Domestic sales of NZ wine (ML)

41.3

36.2

32.6

35.3

35.5

46.5

59.3

56.7

66.3

Consumption per capita (litres NZ wine)

10.8

9..3

8.2

8.8

11.2

12.1

12.2

11.1

13.9

15.1

Total sales of all wines in NZ (ML)

66.2

66.6

68.3

74.5

79.7

81.7

91.8

87.4

92.7

92.1

93.7

Consumption per capita (litres all wine)

17.3

17.4

18.6

19.6

19.8

20.6

21.7

20.8

21.5

21.1

21.3

Export volume (ML) Export value (millions NZ$ FOB)

19.2

27.1

31.1

51.4

57.8

88.6

112.6

142

154.7

168.6

198.1

246.4

281.9

302.6

434.9

512.4

698.3

797.8

991.7

1,041

1,094

*Estimate

Source: New Zealand Winegrowers. 36 The Australian & New Zealand Grapegrower & Winemaker

Re-pubilshed with permission from 2012 Australia & New Zealand Wine Industry Directory www.winebiz.com.au

April 2012 – Issue 579

Economics Where others faltered (including Australia) NZ powered on – growing its wine export value by almost 5% to $NZ1.1 billion in 2011. Domestic sales of its wine, according to the 2012 Australian and New Zealand Wine Industry Directory (WID), also increased, to 66 million litres – an increase of 17%. At the same time, its grape harvest increased by 23% – to 328,000 tonnes – and according to the following responses, the country could be facing a possible shortage of grapes in the coming years. Making up almost 50% of that national harvest is Sauvignon Blanc. The WID, using New Zealand Winegrowers’ Annual Vintage Survey, estimates NZ’s total vineyard plantings to be 33,600ha. Sauvignon Blanc planting is 16,758ha, a drop of 0.9% on the previous year. Pinot Noir is the second highest variety planted at 4803ha, followed by Chardonnay at 3823ha then Pinot Gris at 1725ha. Do you believe there is an ideal NZ national harvest total that will help get NZ back into the supply and demand balance? How close is NZ to achieving this?

Joe Stanton, Constellation, believes there’s no supply and demand imbalance in NZ – a perception supported by his fellow top 5 wine company chiefs. “For the year to 30 June 2011, the industry sold more than what it produced in 2010 and all the indicators at this point suggest that for the year ending 30 June 2012 the industry will sell the equivalent of its total 2011 harvest. If industry growth forecasts are met, there is a strong likelihood of shortages starting to emerge within the next three years,” Stanton said. “The major issue facing the industry right now is one of profitability, for both growers and wineries. A combination of an overvalued NZ dollar coupled with a significant proportion of volume growth being driven by private label in the UK

April 2012 – Issue 579

and Australia is putting pressure on export earnings. “Opportunities to grow sales of NZ wine in the domestic market are limited, as there is little to no total wine category growth. There is some switching occurring as consumers move away from imported wines in favour of NZ-produced wines.”

If industry growth forecasts are met, there is a strong likelihood of shortages starting to emerge within the next three years. Joe Stanton Constellation

Sir George Fistonich, Villa Maria Estate, believes the ideal level is a vintage in line with profitable demand. “The NZ wine industry is certainly not at that point yet but we are a lot closer than we were in 2008 and 2009, given the progress we have made in growing key export markets,” Fistonich said.

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NZ has found its fame with Sauvignon Blanc, but should the focus remain on this variety, or is there now room to build on this ‘fame’ and offer some alternatives (more well-known or not so well-known)? If so, what alternatives do you think are wellplaced for NZ to push forward?

Jim Delegat, Delegat’s Wine Estate, says aside from NZ’s famous Sauvignon Blanc, it continues to make some the world’s most distinctive and remarkable cool climate Chardonnay, Pinot Noir, Merlot and sparkling wine. “As a business, we have continued to create consumer demand and establish category leadership for each of these varietals. For example, we are the biggest seller of premium Chardonnay in Canada, of Merlot in the UK, and of Pinot Noir in Australia,” Delegat said. “This shows what NZ is capable of achieving in the global marketplace through strongly branded super-premium wine and robust business plans.” Rory Glass, Lion, believes the intrinsic advantage of producing a wine varietal that has both broad appeal and the ability to be produced better in NZ than anywhere else, should not be overlooked. “I think there is still tremendous scope for growth of the Sauvignon Blanc grape varietal and as such it should continue to be a primary focus,” Glass said. Fabian Partigliani, Pernod Ricard, says Sauvignon Blanc remains a real strength, but Pernod Ricard also believe there is more room to grow and innovate. “There is potential to create wine styles that stand out on the world stage and there are lessons to be learnt from Sauvignon Blanc and Pinot Noir,” he said. “We saw this potential with Sauvignon Gris when it was a largely unknown wine style, and we continue to be excited and enthusiastic about our Sauvignon Gris.” Pernod Ricard launched its Sauvignon

The Australian & New Zealand Grapegrower & Winemaker 37

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new zealand wine companies Gris a little over one year ago, and the company is beginning to expand into new markets. “It is a varietal which, we believe, will not only help drive the NZ category internationally but will also help to broaden the portfolio of products that NZ is recognised for across the globe,” he said. “Organic and sustainability are also key growth areas for us. We have several blocks within vineyards under organic management practices and have produced wine from fully certified organic grapes from vintage 2011. This is a very exciting space and one which we are watching very carefully.”

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Australia’s wine industry was the first to feel the harsh effects of the boom and bust of oversupply and demand, timed with a global financial crisis. Given our close proximity and shared industry climate, should NZ’s wine industry have been better prepared to avoid a climate that is now seemingly following a similar path as Australia?

Stanton believes NZ’s proximity to Australia has allowed it to be “unfairly tarred with the same brush” in the eyes of a number of global industry participants. “This view is unfortunate, as the dynamics of the NZ wine industry are quite different from Australia,” Stanton said. This is best demonstrated by two key points, Stanton said, the price-points and markets for NZ wine. “First the average sell price of NZ wine in global markets is considerably ahead of what Australia has been able to achieve,” he said. “Second, the exports of NZ wine are far less reliant on the largely unprofitable UK market, where so much Australian wine has been sold.

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38 The Australian & New Zealand Grapegrower & Winemaker

“NZ has had the benefit of observing and understanding the drivers that have led the Australian industry to its current state and, hopefully, we have learnt from this and taken the appropriate action to avoid falling into the same trap.” Delegat believes though NZ still has the benefit of strong and growing international demand for its wine, it’s not without some possible hurdles ahead. “As we know, supply has increased at a faster rate over recent times, creating an industry supply imbalance. Without strategic www.winebiz.com.au

April 2012 – Issue 579

planning or established routes to market, many NZ wine industry participants have found themselves with excess supply, exacerbated by a number of large vintages,” Delegat said. “In this sense, the industry most certainly could have been better prepared. What happens to this juice is perhaps the most concerning. “NZ wine as an industry and as a brand cannot sustain low prices and commoditisation. This has the potential to undermine the industry’s quality image, premium pricing and, ultimately, demand in the long-term.” Glass believes NZ should have seen the parallels with Australia and, as such, been better prepared. “Fortunately, unlike Australia, the grape variety that gave rise to the oversupply situation, Sauvignon Blanc, was enjoying stellar growth in both the domestic market and key export geographies. Hence, it did not take too many years for demand and supply to come back into equilibrium and the corresponding potential for disaster was largely averted.” Fistonich agrees with Glass, and believes

April 2012 – Issue 579

NZ’s wine industry probably should have been better prepared. “What we saw leading up to 2008 was some irrational exuberance and investment in the industry, some of which was just not interested in the facts. There were plenty of warnings for all to hear, but many chose not to listen.”

Fistonich, however, differs from Glass as he believes “New Zealand’s cool climate grapegrowing conditions are the perfect environment for producing crisp fresh rosé wines”.

Varieties and markets

Stanton: We introduced a lower alcohol (9%) offering in the NZ market prior to Chistmas but it is too early to tell whether it is going to be successful or not. At this, stage we have no plans to take it to any other market.

Rosé wines have done well of late in Australia but seem to be levelling out. How do you see the potential of rosé in NZ? .

Glass had the most to say on this variety than his fellow interviewees. He says, in theory, rosé should have promise as it is a relatively innocuous, easy-drinking style that could satisfy a broad range of palates. “Unfortunately, I think it has two factors working against it in NZ. Firstly, it is not seen as a serious wine style that we as a topography have a God-given advantage in producing and, given our growing predilection for NZ wine, I think this poses a problem,” Glass said. “Secondly, I cannot help thinking that its success in the early ’90s as a mainstream offering has tarnished the style’s cache in many people’s eyes.”

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Lower alcohol brands have also increased, globally, since last year. Do you have one, or are you planning to introduce one?

Delegat’s and Pernod Ricard are yet to release into this market. Delegat said it’s not in its plans, while Pernod Ricard suggested it was a market it would monitor carefully. Glass believes lower alcohol wines address the growing consumer focus on moderation and wellbeing – but finding success for this style of wine may not be easy. “On paper, I think this presents an important growth area for the wine industry,” Glass said.

The Australian & New Zealand Grapegrower & Winemaker 39

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new zealand wine companies

“The secret to success will lie in creating wines that are not viewed as ‘poor cousins’ to the wines that consumers enjoy today. This will be by no means an easy task but given the opportunity, we are certainly investigating this space.” Fistonich, however, said Villa Maria has developed a lower alcohol Riesling, which has found favour with consumers.

Domestic and export markets As previously pointed out, domestic sales of New Zealand wine increased by a whopping 16.9% last year. NZ wine also increased its share of the domestic market, growing from 62% to 71% last year. A stark contrast to Australian wines’ falling stake in its own domestic market. With more NZ wine on the shelves, it makes sense that sales of imported wines dropped. Imports from Australia dropped by 15%, however, Australia did gain ground in terms of its share of the import market lifting from 76% to 83%. New Zealand also increased its exports, growing by almost 5% and ranking the country as ninth largest in terms of export value. The impact of foreign exchange on the key export markets has been significant. According to the recent New Zealand Winegrowers’ Strategic Review, NZ exporters have lost approximately $80 million of revenue in 2011 (compared with 2007) from key markets across bottled and bulk wine due to the appreciation of the NZ dollar. Have you needed to adjust your export sales to accommodate this – i.e., change markets or raise domestic sales?

All five companies acknowledged the big impact the high NZ dollar was having and were implementing plans to mitigate its effect on earnings. Stanton said: “We have an increased focus on driving growth in the markets

that provide the largest profit pools for NZ wine. “While raising domestic sales has no foreign exchange risk, there is limited potential to profitably grow sales in the local market. “Our domestic market focus has been centred on growing the sales of our premium wines and new product development by introducing new, exciting brands to consumers. Examples are Selaks Reserve and The Peoples.” Delegat said the company’s focus remained on preserving long-term equity and profitable growth. “Our biggest adjustment has been in pricing. We have successfully implemented price increases in the UK and Ireland, which has resulted in a decline in volume, but realised improved profitability,” he said. Fistonich said Villa Maria had been exporting to the UK market for almost 25 years and, as a consequence, the UK had grown to be its largest market. “While we are keen to get the greatest monetary returns as possible, it can be fraught with potential problems. For example, while the strengths to the NZ dollar against the Pound is resulting in lower returns if we were to divert wines from that market, we would lose market share and struggle to gain it back,” he said. From your own company’s perspective, what is your view on: 1) The Indian market over the next three years?

Constellation, Lion and Pernod replied that India, currently, garners little to no attention as an export market. Delegat, however, said his company viewed Indian wine consumers as highly educated, informed, and enthusiastic –

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April 2012 – Issue 579

and an “exciting” opportunity for exports in the future. “These enthusiasts are relatively few in number and it may be some time before an attractively large market develops for super-premium wine brands,” Delegat said. “Taxes on imported wine are still very high and the retail sector remains highly focussed on budget wines. That said, we expect India to be an exciting opportunity for NZ wine in the future, considering it has one of the fastestgrowing middle classes in the world.” Fistonich is already exporting to India, though only small amounts. “It certainly holds great potential over the next few years,” he said. 2) The UK market over the next three years?

Stanton said while the UK remained a strategic market from a branding perspective the prospects of making a profitable return are challenging. “Other markets are more attractive from an economic viewpoint,” he said. Delegat agrees UK is important but it’s a market of considerable challenges. “Currently five of the top 10 NZ wines in the UK are private label and this number is expected to increase, placing downward pressure on the average price of NZ wine,” he said. “Consumer demand for NZ wine will, however, continue to grow and the potential for Chardonnay, Pinot Noir, Merlot and sparkling wines is significant.” Glass is a little more optimistic. “Despite the obvious cyclic challenges brand NZ remains strong in consumer eyes and I think we are still only scratching the surface when it comes to market penetration,” he said. Fistonich says changes on the homefront will help influence the market in the UK. “While we expect continued

challenges, smaller vintages in 2012 and 2013 will create some welcome opportunities for branded product as supply comes back into balance,” he said. “It’s a good time for NZ to reinforce key messages of quality, sustainability and responsibility. These values attract a discerning but loyal consumer as well as also being in line with many of the requirements currently being made of the UK trade.” 3) The Asian market over the next three years?

Delegat believes the important distinctions between the different countries in Asia, should not to be overlooked. “Singapore and Hong Kong are wellknown as sophisticated wine markets, both enjoying tremendous growth and, in which, the NZ category is trading very well,” he said. “China is a significant opportunity being pursued by many wineries. However, it is a highly complex and dynamic market, one that must first be properly understood before being pursued so that time and money are spent on highvalue, sustainable initiatives.” Delegat also believes Japan is a market looking for new wine experiences and ripe for NZ’s wines. “In all of these markets, one of our primary goals is to have a great deal of respect for the way in which business is conducted, to ensure we get the best results from these growth opportunities that have everyone so excited.” Partigliani agrees Asia offers good opportunities for the NZ wine business but Pernod Ricard are approaching it slowly. “While we expect sales to this market to increase over the next three years, we continue to view the key growth drivers as coming from the US, Canada, UK and Australia,” he said.

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www.awiclosures.co.nz The Australian & New Zealand Grapegrower & Winemaker 41

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Consolidation of retail in Australia and the UK, along with consolidation of distribution in America, has constricted routes within the three largest markets and presents a barrier to selling wine. What is your view?

Delegat believes retail consolidation does and doesn’t pose a problem. “Consolidation of retail in the Australia and the UK will see continued growth in private label wines and a decline in producer-owned labels,” he said. “It will also see competition in the on-premise channel intensify as producers exit retail channels of distribution. Strongly branded, premium-priced wines with a high rate of sale will continue to grow in this environment. “To achieve this, producers must deliver robust business plans, backed by skilled and dedicated sales and marketing resource.” Glass agrees and said: “From a supplier perspective, consolidation only poses a problem if you are attempting to peddle wine that has no meaningful consumer point of difference.” Adding to the above difficulties are private label brands. Do you already or will you work with retailers to develop private labels?

Stanton said Constellation’s chief focus was on its premium brands but acknowledged – as did Pernod Ricard – that private label needs were part of the relationship with major retailers. Delegat’s do not produce or develop private label brands. “A trusted recognised brand is a winery’s greatest asset and source of sustainable long-term earnings. Wineries focussing on private labels place themselves in a vulnerable position as a commodity supplier,” Delegat said. Glass said though Lion had supplied private label brands in the past it was not something it was keen to continue. “It is not something that we are particularly good at nor passionate about, so it is not central to our growth aspirations,” Glass said.

It’s been 10 years since the formation of NZW and the timing is right to take further steps to create both a more efficient organisational structure and improve the effectiveness of NZW’s governance Joe Stanton (left) Constellation

Exporting wine for overseas bottling is growing. Has this helped improve profit margins? Will you increase the amount of wine you export in this fashion over the coming year?

The only one of the top 5 wine companies in NZ to bottle wine overseas is Constellation. Stanton said there were a number of reasons that prompted this decision. “From a sustainability perspective shipping in bulk has less impact on the carbon footprint than shipping as packaged goods,” he said. “From an economic perspective the benefits gained from bottling in-market do not work to improve profit margins. They simply help mitigate the impact of the high NZ dollar.” Lion, Delegat’s, Pernod Ricard and Villa Maria bottle all their wine in NZ, though Glass admits the cost-savings associated with bottling overseas are being considered. Delegat’s recently opened its own stateof-the-art bottling facility in Auckland.

Industry - general In December last year, NZW announced the findings of a strategic review, which called for a big rationalisation of its governance and improved industry and research targets. Conducted by Price Waterhouse Coopers, the review has received the backing of all five major companies –

42 The Australian & New Zealand Grapegrower & Winemaker

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several of whom sit on the NZW board as directors. Among its recommendations, the review called for changes to the NZW governance structure, the development of vineyard registry, as well as new marketing and research priorities. The recently released NZW Strategic Review, conducted by Price Waterhouse Coopers, recommended that NZW consolidate and rationalise its structure as a national body. Do you agree?

All the top 5, backed the NZW review and support further rationalisation. “It’s been 10 years since the formation of NZW and the timing is right to take further steps to create both a more efficient organisational structure and improve the effectiveness of NZW’s governance,” Stanton said. Delegat has added his support to the review and the goal of refocussing NZW’s core activities. “If a rationalised structure is required to achieve this, then I am in agreement,” he said. Glass congratulated NZW for commissioning the review. “It was a timely and worthwhile exercise and we look forward to contributing to ensuring the organisation is best structured to remain the peak body representing the interests of New Zealand’s wine industry well into the future,” Glass said.

April 2012 – Issue 579

discussion regarding a potential change to volumetric alcohol tax for wine. “At this point, it is estimated that a change of this type would likely be damaging to producers of bulk and lower priced wines and closer to neutral for those who produce premium and superpremium wines. Regardless of the type of tax regulation being applied, a level playing field is extremely important so as to ensure a robust marketplace where it is the end consumers who ultimately choose which wines to enjoy.”

Recently, Australia’s top three wine companies split from the rest of the industry and its peak wine body, Winemakers’ Federation of Australia, and called for major reforms to the Wine Equalisation Tax (WET). Among the calls for reform, they want to freeze out New Zealand access to the WET rebate. Do you believe NZ companies should have access to this tax rebate?

Stanton says he just wants to see a consistent playing field as provided for under the CER agreement between NZ and Australia. “This means that nearly all NZ wine companies are entitled to participate in the WET rebate scheme for sales that they make into Australia for as long as that scheme continues,” Stanton said. Delegat was the most expansive with his answers and believes potential WET reforms address two key issues, one which involves the WET exemption and the other involves recommendations around volumetric tax on alcohol within wine. “For the first issue, we support the concept of an open market between Australia and NZ and, therefore, we support the continuance of all wineries in Australia and NZ being able to claim

April 2012 – Issue 579

George Fistonich

the exemption,” he said. “Both countries have large numbers of smaller wineries that face great challenges in such a competitive and capital-intensive industry, and which would not be able to properly function without the exemption.” For the second issue, Delegat said the company is closely monitoring the

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Partigliani reiterated the stance Premium Wine Brands announced in Australia last September, alongside the two other major wine companies, Accolade Wines and Treasury. “Premium Wine Brands believes that urgent reform is needed to assure the future of the Australian wine industry,” he said. Glass was a little more reserved in his comments. “The trans-Tasman single economic market and the whole matter of tax is a fairly challenging area for debate and probably one that’s better given its own dedicated forum,” he said.

The Australian & New Zealand Grapegrower & Winemaker 43

grapegrowing Fresh calls for national clean plant network Concerns about the status of Australia’s grapevine germplasm collection have been resurrected, with several industry stakeholders calling for a national discussion and strategy Kellie Arbuckle

Viticulturists are calling on the wine sector’s statutory and advocacy associations to find a way to fund a national clonal collection so Australia’s valued clones can maintain a high level of protection, traceability and accessibility. More than 80 of Australia’s oldest grapevine clones which date back to pre-phylloxera were grubbed up with the closure of CSIRO’s Merbein research station late last year. Prior to this, cuttings of the clones were taken, propagated and then replanted at CSIRO’s Koorlong Farm, near Mildura. The removal of the CSIRO Merbein collection – which contained more than 1000 varieties, clones and species – and the relocation to Koorlong Farm has sparked calls for a national high health status collection. Concerns that Australia’s clonal heritage is under threat has intensified, with the clonal collection no longer available to industry. Prue Henschke of the acclaimed Henschke brand in Eden Valley is a passionate advocate of grapevine improvement and preservation. She says the current situation in Australia is “a disgrace” and that the wine industry bodies need to do something about it. “The industry needs to discuss the issues facing us and come to some agreement about how we maintain a high health status collection... our growers rely on it,” Henschke said. “The biggest issue is that there is no fully funded national strategy for clonal or even varietal preservation, especially of the original pre-Phylloxera material that formed the basis of our early wine industry.” For years, Henschke, as chair of the Adelaide Hills Vine Improvement Inc (AHVII), has been advocating a better solution. Her concerns were heightened last year when she saw a presentation at the Australian Wine Industry Environment Conference. In September, more than 200 wine delegates congregated at the Adelaide Convention Centre for the conference, which centred on the need for the wine industry to better equip itself for future challenges, like climate change. Travelling from Portugal to present at

44 Grapegrower & Winemaker

CSIRO Merbein station for sale The former CSIRO Merbein research station, once home to some of Australia’s oldest grapevines, is up for sale. The research laboratory, which was established in 1920, has long been the site for research in viticulture, plant physiology, biochemistry, fruit processing and fruit trees. The lab’s move onto the real estate market completes the staged closure of the Merbein laboratory, which was first announced by CSIRO in May 2008. More than 1000 varieties, clones and species that were originally planted at Merbein were excavated. Prior to this, cuttings were taken, propagated and then re-planted at CSIRO’s Koorlong Farm, near Mildura. Research at the farm will focus on winegrapes and grapevine rootstocks, with research at the site to be directed from the division’s Adelaide laboratory. The former Merbein research site was home to a number of research achievements, particularly in viticulture. The first trials of grapevine mechanical harvesters in Australia took place at Merbein and nematode tolerant rootstocks were introduced and evaluated. Trellis systems were improved and new systems for lighter or minimal pruning of winegrapes were also developed at Merbein.

the event was António Rocha Graça, of Sogrape Vinhos – Portugal’s largest wine producer and a co-founder of PORVID, a public-private association responsible for the preservation, study, selection and dissemination of clones. In his presentation, Graça shed light on how Portugal came to realise the value and variability of clones. It was this presentation that stood out for Henschke, as it offered a fresh perspective into how grapevine diversity could be maintained in Australia. Graça spoke about Portugal’s unique situation: Instead of excluding clones infected by virus, as was done in most EU and non-EU countries, Portugal set out to select clones without losing diversity, through the establishment of a grapevine selection program (PORVID). The association is now responsible for conserving the vast heritage of Portugal’s native and domestic varieties in a 273 hectare conservation park for grapevine variability. Education, research, industry and government bodies united on a national scale to establish PORVID for this very role. The idea was that clonal preservation for grapevine diversity would offer potential for new wines that might improve grape production in the face of climate change, emerging pests and changing consumer trends. “Using a group of clones [as opposed www.winebiz.com.au

to a single clone for a whole block] will make grapegrowing less prone to year-on-year variation (such as anthocyanin and sugar levels) and achieve greater productivity efficiency,” Graça said. “Choice of varieties or their clones showing higher resistance to disease is also a potential means of reducing chemical input in the vineyard.... which translates to an increase in biodiversity.” In discussing Portugal’s approach to clonal preservation, Graça made reference to the situation in Australia, highlighting what he described as an opportunity being massively overlooked. “Australia has a treasure in its ungrafted vineyards,” he said. “Because they were planted in a moment when no organised selection was being done in Europe (19th century), these old, own-rooted vineyards may have a high level of clonal diversity in them, probably much higher than those found in the original European countries.” Shiraz is a prime example. “In France, the vast majority of Syrah vineyards were replanted and grafted onto rootstocks at the onset of the 20th century to avert Phylloxera vastatrix. These vineyards are younger than the oldest Australian vineyards, which were planted in the time of James Busby and are still in production,” he said. “A program to replicate these April 2012 – Issue 579

Shiraz clones on a new field to assess genetic-driven characteristics, free of environmental bias, would provide Australia with an invaluable tool that would be unique at a world scale.” There are vast differences to Portugal’s approach to clonal preservation compared with that in Australia. Unlike the situation in Portugal and other EU countries, which have one national collection that are funded and maintained, Australia has collections containing a mix of registered and unregistered clones (or selections) – with various levels of funding and maintenance. The South Australian Research and Development Institute (SARDI) at Nuriootpa is home to about 400 varieties, some of which are represented by multiple clones. This includes about 60 of some of Australia’s oldest Shiraz clones, as well as Cabernet Sauvignon and Grenache. But unlike the Portuguese collection, this collection – like the CSIRO collection – is now used only for research purposes – a decision made by industry back when the Albarino/Savagnin mixup occurred in 2009. The Australian Vine Improvement Association’s (AVIA) National Nuclear Collection at Dareton Research Station is another collection, consisting of more than 200 grape varieties and clones – but there are many more smaller private collections. As Australia’s main clonal collections are not accessible to industry, more growers are relying on imports, which can be costly and time consuming. The AHVII has been involved in a number of imports, but the cost of importing a dormant cutting into quarantine is about $3000 per entry. Propagation costs to establish a meagre source block of 500 vines costs about $8 a vine and it takes about five years to reach a point of producing enough cuttings to establish one hectare of vineyard, if all

Prue Henschke believes a national vine improvement network would bring about the security many in the industry consider necessary.

goes well. Henschke says the issues of most concern are health status and identity. “The biggest issue is that our genetic resources are unfunded, which means it’s not being maintained both in its health status and its trueness to type,” Henschke said. By importing material from overseas, growers also run the risk of introducing virus-infected stock and trunk borne diseases which, at present, are not widely spread in Australia. There is also the risk of introducing incorrectly named material. “Taking cuttings from over the fence or non-accredited nurseries leads to serious issues with guaranteeing the correct varietal and clonal identity, and

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April 2012 – Issue 579

the quality of the material, requiring expensive replanting and the possibility of poor performance from diseased stock,” she said. A confidential CSIRO-SARDI discussion paper on the Future of Grapevine Variety Collections in Australia was presented to the peak industry bodies. The paper identified key issues relating to Australian collections – such as maintenance costs and correct variety identification against agreed international reference standards – but these issues are yet to be resolved. There are others in the industry who have voiced their concern, including AVIA chairman Kym Ludvigsen. Ludvigsen has been pushing for a national grapevine clonal collection for the past decade, but to no avail. On 15 February this year, he met with representatives of the GWRDC, Winemakers’ Federation of Australia and Wine Grape Growers Australia to discuss the possibility of establishing a ‘national clean plant network’. Ludvigsen supported a view that CSIRO, AVIA and SARDI merge their clonal collections into one major national collection to be managed by an industry committee and coordinated by a curator. In an approach similar to PORVID, the collection would be funded through a combination of government and industry, possibly through a plant health levy. Its main role would be to have a fully verified varietal collection, whereby varieties have been DNA tested against internationally agreed reference standards. “The curator would manage the collection of grapevines and clones, coordinate DNA profiles, look to maintain a virus monitoring and elimination program, including verification of virus elimination through biological indexing, develop propagation techniques, look after biosecurity and

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grapegrowing coordinate all imports through a single program,” Ludvigsen said. He says the need to come up with a national strategy has been exacerbated by recent changes made to Wine Australia’s Label Integrity Program. The changes, which came into effect late last year, effectively put the onus on the grower to provide accurate identification and traceability of the wine on the wine label. “The program requires us to ensure that any wines we sell are what we think they are,” Ludvigsen said. Henschke said the industry had geared itself to produce wines labelled with respect to varieties and so it needed to support the database for identity, health status and traceability.” Ludvigsen says Australia is at risk of losing it’s vine heritage if the industry doesn’t respond. “The grapevine is the basis of our industry. It is the plant that provides the fruit for the wine that we consume at our leisure and for our pleasure.” The GWRDC would not respond to specific questions about the potential of creating a national clonal collection, but acknowledged the importance of grapevine selection. “The GWRDC appreciates that planting material is the foundation of the wine sector,” GWRDC executive director Neil Fisher said in an email. “The GWRDC will continue to invest in research that focusses on evaluating and identifying rootstocks, varieties and clones

that produce desirable wine styles, while possessing a number of other essential properties such as tolerance to drought, heat, salt, soil-borne pests and diseases.” SARDI principal scientist and head of SARDI Viticulture Michael McCarthy has a career-long involvement in vine improvement, including the identification and development of the SARDI heritage collection of Shiraz clones. He says the 60 or so Shiraz clones at the SARDI Nuriootpa Research Centre could hold enormous potential, but inadequate funding means they are just “sitting there”. “Very few of these clones have been thoroughly assessed as far as having unique properties for colour, flavour and sensory properties,” McCarthy said. “These clones might be better adapted to climate change than the existing clones we’re currently using, but that work is just not happening. “There are enough scientists on the ground interested in doing this, but the lack of funding is the obstacle.” McCarthy says clones that are better adapted to a 2030-2050 climate could exist within existing planting material and well-known varieties. “We can either move, plant new varieties or alternative varieties, or we can look at the genetic diversity within existing iconic varieties to see if there are better adapted clones,” he said. Style is another topic and one which has led to many Australian wineries to develop their own selection programs, be it clonal or mass. Among these are Henschke and Yalumba. “A national vine improvement network can bring about the security many of us consider necessary for the wine industry to carry it through the future challenges of changing market trends and the big one, climate change,” Henschke said.

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April 2012 – Issue 579

Team effort needed for happy resolutions Jen Barwick

Disputes regarding grape purchases happen for the most part when one or both parties are unhappy over the perceived unfair rejection of winegrapes, unfair price or grade or failure to meet contractual arrangements. Few would disagree that as the financial pressures on both sides continue to be felt more keenly, cracks in the relationships between growers and wineries have become more audible. The Winemakers’ Federation of Australia (WFA) and Wine Grape Growers Association (WGGA) acknowledge that, during the challenging 2011 vintage, disputes over contracts and grape purchases did escalate. As a result more attention has been given to the opportunities for mediation or independent advice. The Australian Wine Industry Code of Conduct outlines a specific dispute resolution process, which includes access to a list of independent experts who can provide technical and independent assessments of quality or disease levels and mediation. Under the Code’s dispute process, both parties agree to pay for the expert, and agree that the determination is final and binding on both parties. For more information about the Code, visit: www.wineindustrycode.org. The above process is open to the seven current wineries who are signatories of the Code and their contracted growers. However, WFA and WGGA (and most regional associations) advise all their grower members to ensure a clause is included in all contracts that allow independent experts to be called, if a dispute arises. Retallack Viticulture director Mary Retallack is one of a list of 21 consultants listed as independent experts in the Code’s Dispute Resolution Process. Retallack says it’s critical everyone in the industry understands their rights and responsibilities in utilising a range of alternative dispute resolution processes. These alternatives include the ability to seek: • a mediator (informally or formally) to facilitate the discussion process so each party can reach a suitable outcome • an independent expert to provide a technical assessment of fruit quality or the application of the grape sale agreement • an outcome through the Code (should the winery be a signatory). April 2012 – Issue 579

Best method Retallack Viticulture director Mary Retallack has provided the following advice on understanding the difference between incidence and severity. If one berry in each bunch of a 200 bunch sample has a particular disease or physical damage present, this would equate to 100% incidence. If however only one berry per bunch is affected, obviously the severity is low. For example, if there are 100 berries on each bunch and one berry is damaged, then this equates to 1% severity. The way the weighted severity is calculated will depend on the sample size (200 bunches are normally assessed), the severity of the disease or physical damage on each bunch, and how this is visually assessed into severity categories. If the following severity categories are used (0%, >0-3%, 3-25%, 25-50% and >50% damage) the severity for the example above would be 1.5%. When faced with a downgrade or rejection percentage it is important to assess this % as weighted severity (not just incidence). Incidence is for example the number of units (in this case bunches) affected by disease or physical damage within a population (representative sample). i.e. Either a bunch is or is not affected. Incidence (%) = The number of infected or damaged units x100 Total number of units assessed Severity is the measure of the extent of the damage i.e. the percentage area of damaged fruit within a bunch. Severity (%) = Area of unit affected by disease or physical damage x 100 Total area of unit

“In any event, if either party is uncomfortable with the assertions being made by another party, it is always advisable to involve an independent and suitably qualified third party that can offer a second ‘set of eyes’, an independent assessment of fruit quality, or if required an expert determination under the code,” Retallack said. The independent expert system works well, Retallack says, if: • the expert is truly independent and there is no perception of bias • winegrowers and purchasers understand their right to involve an independent expert to assess fruit quality if there is a dispute • an expert is available at short notice • they can afford to engage an expert • both parties agree to be bound by the expert’s findings.

National standards The disease pressures evident in the 2011 vintage highlighted the level of knowledge (or lack of) regarding disease severity and incidence qualifications. Australia’s largest grape cooperative, CCW Cooperative Ltd, which contracts 600 Riverland winegrape growers, www.winebiz.com.au

admits 2011 prompted them to re-assess the methods they had previously used regarding disease incidence and severity. CCW chairman of directors Jim Caddy said, as a result of what they experienced in 2011, the company had been working hard to design its own robust standard method of assessment, and have it communicated openly in all contracts and with their growers. “Our contracts have always included the opportunity to seek independent assessments should growers not be happy. I’d think it would be pretty common for most contracts and companies,” Caddy said. “What 2011 really showed us was the need for quantifiable and transparent methods of assessment and for it to be communicated to all involved.” CCW have since worked with independent consultants and developed a more robust and standardised method of assessment. Outside of vintage, CCW’s two full-time viticulturists run grower workshops and provide company factsheets, with disease assessment, and fruit grading joining other topics such as irrigation guidelines and soil management. “We now have targeted education Grapegrower & Winemaker

grapegrowing modules on the way we assess grapes and communicate it to all our growers. The aim is that both parties understand the method and that hopefully growers will use the same method to run their own assessments throughout vintage,” Caddy said. He said a national standardised method of disease and rot assessment and grading system – supported by the latest research and industry knowledge – could help industry ensure a fair playing field. WGGA chief executive Lawrie Stanford agrees. “The MOG index, agreed between winemakers and growers, is an example of this type of thing in action,” Stanford said. “In the case of disease, a mechanism like this would sort out the contentious issue of incidence and severity. This issue goes beyond disease and relates to the area of trade measures in general – that is, the use of any measure in setting price. “If anything is to be used to set price (e.g. Baúme and colour), it should be defined, accurate measuring instruments made available and regulated. “The benefit, of course, is not just fair trade but also that a purchaser is able to specify what they want (on good scientific grounds) and get it because the grower knows, and trusts what’s required and can produce to that.” Retallack says the problems of 2011 were aided by what she believed was a general lack of understanding about the difference between incidence and severity when assessing disease and physical damage to grapes in the vineyard. Some of these issues have carried over into the current season. “In some cases disease and/or physical damage to fruit is reflected in grape sale agreements as a percentage (i.e. sound

“What 2011 really showed us was the need for quantifiable and transparent methods of assessment and for it to be communicated to all involved.” Jim Caddy CCW Co-operative

fruit, downgrade or rejection percentage) and often there is no threshold or a method for assessing stated,” Retallack said. But before a standardised method is approved at a national level, Retallack believes more research and work is needed to qualify what the best way of assessing the severity categories for a range of diseases (i.e., powdery mildew, Botrytis and other bunch rots) and physical damage (i.e., sunburn damage and bird peck) on different vine parts (i.e., bunch, rachis and leaves) as well as an indication of appropriate sample size to ensure a high degree of confidence in each assessment. “We also need further research about the thresholds of different diseases and physical damage, and how this relates to the quality of the fruit when made into wine,” she said. “Assessments must be standardised, transparent and repeatable.” “Luckily we now have access to the ‘bunch rot assessment trainer’ at www.bunchrot.co.nz, which provides a training for assessors to determine the level of different severity percentages of each bunch – but there is still a lot of

work to be done in this area. “We should be long past the days of someone walking a few rows in the vineyard and estimating the percentage of damage by ‘gut feeling’ which is a poor substitute for a professional assessment.”

The right timing WFA CEO Stephen Strachan says if growers or wineries are reaching for the contracts and seeking independent advice, it’s a sign things have already gone unnecessarily too far. “The bottom line is it’s better for everyone to explain all up front and have all these details understood before you sign on the dotted line or start harvesting,” Strachan said. Stanford says more can be gained out of a dispute process by being professional – in terms of the evidential background or legal interpretation of the case being made, and in terms of conducting the discussions around the matter. “Disputation is not easy at the best of times; it will cost in dollar terms as well as stress and energy. Best to avoid it by being proactive,” Stanford said. “Growers owe it to themselves to go the marketplace (i) knowing what they have to sell (the specs), (ii) being clear about what it is worth (based on evidence) and (iii) being prepared and able to negotiate on this preceding knowledge.” As a good starting point, visit the WGGA website and review the resources available regarding winegrape sales at: www.wgga.com.au/winegrape-contractsresources-for-growers including ‘A Guide to Negotiating the Sale of Winegrapes in the Barossa’ at: www.barossa.com/ B G WA / g r a p e b a r o s s a / r e s o u r c e s _ grapebooklet.aspx.

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April16/03/12 2012 – Issue 579 12:36 PM

Pre-flowering defoliation as a vineyard management tool for cool climates Mark Krasnow

Botrytis and other bunch rots are one of the most common sources of crop losses in New Zealand viticulture and, indeed, in viticulture worldwide. Rot is more prevalent and spreads more easily in varieties with compact bunches. Leaf plucking prior to flowering has proven an effective botrytis management tool in Europe by significantly reducing the number of berries set per bunch. Presumably, less photosynthate available at the time of flowering reduces set and therefore leads to looser bunches. These bunches are less prone to rot, and previous European work has shown the fruit to have increased colour, skin thickness and polyphenols – all beneficial parameters for red winemaking. Leaf plucking is already a standard practice in wine production in Hawke’s Bay, though it is done later in the season than flowering (usually between set and bunch closure). A study in the 2010-11 season was carried out in Hawke’s Bay, the second largest and economically important wine region in New Zealand, located on the east coast of the North Island.

Vineyard trials The study included the most important varieties for the region, both white and red (Chardonnay, Sauvignon Blanc, Pinot Gris, Merlot, Cabernet Sauvignon and Syrah). A similar study was replicated in Cabernet Sauvignon in Mildura, Victoria, to see if the results were consistent in a warmer region. There were two objectives of the project: to assess the effect of preflowering defoliation on grape composition and rot incidence in rot-prone varieties (Merlot, Chardonnay, Sauvignon Blanc and Pinot Gris) and to investigate the effect of defoliation timing on yield reduction, grape composition, wine composition, and wine sensory properties in Chardonnay and the red varieties. Defoliation, regardless of the variety or location, was the removal of the six basal leaves by hand. Lateral shoots were not removed or defoliated. Pre-flowering defoliation (at E-L stage 17, or just as flower buttons separate from one another prior to capfall) was compared with leaf removal prior to bunch closure (the industry standard in Hawke’s Bay). All other vineyard practices (sprays, hedging, mowing, etc.) were carried out as usual. All trials were set up in each vineyard

One of the huge possible benefits of pre-flowering defoliation is that leaf removal and yield reduction can be accomplished in a single pass through the vineyard. Mark Krasnow

in a randomised block design with three replicates of each treatment. At harvest, 150 bunches (50 from each vineyard replicate) were randomly selected from the Merlot, Chardonnay, Sauvignon Blanc, and Pinot Gris experimental vines. These bunches were analysed for the number of berries per bunch, bunch weight, rot severity (as a percentage of affected bunch

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A preflowering Cabernet Sauvignon canopy before hand defoliation.

area), and bunch compactness. Basic grape compositional parameters (Brix, pH, TA, malate, tartrate and skin pigment in Merlot) were measured. In general, early defoliation reduced the number of berries per bunch (and therefore bunch compactness), bunch weight and rot severity in most of the varieties investigated. These differences were especially evident in Merlot and Chardonnay, with rot reductions as high as 50-75 per cent. This would greatly reduce the need to sort fruit, either during hand harvesting in the vineyard or after harvest at the winery. In contrast to European work on early defoliation, there were very few compositional differences between fruit from the different treatments. However, it must be noted that these previous studies compare early defoliated vines with non-defoliated vines, which were not included in our study, as defoliation is carried out at some point in all vineyards

The same canopy after removal of the 6 basal leaves from every shoot. In general, preflowering defoliation removes 60-80% of the leaf area.

in Hawke’s Bay. Wines were made from one Merlot, Chardonnay and Syrah site, and three Cabernet Sauvignon sites. Wines were analysed chemically for basic parameters, such as pH, TA, alcohol content, and tannin and anthocyanin content in the red wines. The Cabernet Sauvignon and Merlot wines were also analysed for 35 aroma/flavour compounds by gas chromatography (GC) and mass spectrometry (MS).

Trial results Not surprisingly, considering the lack of differences in grape composition, there were very few wine composition differences and no differences that were consistent across the varieties. Sensory analyses of the wines were unable to distinguish significant differences between early and later defoliation, showing no negative effects of early defoliation.

Ultra-premium wine production, especially of reds, in a cool climate such as New Zealand generally involves some sort of yield reduction, typically carried out by hand removal of whole bunches or parts of individual bunches during ripening. This is a time-consuming and costly practice. In addition to rot reduction, early defoliation has the added benefit of yield moderation, as bunches from early defoliated vines had fewer berries and were generally lighter. One of the huge possible benefits of pre-flowering defoliation is that leaf removal and yield reduction can be accomplished in a single pass through the vineyard. It is also possible that less or softer fungicides could be used, as bunches from early defoliated vines appear to be more resistant to rot than bunches from vines defoliated after set. This would greatly increase the environmental sustainability of vineyards.

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April 2012 – Issue 579

These benefits, with no observed negative effects on wine quality, make pre-flowering defoliation a desirable cultural practice, especially in cooler climates where the threat of rain around harvest and thus yield losses due to bunch rot, is greater. The possibility exists, however, that defoliation in the pre-flowering period (when bunches for the following season are being initiated in dormant buds) that yield in the following season could be adversely affected by this technique. Preliminary analysis in the 2011-12 season of vines defoliated before flowering in the 2010-11 season shows that, in general, bunch number per vine and berry number per bunch were not significantly reduced compared with vines defoliated at prebunch closure. At harvest in 2012, several of the sites used in the 201011 study will be compared to determine if pre-flowering defoliation in the previous season will affect final yield in the current season. Preflowering hand defoliation is not a panacea. The process is slow and costly, estimated at over a dollar a vine at one site. While it may save a pass through the vineyards to reduce crop later in the season, hand defoliation is much slower and more expensive than the typical mechanised leaf removal done in New Zealand. This makes it economically difficult to conduct on a large scale, except for ultra-premium wines where the added farming cost can be made up for by the higher bottle price. Current work is under way to investigate whether the same benefits of hand defoliation can be realised with much faster and economical mechanised leaf removal. Should this prove to be the case, it is highly likely that this technique will gain wider acceptance in cool climate regions such as New Zealand and certain parts of Australia.

Acknowledgement The author would like to acknowledge the tireless work of Petra King, without whom the project could never have been completed. Thanks also to Malcolm Reeves, Karen Ball, Tim Creagh, Melisssa Annand, Emma Peterson, Jeremy Hocquard, Vivek Khahar, and Jadmika from EIT. The authors would also like to thank everyone at Delegat’s Wine Estates, Te Mata Estate Winery, Villa Maria Winery, Pernod-Ricard New Zealand, Mission Estate Winery, CJ Pask Winery, Mills Reef Winery, Mandy Herbst-Johnstone and Paul Kilmartin from the University of Auckland, Kathleen Moffat and Lyn Bevin from HBWG, Mark Downey, Dale Unwin, and Marica Mazza from the Department of Primary Industries, Victoria, and O-I glass. Sincere thanks also to New Zealand Winegrowers, Hawke’s Bay Winegrowers, and the MAF Sustainable Farming Fund for financial support. Mark Krasnow is a senior lecturer at the Eastern Institute of Technology (EIT) in Hawke’s Bay, New Zealand. His areas of teaching are botany, plant physiology and viticulture. His contact email is mkrasnow@gmail.com.

VINE TALK The season leading up to vintage 2012 has seen a break from the record droughts and wet weather of last season. However, it has still been challenging compared to the run of drier seasons recently. High disease pressure and vigorous canopy growth across many regions has challenged growers to maintain effective spray programmes and balanced canopies. Vintage brings its own set of demands although it is important to take the time to conduct an objective analysis of pests and diseases within the vineyard this season. Taking the time now to make detailed notes of actual observations throughout the vineyard will be invaluable when you sit down to plan for next season. Consider both the incidence and severity of any powdery and downy mildew. Whereabouts in the block was it? Was it on the rachis, the berries or in the top of the canopy? Can you identify any particular areas in the vineyard or along the canes which were infected? This could be related to a particular point in time that corresponds with a weather event or certain spray round. I saw one vineyard recently where powdery mildew was only present on the fruit and rachis where the canopy was dense, indicating inadequate spray coverage in these areas. Was the spray interval too long due to the weather or mechanical breakdown? Was the spray coverage adequate? Was there any difference in the set up of the machine or the water volume applied? What ‘dilute water volume’ was used to calculate the amount of product required? Having all the relevant information in front of you when it comes to planning will result in a much more effective spray programme next season. This time of year is also good for monitoring rust mites although not for effective control. Rust mites (Calepitrimerus vitis) feed on the leaves causing them to “bronze”. This can result in premature leaf drop, exposing grape bunches to sunburn and potentially delaying ripening. Rust mites overwinter under the bark and have a very narrow window for control just prior to budburst. Identifying areas where rust mites are a problem is important so that effective control measures, such as a pre-budburst THIOVIT JET® and suitable oil, can be deployed next season. Also consider removing vineyard trash and pruning to set up an open canopy, increasing light penetration, airflow and spray coverage.

Additional readings

Intrieri, C., Filippetti, I., Allegro, G., Centinari, M., Poni, S. (2008). Early defoliation (hand vs mechanical) for improved crop control and grape composition in Sangiovese (Vitis vinifera L.). Aust. J. Grape Wine Res. Vol. 14, 25-32. Palliotti, A., Gatti, M., Poni, S. (2011) Early leaf removal to improve vineyard efficiency: gas exchange, source-to-sink balance, and reserve storage responses. Am. J. Enol. Vitic. 62:2, 219–228. Poni, S., Casalini, L., Bernizzoni, F., Civardi, S. and Intrieri, C. (2006) Effects of early defoliation on shoot photosynthesis, yield components, and grape composition. Am. J. Enol. Vitic. 57, 397–407. Poni, S., Bernizzoni, F., Civardi, S., Libelli, N. (2009) Effects of pre-bloom leaf removal on growth of berry tissues and must composition In two red Vitis vinifera L. clutivars. Aust. J. Grape Wine Res. Vol 15, 185-193 Tardaguila, J., Martinez ae Toda, F., Poni, S., Diago, MP. (2010) Impcat of early defoliation on yield and fruit and wine composition of Vitis vinifera L. Graciano and Carignan. Am. J. Enol. Vitic. 61:3, 372-381. April 2012 – Issue 579

Richard Lillingstone B.Ag.Sc. M.Oen Technical Services Lead - Viticulture Syngenta Crop Protection richard.lillingstone@syngenta.com - 0407 868 697 For details, please call the Syngenta technical product advice line on 1800 067 108 or visit www.syngenta.com.au

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grapegrowing

Mixed cost and quality effects from thinning The viticulture team at The Australian Wine Research Institute often field queries from grapegrowers at the AWRI’s roadshows. Here are two of the more common questions we are asked. I would like to try ‘sacrificial’ canes to reduce vine vigour and improve my fruit quality. How many extra canes should I use, one or two?

‘Sacrificial’ or ‘kicker’ canes are extra canes left on the vines at pruning (Figure 1). The concept is that the additional buds on the vines will reduce shoot vigour in spring and decrease canopy density. The system also has the benefit that if thinning is required, the extra canes (and bunches) can be removed with a single cut at or before veraison. Anecdotally, the resultant combination of reduced canopy density and yield is said to be more balanced vines with less fruit shading and better quality fruit. In 2003, the absence of any evidence to support this theory, AWRI viticulturist Mardi Longbottom and colleagues (unpublished) conducted experiments on four different varieties in South Australian vineyards. The treatments ranged from one to seven additional canes, which increased the number of nodes per vine by 130-300 per cent relative to the controls. In terms of shoot vigour, the use of just one or two sacrificial canes per vine did not significantly affect growth rate. It was only when four or more sacrificial canes were used (increasing the total number of nodes per vine by more than double) that there was a devigorating effect. Berry size and yield also decreased and vine balance (yield to pruning weight ratio) improved with four sacrificial canes. Despite this, there were no significant differences in berry sugar concentration, pH, TA, colour or phenolic concentration, but the wine from the four-sacrificial cane treatment on one of the varieties was the most preferred (Longbottom et al. unpublished data). The conclusions of this study were that the usual one or two sacrificial canes were insufficient to significantly affect fruit and wine quality. Vine balance was only improved when the number of nodes per vine increased by more than 50% with four sacrificial canes. This then raises the question: could the same improvement in vine balance be achieved with traditional pruning methods and higher node numbers? This would be a cheaper option to improve vine balance. On the other hand, one or two sacrificial

52 Grapegrower & Winemaker

A sacrificial cane (indicated by arrows) left on the vine at pruning in addition to the regular spurs.

canes might be beneficial as insurance against poor fruitfulness or poor fruitset and may offer a more economical option than traditional bunch thinning. It seems that every year as harvest approaches, I am asked by the winery to do last minute bunch thinning. Does this really achieve anything?

The aim of bunch thinning is usually to decrease yield and, by way of improved vine balance, achieve better fruit quality. The effects of thinning on fruit composition and wine quality vary depending on its timing, the variety and the extent of thinning performed. Extensive research has occurred on the subject of fruit removal at or before veraison. In general, when performed at or before veraison, sugar ripeness may be advanced, resulting in a more full bodied wine. Wine colour, phenolics and sensory properties may also be improved to varying degrees. Importantly, the results of bunch thinning are variable and do not always have an effect. It is also accepted that the earlier in the season that thinning is performed, the greater the possibility grape quality will be enhanced. The effect of removing bunches late in the season, however, has not been widely reported – except for the selective removal of diseased or otherwise inferior bunches. Curious about the potential of late thinning as a means of improving fruit quality, Longbottom and colleagues (unpublished data) experimented with some bunch-thinning in two blocks of Cabernet Sauvignon vines, one at Padthaway and the other at Waite, South Australia. Fifty per cent bunch removal at three different developmental stages was applied: 1) at veraison, 2) veraison plus two weeks, and 3) veraison plus four weeks. When the blocks were harvested, www.winebiz.com.au

bunches were collected from each of the treatments and the juice analysed for total soluble solids (TSS), pH and TA. While these measures may seem rudimentary, TSS (or sugar measured as Baumé) is the most basic ‘quality’ measure of most grape supply contracts. In these experiments, the late thinning treatments had no significant effect on any of these measures. In all cases thinning would have resulted in an economic loss. Removing fruit at any time of the season must achieve a significant improvement in quality to justify the cost of the operation and to compensate for the loss of fruit. Grape composition and wine quality are affected by more than just yield. Moreover, yield manipulation is more effective the earlier in the season it is performed. Removing fruit after veraison may actually be detrimental to ripening because of the decrease in photosynthetic activity that is known to occur in response to bunch removal at this stage of development. Well-balanced vines and the production of fruit for a desired composition are best achieved by using an integrated approach. This should start with the assessment of pruning level and attention to irrigation and nutrition throughout the season.

Ask the AWRI is a monthly column that focusses on viticulture and oenology issues in alternate months. AWRI winemaking and viticulture specialists are available to help Australian wine and grape producers. Call on (08) 8313 6600 or email at: winemakingservices@awri.com.au or viticulture@ awri.com.au.

References

Longbottom, M. L., Iland, P. G. and Dry, P. R. (2003) The use of sacrificial canes as a tool for vigour control – does it really work? The Australian & New Zealand Grapegrower & Winemaker Annual Technical Issue. April 2012 – Issue 579

post-harvest care

Organic fertiliser reaps high yields with consistent quality A whole-of-block trial in Tasmania has shed light on the long-term benefits of biological fertilisers and their role in mitigating the effects of climate change Kellie Arbuckle

A BIOL O GIC A L FERTILISER could offer grapegrowers a green alternative to synthetic Fertiliser & nutrition treatments without affecting wine quality or impacting cost margins. The fertiliser, known as Renew Biological Fertilizer, is backed by eight years of research and was recently shown to provide a number of benefits that could help ease the effects of a changing climate. A three-year trial comparing Renew with a synthetic fertiliser on a vineyard in Tasmania found Renew caused substantial increases in the soil’s carbon, water retention, biological activity and nutrient supply. At the same time, Renew was also found to reduce the need for synthetic fertilisers while reducing greenhouse gas emissions from landfill and burning. Renew research and development director Dr Alice Palmer conducted the trial via a whole-of-block approach from October 2009 to March 2012 on a Vitis vinifera cv Pinot Noir vineyard at Meadowbank Estate in the Coal River Valley. Palmer says the trial proved organic products can fit into viticultural management without additional costs or labour. “Until now, there has been a lack of peer-reviewed on-farm research illustrating that organic fertilisers can replace synthetic fertilisers at the same

cost,” Palmer said. “The ability of Renew to effectively supply nutrients and improve soil structure makes it an ideal input for grapes, while the healthy soil environment allows vines to produce a higher yield while maintaining quality.” Renew is produced from agricultural waste from poppy farms, vineyards and wineries, as well as from paper waste. When applied to the vineyard, it contains 38 per cent organic carbon. It takes 12 weeks for the beneficial micro-organisms to break down the organic waste and convert it into a fertiliser, during which time microbial activity is closely monitored along with carbon dioxide, humus, moisture, pH and nitrogen levels. Palmer says the science behind the product is what sets it apart from other biological fertilisers. “Normally scientists do pot trials at research institutions, such as universities, or small randomised complete block experiments in the vineyard,” she said. “In most cases, this doesn’t represent the environmental constraints or use of vineyard machinery and labour, which you will encounter when completing whole-of-block experiments in the vineyard.” While synthetic fertilisers are commonly used on vineyards, she says their benefits are limiting. “Synthetic fertilisers can leach through the soil and the plant is forcefed soluble nutrients, whereas Renew is

TRIAL RESULTS Application of Renew Biological Fertilizer led to: • increased soil infiltration rates • improved soil water-holding capacity • increased biological activity • increased soil depth • decreased soil bulk density • improved soil structure • improved nutrition • increased yield while maintaining quality.

a slow-release fertiliser so the plant will take up the nutrients needed.”

Vineyard trial As part of the trial, the vineyard (0.5 hectares) was divided into three blocks where three separate treatments were applied. In each treatment, soil moisture, water infiltration, soil depth and the number of micro-organisms in the soil were measured on a monthly basis. Yield and grape quality were measured yearly, and the soil and petioles from each treatment were sent away for analysis each harvest. Treatments included: • Renew Biological Fertilizer (25m3 per ha) at the same product purchase price as synthetic fertiliser calculated from vineyard data prior to the trial • Renew Biological Fertilizer (12.5m3

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post-harvest care per ha) at half the product purchase price of synthetic fertiliser calculated from vineyard data prior to the trial • Synthetic fertiliser program. The whole-of-block experiment was established on undifferentiated soils developed on Quarternary alluvium. Renew was applied under the vineyard row using a spreader. In the treatment where vineyard soil had been treated with Renew at 25m3 per ha, Palmer found a number of trends. In this particular treatment, the soil had: • a greater percentage of organic matter and carbon (a 50% increase in carbon in the top 15cm of soil) • a reduced bulk density • almost double the soil depth measured by the depth at which the penetrometers reading reaches 4000 kilopascals (kPa) • significantly greater water infiltration capacity • improved water holding capacity (Renew applied at the same cost to synthetic fertilisers doubled the soil moisture percentage across the season) • greater available phosphorus, potassium, nitrogen and calcium • a significantly greater number of active micro-organisms • a slightly greater cation exchange capacity and percentage of base saturation. Palmer says despite soil changes leading to a higher yield at Meadowbank vineyard, the quality of the grapes was maintained. “There was no significant difference between treatments for grape Brix, Baumé, pH or titratable acidity and or in vine canopies,” Palmer said. She says consumer demand for greener

alternatives in wine now extends to the vineyard, and is something that vineyard managers should embrace. “Agricultural producers have relied on synthetic fertilisers for nutrition and synthetic pesticides to control diseases and weeds for decades. However, retailers and consumers continue to demand reduced inputs of artificial products because of concerns about the safety of synthetic residues in food and wine and the potential for negative effects on non-target organisms,” Palmer said. There are about 20 wineries across Tasmania currently applying Renew to their vineyards, including Frogmore Creek and Pooley’s Wines. Frogmore Creek director and co-owner Tony Scherer first tried the product in 1999 in an attempt to increase the soil’s water-holding capacity. He says the product has become the foundation of the vineyard’s fertilising program. “It’s well-made, reasonably priced and it’s easy to spread,” Scherer said. “The only limitation is that it’s more difficult to spread – it’s bulkier than a chemical fertiliser – but it’s no more expensive.” He says the benefits relating to soil carbon and nutrients make it a worthwhile product that he would recommend to other growers. “It’s not something that provides instant gratification, it takes time to work, but it’s long-lasting and it works with the root system of the plant – not against it,” he said. “It also helps build up the soil microbial life, which helps reduce incidence of diseases, such as powdery

Fire ruins vintage 2012 at Meadowbank Meadowbank Estate is unlikely to have a winegrape harvest this year, after a bushfire swept through its vineyard in February. The fire burned about 4000 hectares of the Meadowbank property and claimed about 50 sheep on the property, The Mercury reported. Meadowbank vineyard owner Gerald Ellis predicted the losses would be in the hundreds of thousands of dollars, and hoped the vines would bounce back. He said he was grateful to the fire crews who worked tirelessly to keep his family and home safe. The Meadowbank fire threatened townships earlier in the day on Saturday 25 February, prompting authorities to urge residents from Ellendale to Bushy Park to activate their bushfire plans.

mildew and Botrytis.” Palmer hopes to expand research on Renew by converting the grapes into wine for a panel to make an assessment on wine quality.

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April 2012 – Issue 579

Addressing fruit exposure in Granite Belt Chardonnay Ursula Kennedy and Dylan Rhymer

Training & trellis

For the 2011-12 season, an industry extension trial has been running in QLD’s Granite Belt region. This trial, funded by the GWRDC Grass Roots Regional Solutions program, is focussed on the investigation of different canopy management options for manipulating fruit exposure and subsequent effects on fruit

quality. The trial is being conducted on Chardonnay and Shiraz vines in Ballandean Estate’s Bellevue vineyard. These vines are planted in north-south running rows and trained to vertical shoot position (VSP) trellising, facilitating the application of canopy management options, which include full fruitzone leaf plucking, leaf plucking from the eastern side of the canopy, shoot thinning, canopy sprawl and application of white and of black throwover bird netting. The Chardonnay vines have recently been harvested and initial findings are presented here. Between veraison and harvest a number of measures were made on vines and fruit, including leaf areas, yields, visible light and UV radiation in the fruitzone and exposed berry temperatures. At harvest fruit was assessed for a variety of quality factors including total soluble solids (as degrees Baumé), pH, titratable acidity and spectral measures. At the time of writing, wines made from the different treatments were finishing fermentation.

Vine measures Differences were seen in the vine canopy characteristics, resultant of the treatments applied. Leaf removal resulted in a decrease in leaf area per vine and decreases in leaf area to yield ratio, shoot thinning resulted in decreases in shoot number and 25 per cent decreases in yield and leaf area per vine. Vines that were subject to leaf removal were also lower in leaf area and leaf area to yield ratio, vines plucked on the eastern side being 20% and full plucked as much as 40% lower in leaf area compared with non-plucked vines. Shoot thinning and both leaf plucking regimes increased fruitzone percentage of ambient visible light (measured as percentage of ambient photosynthetically active radiation or PAR) on the eastern side of canopies when compared with

control vines, while fully fruit zone leaf plucked vines also showed an increased percentage of ambient PAR on the western side of vines. It was interesting to note that shoot thinned vines also seemed to have similar percentage of ambient PAR to control vines on the western side. Netted vines were similar to control vines with regard to leaf area, yield and visible light in the fruit zone (Figure 1).

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Figure 1. Granite Belt exposure trial Chardonnay % ambient PAR morning eastern canopy side vs afternoon western canopy side. February 2012. April 2012 – Issue 579

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Grapegrower & Winemaker

post harvest care Vines with fruitzones exposed by leaf removal displayed close to ambient values in fruit zone UV radiation while non-leaf plucked vines and bird netted vines showed UV radiation levels as much as 80% lower than ambient. Vines where shoots were permitted to sprawl tended to roll over with canopies rolling to the western side, pushed by prevailing winds. This exposed fruit on the eastern side of the canopies, and also exposed the vertical section of the fruitzone, resulting in the eastern sides of these vines receiving higher loads of ambient light and UV radiation compared to control vines. Berry temperatures were taken in the morning and in the afternoon. As early as 10am on a sunny day when the ambient temperature was 30˚C exposed berries on the eastern side of canopies were measured carrying heat loads of 45˚C and above, while shaded berries were well below this, carrying heat loads as low as 20˚C (Figure 2). Bunches which were more highly exposed and bunches on the eastern sides of vines were visibly more affected by exposure, with berries appearing more severely sunburnt and more shrivelled than fruit protected by foliage. Evidence being collected from current investigations into sunlight and ultra-violet radiation in this region is showing that locally visible light and violet radiation loads are higher in the morning, afternoon cloud cover abating these factors in the afternoon.

Fruit analyses Trial vines were harvested and processed for small-lot wine production, with

56 Grapegrower & Winemaker

Table 1. Granite Belt exposure trial Chardonnay – fruit analyses (settled juice) February 2012. TSS (degrees Baumé)

Control

11.7

3.22

7.5

Total phenolics (AU) 0.4

East pluck

12.1

3.21

7.3

0.9625

Full pluck

12.2

3.24

6.7

0.5625

Shoot thin

11.2

3.19

8.6

0.8875

Sprawl

11.4

3.14

8.2

White net

11.5

3.19

7.6

Black net

11.6

3.11

6.8

Figure 2. Granite Belt exposure trial Chardonnay – exposed berry morning temperatures. February 2012.

Figure 3. Granite Belt exposure trial Chardonnay highly exposed vs shaded fruit analyses. February 2012.

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April 2012 – Issue 579

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The active ingredient also flows into the plant tissue where it inhibits the development of pathogens on both sides of the leaf. And best of all, REVUS is completely rainfast, giving you confidence that your vines are protected no matter what the weather brings. Powerful. Reliable. Reassuring. That’s REVUS.

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grapegrowing analyses carried out on pressed, settled juice. Very little difference was seen in any fruit analysis. Fruit from vines that had leaf removal was slightly elevated in TSS and lower in titratable acidity than fruit from control vines, with these vines and shoot thinned vines also showing slightly higher levels of total phenolics than fruit from control vines. Fruit from bird netted and sprawl vines appeared to be slightly delayed in ripening with regard to TSS, while this fruit was lower in total phenolic concentration (Table 1, page 56). A number of fruit samples, which were also taken from highly exposed and from well-shaded bunches, were also processed and analysed for the fruit quality parameters discussed above. Juice from highly exposed berries was slightly higher in TSS, pH and total phenolics and lower in titratable acidity (Figure 3, page 56).

Discussion and conclusions Previous research has shown exposure of fruit to result in increased TSS and pH and lower titratable acidity, while also increasing concentration of berry phenolic compounds, similar to the findings of this trial. The preliminary findings of this trial indicate that there is

little impact on the measured fruit quality components from canopy management options which altered bunch exposure, however highly exposed fruit in this case tended to be higher in TSS, pH and phenolics and lower in titratable acidity. It can be noted that in a ‘high acid’ year, as has been experienced in the Granite Belt this year, exposing the fruit may help lower the TA and balance the pH/TA ratio of the fruit, as was noted in the full plucked fruit in this trial. Furthermore, the condition of the fruit in this trial was best under the netted vines, which minimised bird damage, the cause of some Botrytis seen in the trial block. Bird netting also offered a certain amount of protection from sun exposure, thus moderating fruit heat loads. This trial is being repeated in a Shiraz block, and we are anticipating interesting results from Shiraz ferments as the impact of exposure on skin composition should be more obvious due to the extractive process of red wine fermentation.

Broad and John Wilkie from DEEDI for loan of equipment, the University of Southern Queensland Centre for Systems Biology for support and students from the University of Southern Queensland Bachelor of Technology (Wine) program for conducting part of the analyses.

Acknowledgements

A. G. Reynolds and J E Vanden Heuvel (2009) Influence of Grapevine Training Systems on Vine Growth and Fruit Composition: A Review. American. Journal of Enology and Viticulture. vol. 60 no. 3 251268.

Thanks to the GWRDC for funding this project as part of the “Grass Roots Regional Solutions” program, Ian

Ursula Kennedy is a lecturer of wine science at the University of Southern Queensland and Dylan Rhymer is winemaker at Ballandean Estate Wines.

Further reading

L. Haselgrove, D. Botting, R. van Heeswijck, P.B. Hoj, P.R Dry, C. Ford and P.G. Iland (2000). Canopy microclimate and berry composition: The effect of bunch exposure on the phenolic composition of Vitis vinifera L cv. Shiraz grape berries. Australian Journal of Grape and Wine Research. Volume 6, Issue 2, pages 141–149, July 2000 S. E. Spayd, J. M. Tarara, D. L. Mee and J. C. Ferguson (2002) Separation of Sunlight and Temperature Effects on the Composition of Vitis vinifera cv. Merlot Berries. American.Journal of Enology and Viticulture. Vol. 53 no. 3 171-182 S M. Bureau, R L. Baumes, and A J. Razungles (2000) Effects of Vine or Bunch Shading on the Glycosylated Flavor Precursors in Grapes of Vitis vinifera L. Cv. Syrah. Journal of Agricultural and Food Chemistry, 48 (4), pp 1290–1297

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www.tuckaway.com.au 58 Grapegrower & Winemaker

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April 2012 – Issue 579

viti-talk

Old tool gets a modern makeover Product review Item: Fence-Line Solutions Wire Strainers Product name: Spring GRIP Strainers Manufacturer: Fence-line Solutions

Ben Rose

Contact details: Fence-Line Solutions, PO Box 301 Wandiligong VIC 3744

HAVING GROWN UP using wire strainers to establish my families vineyard (with six wires per row), it is very interesting to see some modifications to an old concept. I am aware of four different types of wire strainers, being ‘wire walkers’(sometime called multigrips), ‘E type’, ‘cam lock’, and pole and chain (not seen in Australia but used in some former Soviet countries). The wire walkers (Figure 1) were made by ‘Donald’ and did not have a chain. They used the wire itself and two grips that crawl along the wire with one holding the wire and the other moving, then the second holding the wire and the other moving as the handle is worked to and fro. Originally used for low tensile wires of heavy gauge, the grips can damage the galvanised coatings of modern wires. These strainers are hard to use on end assemblies as you have to tie off a loop on the post which becomes the static end, and then when the wire is taut the two ends of the wire are tied together or a crimp can be used. They are very good for mid row wire joining. The ‘E type’ (Figure 2, page 60) also made by ‘Donald’, use a chain rather than the wire as in the ‘wire walkers’, but the grip to the wire is made by two interlocked hooks. There is virtually no damage to the wire coating. The chain end also has these hooks, and the chain can be wrapped around the end assembly and hooked back on itself. The chain claws are cast iron and lock onto the chain well. They are well suited to both end assembly and mid-row wire straining. The ‘cam lock’ (Figure 3, page 60) is the most popular wire strainer and probably what many in this industry are using. They use a loose cam to grip the wire and a chain to tension the wire. The chain end is also a cam, which can be used to attach the chain to the post. The strainers pictured in figure 3 have cast iron chain claws, but many of the more recent models use pressed or folded steel. The cam does dent the wire, but there is

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little damage to wire coatings. These strainers are suitable for both end assembly and mid-row tensioning. The forth type of strainer (Figure 4, page 60) uses a short length of chain (about 30cm) with a cam on one end and steel pole about 1.5 metres on the other. The chain is attached to the wire and the pole is levered from the end post to create the wire tension. This is a two-person operation and is only suited to end

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Grapegrower & Winemaker

viti-talk Pole

Figure 2: Donald “E type”

End Post Figure 5: Fence-Line Solutions Spring Grip Strainers

Wire Figure 4: Hayes ‘cam lock’

Figure 3: Hayes ‘cam lock’

assembly work. The red arrow in figure 4 indicates the direction of movement of the pole. The Fence-Line Solutions Spring Grip Strainers (Figures 5-7) are basically a set of cam lock strainers with some modern additions. They are laser cut steel rather than pressed or cast and their finish is very good. High tension (in fact very high tension) button head socket screws have been used in part of the cam assembly, while remaining bolts have Phillips heads and are unmarked in regard to their tensile strength. Attachment to the wire is simple: instead of being a loose cam lock, the cam is spring loaded which makes attaching these to the wire easy and they stay attached while you attach the other end to either post or wire. The spring is exposed and appears strong. The chain end also has a spring loaded cam, and it also has a chain hook, which means the cam mechanism does not get bent around the post or damaged as the chain passes through it. Personally, I really like the spring loaded cam and the chain hook, these two pieces of engineering take the frustration out of straining wires (and

would be particularly useful on those cold winter mornings when most trellis maintenance occurs. The chain is rather long, in fact possibly long enough to tow out a bogged tractor. I have very rarely found the chain on the older strainers to be too short, except on possibly the longest strains. In the trial the long chain got in the way and fell on the ground, and I thought it could have been half the length. The chain claws have hidden springs (rather than the exposed springs that always break on the older models) and don’t grip the chain as well as the older cast iron claws. However, when compared with the newer pressed claws on some models there is little difference. The final improvement that these strainers incorporate is a tensioning gauge to ensure that the wires are not over or under their rate tension. This is a good idea and maintains consistency in the wire tension. Experienced operators can feel the correct tension in the wire, however, if only a few repairs are made each year, it does not take long to lose “the feel”. The gauge is easy to see, however there is an etched diagram to indicate the position of the tension device and the corresponding tension and on the test strainers this was upside down for the operator (see photo). I really like these strainers for their new additions to a tried and tested device. They simplify the process of straining

Figure 6: Chain cam and hook

Figure 7: Tension gauge (up-side-down for the operator)

wires by removing the frustration of the cams falling off the wires, and reducing the variation in tension applied to each wire. Ben Rose is the principal advisor of Performance Viticulture. He established Performance Viticulture in 1997 and is also a certified practicing valuer specialising in wine industry assets. Viti-talk is a bimonthly column, written exclusively for Grapegrower & Winemaker. If you have a question for Ben or a new product for an independent review you can contact him on Ph: 0418 836 773 or email: ben@performanceviticulture.com.au

Drive more traffic to your website with Australia’s LARGEST circulating wine industry enewsletter. Contact Nicole Evans on 08 8369 9500. Over 10,000 subscribers and increasing daily 60 Grapegrower & Winemaker

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April 2012 – Issue 579

products & services

Planning to prevent trellis damage Planning a vineyard not only means trying to get ideal yields but it also takes into consideration the ongoing workload from pruning and spraying through to minimising ongoing maintenance, mostly due to mechanisation. Most of the time, machine damage in vineyards is because the vineyard has not been designed with mechanisation in mind. Unfortunately, trellis damage can eat into the budget considering the cost of repairing broken posts and wires, as well as additional costs involved in machine down time or increased contracting costs due to inefficient turning space or accessibility. There are a number of considerations that could spare some of these headaches if you are planning a new vineyard or looking to improve on your existing one. Here are just some considerations: • carefully research your industries latest best practices and take into account vine and post spacing requirements • look around your district to see what is working and what is not. Going with a cheap alternative could cost you money in maintenance time or lack of return through lower crop yields later on • ensure there is enough space around headlands and tight areas within the layout of the property to ensure it is not going to cost you more fuel, time and money due to the harvester taking three attempts to get into the next row • use wire and components that are

good quality. These components have to move and flex with different seasons and are often impacted by pruning shears and machines so it pays to get it right. ViceBite® fence brackets are an example of product innovation within vineyards, which have taken up the challenge to improve timber post life and reduce maintenance in the vineyard. The product design does not affect the natural strength of the timber posts as it doesn’t cut across the grain of the timber or open the timber up to the elements through notching, drilling or cutting the post. Timber preservatives only penetrate the timber up to approximately 10mm

and the ViceBite product has been designed around this fact so the teeth that support the bracket don’t dig deeper. ViceBite is an Australian made and owned product that was designed by Mildura grower Rodney Trigg, who initially wanted something for his mechanised dried fruit property. Although it was developed with vineyards in mind it is now being successfully sold overseas and across Australia for the general fencing market, due its simplicity and effectiveness. ViceBite is available through local farm suppliers and online, so if you would like to learn more contact their office at www.ViceBite.com.au.

An example where Vicebite has been used in Rodney’s dried fruit property. Video demonstrations are available at: www.vicebite.com.au.

Extending the life of vineyard posts Most vineyards use treated pine posts as their preferred material to espalier their grapevines. Pine is a natural product that is susceptible to warping, twisting, splitting and creating sharp edges and, unfortunately, the current treatment process of pine does not prevent any of this from happening. Most literature suggests the treatment process is most effective within the first 25mm of the post, leaving the centre of the post susceptible to rotting if in contact with water. This means cracked or broken posts are vulnerable to splitting and rotting. A rough sawn top end of a pine post can also create corrugations where water will sit on the top of the post. This water will eventually penetrate through to the core of the post, also resulting in rotting and splitting of the post. To overcome this problem some vineyards have tried homemade caps or even used dinner plates to stop the water penetrating deep into their posts, April 2012 – Issue 579

or to protect their netting from ripping as they get caught while being pulled over the posts. Most home-made methods are generally unsuccessful. There is a lot of time and money invested so why not protect your investment long-term? A brand new Australian owned and designed product is now available in Australia and New Zealand called Aussie Post Caps (APC). How do they work? APC are installed by a single 65mm galvanised clout through the centre of the cap, which has a plastic sheaf to create a seal around the clout. It also has an internal lug, which stops the dome from collapsing when the clout is applied. The single clout also allows the cap to spin if needed during the netting process. This helps the nets to travel over the posts without any snagging or tearing. APC have designed and manufactured a round cap specially designed to protect the post from rainwater, which stops the post from splitting and rotting from the www.winebiz.com.au

inside out. It is also ideal for vineyards that net, allowing the netting to easily and smoothly glide over the top of each post without catching onto splintered edges. These post caps are designed with a dome top for water run off and a 40mm skirt that runs around the top edge of the post to cover the rough edges of a post. APC are made from durable polyethylene and 10 per cent recycled plastic. They are UV protected and are designed to withstand harsh Australian conditions. APC also come in a range of colours. Who are APC? APC is a Melbourne-based business located in the city’s outer northern suburbs. It is owned by two mates that both believe in Australian made and Australian owned products. This is why they opt to manufacture their product locally in Bayswater, Victoria. For orders or further information please contact Callum Donoghue 0414932051 or Matt Collins 0408599938 or email aussiepostcaps@hotmail.com. Grapegrower & Winemaker

products & services

Revolution begins in the vineyard Kath Gannaway

WINEMAKERS IN THE Yarra Valley have described Pellenc’s new Selectiv’ Process harvester as a paradigm shift for industry. The revolutionary feature is the on-board de-stemmer and sorter, which removes a very high percentage of petioles and matter other than grapes (MOG) as it picks. The family-owned Helen’s Hill Estate is one of only three wineries in Victoria, and the only one in the Yarra Valley to have bought the French-manufactured harvester. Co-owner and director Dr Andrew McIntosh says the machine is the future of the high-end wine production in the valley, and throughout the wine regions of Australia. It could be argued, McIntosh said, that ‘harvester’ is a title which sells the Selectiv’ short. As the freshly-picked berries pour from the Selectiv’ into the tubs at the end of a run, McIntosh points to the quality of the fruit and absence of MOG, along with the indisputable labour savings, as the ultimate test of what it can deliver. However, he says, what makes it so broadly attractive is its multi-function capabilities, which include pre-pruning, spraying, trimming, under-vine weeding, wire-lifting and shoot removal. Coldstream Hills contracted the services of the Selectiv’ and senior winemaker Andrew Fleming was also impressed with the results. “From what I’ve seen so far it delivers everything it’s intended to do,” Fleming said. “The fruit is very clean and sound; that’s a real positive for how we do things in the winery in so much as it saves us a couple of processes, including having to remove MOG,” he said. “Ultimately we want to do some trials with the wines we make but I would anticipate it’s going to be good.” Adding further weight to their first impressions of the Selectiv’, McIntosh and Fleming pointed to additional environmental and cost benefits. “It has a recovery unit for spraying, which cuts costs by about 35 per cent and a highly efficient, low-sound motor, which uses about one-third less in fuel,” McIntosh said. “When you’re talking about spray drift, it’s not just money being pumped out, it’s about the effect on the neighbours, so this has benefits there as well,” Fleming added. Another plus is Selectiv’ can be pushed into action if wet weather threatens the grapes.

The Pelenc Selectiv’ Process harvester at Helen’s Hill Estate in Coldstream.

“If rain’s coming in we can say ‘let’s get it all off’ and to the 25 tonnes we could get with handpicking, we can get 75-100t in a day with this,” McIntosh said. “So, it has major implications for risk management, productivity and cost savings.”

Low risk but landholders urged to remain alert Central Queensland residents are being urged to keep an eye out for locusts amid concerns that recent weather conditions could lead to swarms in coming months. Biosecurity Queensland principal officer Duncan Swan says the Central Highlands region is at risk of locust swarms forming after weather conditions provided ideal for locust activity in the region. He says landholders should closely monitor their properties this season and report any large locust populations to

62 Grapegrower & Winemaker

Biosecurity Queensland of the Australian Plague Locust Commission (Ph: 13 25 23). Adult locusts are unlikely to migrate into South Australia, as had occurred in 2010. Very few sightings of locusts were recorded in South Australia in late February and early March, according to Biosecurity SA. Locusts have remained in the general area of the Mid North, after fledging in the Georgetown/Narridy to Koolunga/ Yacka to Spalding/Washpool districts. www.winebiz.com.au

Some have also spread to the Gladstone and Laura districts. Egg-laying from the current population, if it occurs, is predicted to be sporadic and highly localised. Locust population density also remained low in NSW throughout February. To report a sighting, contact the Australian Plague Locust Commission on: 1800 635 962

April 2012 – Issue 579

wrdc

April 2012

GRAPE AND WINE RESEARCH AND DEVELOPMENT CORPORATION

Newsletter of the GWRDC. Published bi-monthly

Research demonstrates more options in post-harvest vine management As vintage draws to a close in most regions, grapegrowers can start catching up on much-needed sleep and turn their minds to post-harvest vineyard management, including vine nutrition and irrigation regimes. The latest research is emphasising the importance of the post-harvest period in relation to carbohydrate reserve accumulation and nutrient reserve storage. “Research has shown that carbohydrate and nutrient reserves status of vines at harvest can vary between seasons, and how we manage grapevines in the post-harvest period can influence vigour, yield and fruit quality come next spring and summer,” said National Wine and Grape Industry Centre research viticulturist Dr Jason Smith, who is based at the Wagga Wagga campus of Charles Sturt University. “We have observed that different weather conditions or management practices contribute to this variation, and where factors such as extended high temperatures reduce carbohydrate availability, or heavy crop loads delay berry ripening, it’s likely that reserve replenishment will also be delayed.” Smith said most growers were aware of the importance of the post-harvest period, and the general approach of maintaining reasonable canopy function is one he would recommend for growers who aim to increase carbohydrate reserve storage. This includes pest and disease control, as well as adequate nutrition and irrigation to maintain leaf health and photosynthesis. “In vineyard surveys we have seen a depletion of carbohydrate reserves following successive seasons of drought, but one of the specific questions that came up during these drier seasons was the impact of water stress after harvest,” he said. “In our trial work we found grapevines can tolerate dry post-harvest periods

over one or two seasons, but a dry soil profile over winter or leading into budbreak is something that should be avoided. In these situations we have seen weaker spring shoot growth and delayed ripening due to a reduction in canopy size in relation to yield. “There are other questions relating to the best timing of post-harvest fertiliser applications, so the factsheet will include new information about the seasonal pattern of fine root dynamics in hot climates and also the effectiveness of foliar applied fertiliser for increasing nitrogen reserve storage during the postharvest period.” Given the range of factors that can potentially impact on carbohydrate and nutrient reserves storage, Smith said the next step for this research was to develop a protocol for growers to directly measure the reserve status of their grapevines. “We have just developed a rapid method for measuring starch and nitrogen concentrations in wood and root samples based on infrared spectroscopy, and are presently looking at options to determine the value of such a test for the management of commercial vineyards,”

he said. “This could be as simple as a one-off test in winter that could be done at the same time as bud fruitfulness assessments, through to sampling at key growth stages. “A measurement shortly after harvest for example could be used to determine if adequate carbohydrate or nitrogen reserves had already been accumulated for that season.” Smith is currently writing a GWRDC factsheet on post-harvest care of vines, an update on work released in 2008 as part of the Water and Vine workshops series. “The new factsheet will discuss the impact of management practices and environmental conditions on post-harvest reserve accumulation, and provide growers with a guide to estimate the likely importance of the post-harvest period for their vineyards,” Smith said. This factsheet will be available on the GWRDC website shortly and will be sent to Innovators’ Network members. To join the Innovators’ Network, visit the GWRDC website at: www.gwrdc.com.au and follow the links.

wrdc GRAPE AND WINE RESEARCH AND DEVELOPMENT CORPORATION

Research explores mouth-feel in white wines New findings on the role phenolics play on white wine character and style could help winemakers achieve the desired palate texture from their wines. A team of scientists at the Australian Wine Research Institute have investigated the phenolic compounds responsible for the different phenolic tastes and textures – such as astringency, bitterness, viscosity, oiliness and hotness – in white wine. Research scientist Richard Gawel, who has been involved in the project from its inception, says the research is important

AWRI research scientist Richard Gawel.

because texture plays a major role in defining wine styles – particularly in the case of white wines. “Pinot Gris and Pinot Grigio is a good example – it’s the same variety with similar flavour characteristics, but the styles are defined primarily by texture,” Gawel said. The research team also explored the practices winemakers could use to create different phenolic styles, as well as the role played by pH and alcohol on phenolic taste and texture. As part of the research, Gawel and his colleagues made experimental wines with a range of phenolic characters to explore how composition influenced sensory ratings and to isolate phenolic compounds. They isolated the two most dominant phenolic molecules in Australian white wines – caftaric acid and 2-S glutathionyl caftaric acid (also known as Grape Reaction Production, or GRP) – and subjected them to formal sensory profiling. “We selected these two phenolics from the hundreds we know exist in white wine based on their abundance, but also because the relative proportions of the two can be manipulated by winemaking practices,” Gawel explained. Some of the key findings include: • Lower pH enhanced astringency. Caftaric acid and GRP were not particularly associated with astringency – a finding that contradicts the widely held assumption that phenolics are the main cause of astringency in white wines. • ‘Hotness’ was mostly associated with alcohol concentration, not aggregated phenolic measurements or caftaric acid. In a somewhat counterintuitive

result, hotness was suppressed by the presence of caftaric acid. This shows that, in the absence of other variations to matrix composition, phenolics may allow winemakers to ‘dial down’ white wine hotness in some circumstances. • Lower pH gave lower viscosity, while GRP provided a slight increase in palate ‘oiliness’. • Bitterness was, however, generally shown to be positively associated with phenolics. However, neither GRP nor caftaric acid were bitter. This means some other phenolic or phenolic class in white wine is, but their identity remains unknown. However, various correlative studies consistently implicated flavanol and glycosylated flavonols as candidates for these bitter tasting compounds. Observations from the experiments – which were conducted over two years using new and older winemaking methods – show that increased maceration, either by skin contact or pressings, increases phenolics in the wines. But despite the increase in phenolic levels, astringency decreased with maceration levels while viscosity increased – a result most likely due to the pH increase as caused by potassium extraction from the skins. “The desired phenolic outcome of any given winemaking treatment needs to be carefully considered from the perspective of the concomitant effect of pH on astringency and viscosity,” Gawel said of the finding. He says further opportunities for research into the molecular basis for phenolic taste exist, particularly with regard to bitterness.

GWRDC grant to allow scientist to sequence rootstock genome A research scientist from The University of Adelaide will map the genetic make-up of a key grapevine rootstock after he was awarded a $22,000 wine science award. Dr Matthew Gilliham was last month announced the winner of the Viticulture and Oenology 2012 Science and Innovation Award for Young People in Agriculture, Fisheries and Forestry.

The $22,000 grant, sponsored by the Grape and Wine Research and Development Corporation (GWRDC), will allow Dr Gilliham to carry out research that will help identify genetic markers for traits such as drought, salinity, root pathogen and acid soil tolerance. Over the next 12 months, Dr Gilliham will compare the 140-Ruggeri rootstock’s genetic sequence with the

genome of the common grapevine Vitis vinifera. It is hoped that sequencing will provide the important first steps in linking useful traits to genes – an approach that will accelerate breeding for key rootstock attributes and help support a competitive Australian wine sector.

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Factsheets explain covercrop options Chris Penfold, who has spent the past 10 years investigating sustainable vineyard floor management practices, has put his experience to paper and compiled a range of covercrop factsheets for the GWRDC. The factsheets address the main issues involved with covercropping and their impact on vineyard floor management. The factsheets deal with the following topics: • covercrops and vine nutrition • native covercrops in viticulture • covercrop seeding guidelines • covercrops and weed suppression • covercrops and plant parasitic nematodes • covercrops and vineyard floor temperature.

Covercrops and water use Penfold has also set up a website (www.covercropfinder.com.au) which has been designed to help grapegrowers find a covercrop that best suits the region and soil type of their individual vineyards. The website was built with the support of the GWRDC and The University of Adelaide. Penfold, a researcher at The University of Adelaide, said interest in vineyard floor management practices across Australia had taken off in the past few years. “Research in this area has really grown in the past 10 years or so and, as a result, we have a lot of new information that can help match the benefits of covercrops

to specific regions and types of vineyard floor,” Penfold said. “For example, recent work I’ve done has showed there are tremendous benefits to using the native saltbush in dry grapegrowing regions. It provides great suppression of weeds such as caltrop and as shown by Linda Thomson from the University of Melbourne, it encourages important biodiversity in vineyards.” In wetter regions, the choices for suitable covercrops are greater, with exotic and native species both providing useful functions. As more covercrop options are trialled, so too are new methods of management, providing information about its effects on vine nutrition, rootzones and vineyard pest levels. Penfold said conventional covercrop management advocated mowing or slashing, but where possible he preferred rolling.

“Slashing reduces the covercrop into small fragments which break down quickly through the combination of warmth and moisture after a summer rain event. They then offer little protection to the soil, whereas a rolled covercrop maintains its integrity for much longer.” he said. “Rolling the grasses in the mid-rows is cheap, and with heavy covercrops a dense mulch is left on the ground to protect the soil and reduce soil temperatures.” Rollers can also be made quite easily in most farm workshops, according to Penfold, who lends his homemade roller to growers wishing to try the system in their own vineyards. “We still have a lot to learn in this field, particularly when it comes to getting the most out of covercrops for the benefit of the whole vineyard and in areas of biodiversity,” Penfold said. “There’s also some interesting work coming out of New Zealand on some of the prolific flowering exotic covercrops such as buckwheat and alyssum. But these really only suit some of the wetter regions.” Seed costs, particularly with native grasses, can be off-putting for some growers, but Penfold said establishing a grass nursery or self-seeding can help keep long-term costs down. The factsheets are available via the GWRDC website: www.gwrdc.com.au.

Vitisnip Pruning to protect vines from eutypa dieback Since 2003, SARDI plant pathologist Dr Mark Sosnowski has carried out research on the management of eutypa dieback disease in grapevines. Sosnowski, who features as this month’s Researcher in Profile, shares his top five tips for managing the harmful disease, below: • Avoid pruning in wet weather and, where possible, delay pruning until late winter when wound healing is more rapid. Mechanical pre-pruning in early winter to leave long spurs followed by

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hand-pruning in late winter (double pruning) may also reduce infection. • Remove dead wood from grapevines and alternative hosts – such as apricots and willows – in and around the vineyard to reduce the inoculum level. • Protect pruning wounds from infection by applying either paints, pastes, fungicides or a bio-control. • In spring, monitor for stunted and yellowing shoots with cupped leaves and dead margins. As the disease

progresses, spur positions and cordons die back and sunken dead areas without bark (cankers) develop on cordons and trunks. • Remove infected cordons and trunks, cutting a further 10cm below visible stained wood to ensure all infected wood is removed. Protect large wounds and retrain trunks and cordons from water shoots. For more information on how to manage eutypa dieback, visit: www.sardi.sa.gov.au/eutypa_dieback.

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People in Research Mark Sosnowski, SARDI Drastic pruning wipes out exotic pathogen Developing eradication strategies for exotic grapevine diseases, while minimising the economic impact of returning an affected vineyard to its previous production, might sound ambitious. Current eradication strategies require the complete removal of infected vines, in the case of an outbreak of an exotic disease, and it can take many years to regrow vines to their previous quality. Since 2006, Dr Mark Sosnowski of the South Australian Research and Development Institute has made it his research mission to find more efficient ways of responding to such attacks – and with some progress. Working with the Cooperative Research Centre for National Plant Biosecurity (CRCNPB), Sosnowski has developed a drastic pruning method that successfully eradicates the fungal disease black rot. Sosnowski, who presented his findings at the Crush 2011 Symposium in Adelaide last year, says the strategy offers an efficient and effective solution to potential disease threats. “This disease causes significant yield and quality losses and requires expensive management programs for control in countries where it is endemic,” Sosnowski said. As part of the eradication strategy,

Ground Floor, Industry House cnr Botanic & Hackney Roads Adelaide SA 5000 PO Box 610, Kent Town SA 5071 Telephone (08) 8273 0500 Facsimile (08) 8373 6608 Email gwrdc@gwrdc.com.au Website www.gwrdc.com.au Disclaimer: The Grape and Wine Research and Development Corporation in publishing this newsletter is engaged in disseminating information, not rendering professional advice or services. The GWRDC expressly disclaims any form of liability to any person in respect of anything done or omitted to be done that is based on the whole or any part of the contents of this newsletter.

vines were cut off at the crown with a chainsaw and the excised material, along with debris raked from the vineyard floor, was placed in an excavated pit to be burned and buried. “Black rot infects fruit, leaves and green shoots of grapevines, and so by removing these parts of the vine, leaving behind the trunk only, the disease is eliminated,” Sosnowski explained. “Then, by training up new water shoots, cordons can be re-established and the vine returned to full production and similar quality in just a few years, since fruit and wine quality is related to the developed root system in mature vines.” Sosnowski’s interest in research has not been limited to eradication strategies for exotic plant pathogen attacks. After graduating with a Bachelor of Agricultural Science from The University of Adelaide in 1997, Sosnowski started a career with SARDI. In 2002, he completed a PhD on the epidemiology and management of blackleg disease of canola, which was followed by post-doctoral research on eutypa dieback disease management in grapevines – an interest he maintains today (see page 65 for his tips on managing the disease through pruning techniques). His main focus recently has been his research on the eradication of grapevine pathogens. In developing the eradicant strategy, Sosnowski began evaluating the pruning method on an Australian vineyard which had been inoculated with black spot – a disease endemic to Australia that has a similar biology and epidemiology to black rot. Infecting fruit, leaves and shoots of grapevines; overwintering in infected debris on and beneath the vines; and spread via rain splash, are traits common to both diseases. The success of the strategy was

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SARDI plant pathologist Mark Sosnowski has developed a drastic pruning method that eradicates the exotic grapevine disease, black rot.

realised in 2010, following two years of evaluation and assessment of the pruning method on a black rot infected vineyard in New York State, USA. “No black rot symptoms were detected on vines treated with the protocol, whereas leaf and fruit infections developed on untreated control vines,” Sosnowski said. “The results confirmed the efficacy of the drastic pruning protocol as a means of successfully eradicating black rot from grapevines and the protocol has been published in the international peerreviewed journal Plant Pathology.” But despite the success of the strategy, the pruning method does have its limitations. “The strategy can be labourintensive and costly for regular disease management, although it is routinely used for managing grapevine trunk disease,” Sosnowski said. “However, for this purpose, it would be applied in the case of an incursion of black rot, or potentially for other exotic diseases such as black rot, angular scorch disease, rotbrenner, grapevine rust or bacterial blight.” The next phase of Sosnowski’s research will be to validate the drastic pruning method for these exotic grapevine diseases. Sosnowski will present this research again in May at the CRCNPB Science Exchange 2012 in Perth.

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winemaking Wine regions dig deep to promote unique identity Soils help flavour regional branding Danielle Costley

Industry is recognising that regional and sub-regional geographical indicators (GIs) are powerful marketing tools, prompting wine regions to look for innovative ways to set themselves apart from their counterparts. Appellation schemes, sub-regional branding campaigns and wine challenges are just some of the initiatives regions are using to establish individuality in such a competitive climate. New Zealand has done this quite successfully over the years. The Marlborough and Hawke’s Bay regions are now strong brands and, while promoting their regionality and respective wine styles, they have strengthened rather than diminished the international recognition of this country. The Upper North Island Wine Challenge was initiated two years ago as part of the Wine Science Program at The University of Auckland. This competition – which saw 100 wines entered from Northland, Auckland, Waikato and Bay of Plenty – was initiated from a perceived need for the region and its sub-regions to be recognised as making a unique and historical contribution to the NZ wine industry. “We believe this collaborative

Gimblett Gravels logo that features on their bottles as part of the region’s appellation scheme. April 2012 – Issue 579

approach between The University of Auckland and regional winegrowers is unique, and our point of difference will ultimately focus on the ability to identify the sub-regional differences between wines and the consequent challenges for winegrowers and winemakers,” said Randy Weaver, head of the University’s Wine Science Program. “The competition provides feedback to winemakers and, of course, celebrates their successes. But it also gives winemakers a standard sensory evaluation, technical notes, and the judges provide detailed comments on each of the wines in the competition.” This data is collected for detailed analysis at the university, with a longterm goal of gaining valuable insight into regional and sub-regional differences. This information will then be fed back to the industry. In the Hawke’s Bay region of NZ’s eastern North Island, winemakers are no longer content to sit in the shadow of the Marlborough Sauvignon Blanc, and have introduced a brand, ‘Gimblett Gravels’, to identify itself separately when promoting NZ wines. The Gimblett Gravels appellation, covering 800 hectares, is strictly

determined by a tightly specified soil type that is laid down by the old Ngaruroro River. According to Hawke’s Bay Wine Growers Association executive officer, Lyn Bevin, other sub-regional groups are beginning to venture down this path and more will formalise their sub-regional appellations or GIs this year. “Sub-regional identities add to the flavour and depth of a regional story and will always have a part to play in the market,” Bevin said. “The danger is when sub-regions promote to the exclusivity of the umbrella region and each other, ultimately confusing the consumer. This undermines the very reason for expanding a regional wine story. “It can also dilute a regional message before the regional message is fully developed, understood and accepted. With a small number of producers in the region, this can divide resources, activity and collaboration.”

Mudgee In Australia, Mudgee winemakers recently conducted a survey, commissioned by the Mudgee Wine Grape Growers Association and New

Mudgee association is looking into establishing a Mudgee appellation, which will be displayed on bottles that meet the appellation criteria. www.winebiz.com.au

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winemaking South Wales Trade and Investment, to look at the regional brand potential. Undertaken by Dragoman Consulting, the survey found that the region would greatly benefit from an appellation and identified what direction the scheme should take to improve the region’s marketing. Consumers and producers believe an appellation will provide a point of difference and a reason to reappraise Mudgee wines. Based on these findings, the Mudgee association is working on behalf of the wine region to research and institute a Mudgee appellation, which will be displayed on bottles that meet the appellation criteria. This stamp of approval is designed to guarantee the quality of Mudgee wines and their ties to local vines. According to Huntington Estate winemaker, Tim Stevens, the time is right for a Mudgee appellation to re-emerge, with the two-fold purpose of inspiring high standards in local winemaking and better promoting the Mudgee wine region. “The key messages from the survey revealed that Mudgee was ‘hiding our light under a bushel’ and that while the region had great wines, the quality overall was inconsistent,” Stevens said. “Now that winemakers have a clear picture of what the appellation should achieve, we will seek funding and design the requirements of the appellation scheme.”

Barossa In a bid to showcase and understand the variations in the sub-regional characteristics of the Barossa Valley, the Barossa Grape and Wine Association (BGWA) has for the second consecutive year presented its new range of ‘Chapter Tastings’ to an exclusive trade audience in Hong Kong. The wines featured at the tasting were all single vineyard Shiraz drawn from the 2006 vintage.

The focus on terroir is the essence of these tastings, which provide the association with an opportunity to share insight and wines themed on ‘Barossa Grounds’ – the tapestry of original parishes that comprise the region’s diverse expression of Shiraz. Designed to assess similarities and differences in flavours and textures, Barossa Grounds is one of seven Chapter Tastings that form the basis of the region’s marketing and communications strategy, comprising: Old Vines; Rare and Distinguished; Shiraz as our Hero; Generations; Barossa Discovery and Barossa Flavours. According to BGWA’s marketing and communications manager, James March, the Hong Kong trade audience has been very responsive to regional education and Australia’s search for unique expression of place. “Barossa Grounds is our own line of enquiry around what makes up the Barossa expression, and to explore this idea with our international audience seems a very honest and open exchange,” he said. “It is less about arriving at a particular conclusion, and much more about sharing the journey with our markets. “As we undertake this fascinating journey, it is our aim to understand potential sub-regionality within the Barossa, not simply to create defined bordered areas throughout.”

McLaren Vale A few years back, McLaren Vale’s ‘Scarce Earth’ project was launched to better understand the unique natural diversity of the region and promote its best single vineyard Shiraz wines, contrasted by the sub-regions and soil geology that they come from. With 19 individual districts being identified within McLaren Vale, based on geological, soil, climate and topographical indicators, the Scarce Earth project aims

to better understand the unique natural diversity of this vast region. A panel of local winemakers and independent experts assess each wine from the sub-regions to ensure the site is expressed in the glass and the wine is free of overt winemaking influences. Once it receives a tick of approval for participation in the project, the wine will feature a unique Scarce Earth neck label. This marketing idea is fast garnering a loyal band of followers and the annual tasting event for the Scarce Earth project is growing in popularity as wine enthusiasts debate and taste the diverse and ancient soils of the sub-regions. “What is clear is that there are no good or bad districts; just differences between them. How grapes are grown and winemaking techniques used have a major influence in wine quality,” said Stacey Richardson, McLaren Vale Grape Wine and Tourism Association. “Over time, Scarce Earth will be an invaluable resource for local winemakers and grapegrowers as they strive to gain an unparalleled understanding of Australia’s most significant variety.”

Canberra Interestingly, while many wine regions are working to promote their individuality as a region, the Canberra District Vignerons’ Association is doing quite the opposite. According to the association’s Chris Carpenter, its marketing efforts are being grouped under the branding of ‘Liquid Geography’. “This is our way of indicating that wine, in Canberra, forms a great indicator of soil, climate, altitude and location. This as an embracement of the benefits of our sub-regions in holding them all within the Canberra District umbrella, without trying to market Canberra as one uniform, consistent wine producing region,” he said.

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April 2012 – Issue 579

Laccase and rot: Is it there or is it not? Adrian Coulter

WEATHER CONDITIONS OVER much of the eastern half of Australia during the 2011 growing season were conducive for the growth of the mould Botrytis cinerea. Many winemakers who usually don’t need to worry about Botrytis found themselves processing fruit that had been infected with the mould. It is probably not surprising then, that one in every five queries taken by the AWRI’s winemaking and extension services (WES) team – which provides levy-funded winemaking technical advice and assistance to Australia’s grapegrowers and winemakers – was related in some way to the presence of Botrytis and, in particular, laccase – the oxidative enzyme it produces. Apart from seeking advice on processing Botrytis-infected fruit and winemaking strategies to reduce the negative effects of laccase, many of these queries related to methods of testing laccase activity and interpretation of test results on both wine and juice.

Testing for laccase activity Laccase is a soluble, extra-cellular enzyme secreted into grape berries by Botrytis cinerea, and is always present in Botrytis rot-affected must (Somers 1983). Consequently, juices and wines made from Botrytis-affected fruit should be tested for laccase activity. The measurement of laccase activity has been conducted traditionally using commercially-available test kits based on the oxidation of the phenolic substrate syringaldazine, which produces a pink/purple-coloured oxidation product. However, a qualitative ‘overnight test’ can also be performed to give an indication of the laccase activity, whereby a portion of sample is left in contact with air for 24 hours. The exposed portion is then compared with a ‘control’ portion of the wine: if there is laccase activity, the colour of the exposed portion will have deteriorated and there may be an iridescent film on the surface. Discussions with winery staff last year revealed that various versions of this qualitative method were used. For example, in one method a control sample (used to compare with the test sample for any colour change) is placed in a refrigerator in order to slow down the rates of the oxidative reactions. In another method, a large amount of sulfur dioxide (SO2) is added to the control sample to inhibit oxidation, while in yet another method, both the test sample and the control sample receive a small addition of SO2, but the control sample is placed in the fridge. The important thing to remember is that a wine containing a high level of laccase activity, and in the absence of SO2, will rapidly go brown upon exposure to air. While SO2 at the typical levels used in winemaking does not stop laccase activity in the way it stops tyrosinase activity (tyrosinase is the polyphenoloxidase enzyme naturally present in grapes), it can slow down the development of brown colour (RibéreauGayon et al. 2006a). Consequently, when low levels of laccase activity are present in a wine, it might take longer than overnight for significant oxidative browning to be observable. Somers (1983) recommended the following ‘overnight’ method: “Where laccase activity is present, exposure of a shallow depth of clarified wine (1-2cm) in a beaker at warm temperatures (25-30°C) will lead to oxidative breakdown within 24 hours; no visible change will occur in the control sample retained in a sealed flask without ullage space.” April 2012 – Issue 579

Below are discussions of the main queries received by the AWRI WES team relating to laccase testing:

Increase in laccase activity measured after fermentation There were concerns that laccase test kits might have underestimated the laccase activity in juice. In some cases, test results for wines where either: no; or low activity was detected at the juice stage; or it gave higher results when tested at the wine stage. All of these situations were associated with red wines and juices. This was also observed during the 1999 vintage and an experiment was conducted at the AWRI in order to investigate. The results of this experiment showed the laccase activity of a heavily macerated portion of grapes was higher than that of a gently pressed portion of the grapes. In addition, the laccase activities of both the gently pressed and heavily macerated samples increased after fermentation (Coulter 1999). It appears that laccase is formed by Botrytis in order to inactivate defence mechanisms produced by the host, which in the case of grapevines is phenolic material (Marbach et al. 1984). Given the largest percentage of phenolic material is found in the skins of red grapes, this is where the largest percentage of laccase will be found. Hence, one would expect a higher concentration of laccase to be extracted from the skins

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winemaking During fermentation, anthocyanins and other phenolic material are extracted from the skins, giving higher concentrations of these materials in the wine. It might be possible that laccase bound to anthocyanins could be released as the anthocyanins become involved in pigmentation and polymerisation reactions. This would result in a higher laccase activity level measured in the finished wine. Therefore, it is essential to re-test wines after fermentation, even if a negative result is obtained at the juice stage.

of heavily macerated grape samples than gently pressed samples, and hence a higher laccase activity measured. With regard to the increase in measured activity after fermentation, this too could be due to the further extraction of laccase from the skins during fermentation. However, it is suspected that laccase– anthocyanin binding is also involved. Laccase is a protein (being an enzyme), and proteins can be neutral, or positive or negatively charged, depending on the pH and isoelectric point (pI) of the protein. Most proteins in wine are positively charged, however the low pI (2.5) of laccase means it will be negatively charged in wine (Ribéreau-Gayon et al. 2006b). Hence, the negatively charged laccase will bind with anthocyanins, which are positively charged in their free form. Given that anthocyanins are found in the skins of red grapes, it is likely that a percentage of any laccase present will be bound to the anthocyanins in the skins.

Lack of correlation between the per cent of Botrytis infection and the level of laccase detected In some cases, there was a reported lack of correlation between the amount of Botrytis infection observed in the vineyard and the level of laccase activity measured. There appears to be contradicting reports regarding this issue in the literature. Ribéreau-Gayon et al. (2006a) indicate that a strong correlation has been demonstrated between visually determined grape contamination levels and laccase activity. However, Dewey et al. (2008) report that levels of Botrytis infection do not always correspond to laccase activities in juice. Most of the queries received by the AWRI WES team were in relation to the testing of red juices and wines. Part of the correlation problem may be related to the difficulty in assessing the level of infection in red varieties. Grassin and Dubourdieu (1989) indicated their results “clearly demonstrate the difficulty inherent in visual assessment of the

contamination level by Botrytis cinerea, particularly for red varieties”. Another reason for an observed lack of correlation could be that not all isolates of Botrytis secrete laccase to the same extent (Slomczynski et al. 1995; Cotoras and Siva 2005). The presence of other infections in addition to Botrytis, which often occurs in vineyards, may also influence the laccase activity. For example, Kovac (1983) reported that laccase synthesis by Botrytis increases in the presence of Aspergillus or Penicillium. The binding of anthocyanins and laccase discussed above could contribute to a lack of correlation if the laccase activity result of juice analysis is low but the degree of infection in the vineyard is significant. That is, in this situation the laccase result is only an ‘apparent’ activity result, as the activity may increase after fermentation.

‘False positive’ or ‘false negative’ results As indicated above, test kits currently available are based on the oxidation of syringaldazine, which produces a pink/purple-coloured oxidation product. During 2011, the interpretation of laccase activity in deeply coloured Shiraz was difficult, given that the method relies on the ability to detect the pink/purple colour change. Samples may begin with a slight pink tinge if red juice or wine samples are ineffectively decolourised, and this can be misread as a ‘positive’ laccase result. Alternatively, the presence of a slight pink tinge at the start of the analysis can make it difficult to detect a small change in pink/purple colour due to a low level of laccase

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April 2012 – Issue 579

activity, leading to a ‘negative’ laccase result. Different kits provide different means to decolourise samples, generally through a mixture of PVPP and carbon. Ideally, samples should be colourless before performing the test to aid with interpretation.

Interpretation of the test kit results

Hydrogen peroxide addition Pfanz and Oppmann (1991) indicated that bisulfite and sulfite (the anions of SO2), are strong inhibitors of the dehydration of syringaldazine, which occurs during its oxidation resulting from laccase activity. Consequently, kits based on the syringaldazine method described by Grassin and Dubourdieu (1989) will usually require that juice and wines containing free SO2 be treated with hydrogen peroxide (H2O2) to remove the free SO2 just before the analysis. However, there is a possibility that adding H2O2 might also be problematic. Although not studying a laccase isolated from Botrytis, Edens et al. (1999) found that the laccase isolated from the plant fungus Gaeumannomyces graminis was reversibly inhibited by H2O2. This raises the possibility that laccase from Botrytis might also be inhibited by H2O2. Therefore, it might be prudent to treat a wine or juice containing free SO2 with a stoichiometric amount of H2O2 based on the free SO2 measured before commencing analysis, rather than adding a set amount which is usually in excess.

A large number of calls received by the AWRI WES team related to the interpretation of laccase test results, in particular results from the Dolmar test kit, which has a reporting scale from 0.2 to 1.5 laccase ‘units’. This led to some confusion, as previous advice provided to winemakers on laccase test results by the AWRI WES team had been limited to results obtained using the Botrytis test kit marketed by Novo, now marketed through Laffort (Botrytest kit), which reports laccase levels from 0 to 20 laccase units/mL. Several authors have referred to laccase activity in terms of activity units per millilitre (U/mL) of must or wine, so their recommendations have been applicable to the Botrytest kit (Leske 1993; Iland et al. 2000; Grassin and Dubourdieu 1989; Ribéreau-Gayon et al. 2006a). Grassin and Dubourdieu (1989) Laccase method investigations at reported that visually low levels of the AWRI Botrytis (less than 10% infection) result Queries from winemakers received in <4 U/mL laccase activity with visually during the 2011 growing season high levels of Botrytis reporting levels regarding the determination of laccase from 4–30 U/mL. Leske (1993) suggested activity drew attention to aspects of tests that an activity above 3 U/mL was utilising syringaldazine which might ‘significant’, Iland et al. (2000) suggested affect the laccase activity measured, that there would be some influence particularly colour removal and the of laccase activity with results from presence of SO2 and its removal using 5U/mL, while previous Novo promotional H2O2. Consequently, the AWRI began literature indicated that wines are at risk investigating an alternative to the of oxidation from results of 2 or more syringaldazine method, with the aim of U/mL. reducing any possible influences of the To help bring the Dolmar kit test210x297.indd method upon the activity of the target 1 results into perspective, some compound laccase. comparison measurements between The AWRI is in the process of the Dolmar and Botrytest kits were developing a laccase method which made by the AWRI WES team. Although addresses some of the concerns outlined extensive testing was not conducted and above. the comparison results were somewhat Initial comparisons with the variable, in general, results at the low end syringaldazine method using model and of the Botrytest kit scale corresponded decolourised wines spiked with laccase to results at the low end of the Dolmar enzyme are very promising. However, scale, and results at the high end of given the lack of commercial availability the Botrytest kit scale corresponded to of laccase isolated from Botrytis, the results at the high end of the Dolmar work has been conducted using a laccase scale. isolated from an alternative fungus. The important ‘take-home’ messages Consequently, we would like to conduct regarding the two kits are: further tests using ‘real’ Botrytis-affected • in general, the lowest levels on the wines from the current vintage. two scales are indicative of positive Initial investigations into colour Botrytis infection removal, the presence of SO2, and H2O2 • it is important to understand that the additions suggest that removing colour kits have different incremental colour also removes some laccase; the presence scales which cannot be interchanged of SO2 reduces the laccase activity for laccase activity interpretation. measured; and H2O2 additions might also April 2012 – Issue 579

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winemaking reduce the amount of laccase activity measured. Adrian D. Coulter is based at The Australian Wine Research Institute, PO Box 197, Glen Osmond SA 5064. Email: adrian.coulter@awri.com.au.

References

Cotoras, M.; Silva, E. (2005) Differences in the initial events of infection of Botrytis cinerea strains isolated from tomato and grape. Mycologia. 97(2): 485–492. Coulter, A. (1999) Increase in laccase activity after fermentation. Technical Review (Tech. Rev.) (120) The Australian Wine Research Institute: Adelaide, SA: 10-12. Dewey, F.M.; Hill, M.; DeScenzo, R. (2008) Quantification of Botrytis and laccase in winegrapes. American Journal of Enology and Viticulture. 59(1): 47–54. Edens, A.E.; Goins, T.Q.; Dooley, D.; Henson, J.M. (1999) Purification and Characterization of a Secreted

Laccase of Gaeumannomyces graminis var. tritici. Applied and Environmental Microbiology 65(7): 3071– 3074. Grassin, C. Dubourdieu, D. (1989) Quantitative determination of Botrytis laccase in musts and wines by the syringaldazine test. Journal of the Science of Food and Agriculture. 48(3): 369–376. Iland, P.G.; Ewart, A.; Sitters, J.; Markides, A.; Bruer, N. (2000) Techniques for chemical analysis and quality monitoring during winemaking. Adelaide, SA: Patrick Iland Wine Promotions; 48. Kovac, V. Vzbaski, L.J. (1983) Some moulds of interest to oenology - Penicillium and Cladosporium. (Quelques moisissures présentant un intérêt oenologique - Penicillium et Cladosporium) Bulletin de l’OIV 628: 420-432. Leske, P.A. (1993) Laccase—a threat in 1993. Aust. NZ Wine Ind. J. 8(2): 122–124. Marbach, I. Harel, E. Mayer, A.M. (1984) Molecular properties of extracellular Botrytis cinerea laccase. Phytochemistry 23 (12) Pergamon Press (Elsevier Science Ltd): Oxford, UK : 2713-2717.

Pfanz, H.; Oppmann, B. (1991) 96:Inhibition of lignifying processes by sulfur dioxide. 96:1; Conference: Annual meeting of the American Society of Plant Physiology, Albuquerque, NM (United States), 28 Jul - 1 Aug 1991. Ribéreau-Gayon, P.; Glories, Y.; Maujean, A; Dubourdieu. (2006a) Handbook of Enology Second Edition Volume 1: The Microbiology of Wine and Vinifications. Chichester: John Wiley & Sons Ltd. 265, 361. Ribéreau-Gayon, P.; Glories, Y.; Maujean, A; Dubourdieu, D. (2006b) Handbook of Enology Second Edition Volume 2: The Chemistry of Wine Stabilisation and Treatments. Chichester: John Wiley & Sons Ltd. 290. Slomczynski, D.; Nakas, J.P.; Tanenbaum, S. W. (1995) Production and characterization of laccase from Botrytis cinerea 61-34. Applied And Environmental Microbiology. 61(3): 907–912 Somers, C. (1983) Botrytis cinerea - oenological consequences. Technical Review (Tech. Rev.) (27) The Australian Wine Research Institute: Adelaide, SA : 13-18.

Companies struggle to survive current climate CENTURY-OLD SUPPLIER and installer of equipment for winemakers, JB Macmahon, has been placed in voluntary administration. The company has now been put up for sale, with administrator BRI Ferrier partner Nick Cooper, reporting to creditors that because the business acted so quickly to enter administration there may be more assets than liabilities. In a report to creditors, the company’s potential failure has been attributed to the downturn in the winemaking industry, notably a significant reduction in bottling and packaging equipment sales. In an advertisement, in the Adelaide Advertiser last month, the business is said to contain bottling and packaging equipment, along with processing and spare parts supplies, while it also holds a substantial spare parts stock in excess of

65,000 pieces and an “extensive national client base”. Also last month, the company responsible for Coonawarra’s largest managed vineyard investment scheme, Coonawarra Premium Vineyards Ltd, has been placed into receivership. In a statement on its website, Coonawarra Premium Vineyards Ltd (CPVL) said it was the responsible entity for some 243ha of vineyard. Receivers have now been appointed and it has been suspended from trading on the Australian Securities Exchange. John Hart and David Kidman of Ferrier Hodgson have been appointed as receivers of the property owned by subsidiary CPV Wines. At the beginning of March, Doug Rathbone, owner of the Rathbone Wine Group confirmed his company was for sale.

The group includes some of Australia’s most iconic wineries, including Yering Station and Mount Langi Ghiran in Victoria, Parker Coonawarra in South Australia and Xandau in Margaret River, Western Australia.. The properties were originally acquired under the Rathbone Wine Group Label between 1996 and 2005. The RWG also owns a bottling plant in Melbourne and a wine distribution company. According to a report in Decanter, RWG had grown into a AU$110m business in 16 years, but posted a AU$2m loss in 2011 with a revenue of AU$39m, compared with the AU$50.7m profit recorded in 2010. The Decanter article reported Rathbone had now put the whole of his wine enterprise up for sale, with the bottling plant having been on the market since last October.

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April 2012 – Issue 579

Series seeks human touch over terroir Terroir’s effect on wine is a story long told. But at what point does the winemaker’s influence kick into gear? Six winemakers are set to find out. Kellie Arbuckle

ON A HILL in McLaren Vale is a block of Shiraz vines, where six very individual winemakers from different wineries source their fruit. The grapes are not destined for their independent labels, however. No – they’re to be made by the winemakers in a way that reflects their personality, for inclusion in what is known as the Alpha Crucis Winemakers’ Series. In a project inspired by Tom Harvey, of Chalk Hill Wines, in McLaren Vale, the Series aims to draw the line between where terroir and human impact influences a resulting wine. Joining Harvey in the venture is Rebecca Willson of Bremerton Wines, Corrina Wright of Oliver’s Taranga, Emmanuelle Bekkers of Chalk Hill, Mike Brown of Gemtree Vineyards and Steve Grimley of Stamford and Clarke. But it’s not just about measuring the human touch. “People like to belt on about whether it’s a feminine or a masculine wine,” says Harvey, who first came up with idea while sitting around the kitchen table back in 2007. With three males and three females, he hopes the Series will provide an indication of whether gender plays a role in how different wines taste. “Our goal is to explore how a winemaker affects a parcel of grapes compared with five of their contemporaries, including whether or not gender has an identifiable influence,” Harvey said. Using Shiraz grapes, the makers have a number of options to choose from when fine-tuning their wine to their taste preferences; not the least of which is limited to oak regime or harvest date. Of course there are rules to the project: no winemaker is allowed to know when the other picks their fruit, nor are they privy to each others’ winemaking practices. The first Series to be released contained fruit from the 2008 vintage and was released in July last year. After favourable conditions in vintage 2010, the winemakers are looking forward to showcasing their latest wares in a second Series, which is due for release in July this year. With enough quality vintages, Harvey hopes they’ll be sufficient opportunity for the project to continue to a point where a library consisting of several Series can be created. “The true value of this is when you can open up six bottles of wine and taste them all comparatively,” Harvey said. “Ideally, I’d love for this product to be regarded as a collector’s item...for people to have it from 2008 and every year since.” Retailing at $300 a case, the equivalent of $50 a bottle, it’s not a cheap exercise – especially when some cases are flown to Portugal, where the cost of air freight is about $400. But Harvey insists it’s not a money-making exercise. “It’s about making a loss – it makes no sense,” he jokes. The target isn’t necessarily for the masses, either. “It’s not like cracking a bottle and then a month later cracking another bottle – we’re just catering to those people who are really intrigued by wine,” Harvey said. “It’s all about understanding the site and core elements of winemaking – anything where we’re getting a better understanding of winemaking is certainly a fascinating idea.” Quality plays an important part of this project. The volumes are small, too. Only 180 dozen cases were made of the 2008 Series, the equivalent of two 250L barrels from each winemaker, all of which have sold out. April 2012 – Issue 579

When asked why a Series wasn’t produced from vintages 2009 and 2011, Harvey said: “We’ll only ever produce wines in vintages where the six winemakers are happy.” “If it’s a bad vintage, we’ll just wear that cost.” It’s a big commitment, both financially and work-wise, too – especially for the winemakers who, with their own labels and the Series project, are effectively working two vintages at once. But they, too, see the value, along with critics in the industry. In his 2012 edition of Australian Wine Companion, wine writer James Halliday scores three out of six of the wines with a 95 point rating. Two wines are given a 94pt rating, while one is rated 93pts. “The feedback we’ve had internationally has been that the wines are ‘always to a tee’,” Harvey said. “People say ‘this stuff’s too cheap’. In an international market, there’s no resistance. It’s a world-first, so there has to be some value to that.” As for the 2010 Series, Harvey is keen to spread the product thinly into Canada, Germany, the UK and Hong Kong. “The goal is to talk about the story more and try and sell it. It’s a lot of money but we haven’t compromised in the way we’ve done things,” he said.

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Grapegrower & Winemaker

winemaking

“I’m not sure where it’s going to go in the future but I’d like to keep it going for as long as possible – as long as I have six winemakers who are all willing to participate. “This is something 30 years from now hopefully there’ll be a library of wines and a good story to tell.”

The six winemakers Rebecca Willson: Bremerton Wines, Langhorne Creek Harvest date: 14 March 2008 Winemaking method: Bunches were destemmed, crushed and chilled to 14ºC for two days before yeast culture was added and allowed to warm naturally. The ferment took a further five days before it was pressed and put to French oak barrique barrels to finish primary and malolactic fermentation.

Corrina Wright: Oliver’s Taranga, McLaren Vale Harvest date: 8 and 14 March 2008 Winemaking method: Two parcels were picked and fermented separately in the same manner. The grape must was chilled and allowed to ferment using natural (or wild) yeast rather than a cultured yeast strain. After six days the ferment reached 1º Baumé. It was pressed and put to French oak barrique barrels with a small amount of gross lees present. Once fermentation was complete, the wine was racked off and clarified before returning to barrel for ageing.

74 Grapegrower & Winemaker

Emmanuelle Bekkers: Chalk Hill Wines, McLaren Vale

Tom Harvey: Chalk Hill Wines, McLaren Vale

Harvest date: 14 March 2008 Winemaking method: Bunches were de-stemmed, crushed and chilled to 14ºC and allowed to ‘cold soak’ for two days to ensure optimal colour extraction from the grape skins. The ferment temperature was regulated to retain delicate aromas before pressing to new French oak hogsheads and puncheons for maturation.

Harvest date: 14th March 2008 Winemaking method: Bunches were de-stemmed and crushed to small fermenters and kept below 18°C for two days before cultured yeast was added. The ferment was hand-plunged and pressed off at around 1° Baumé before it was filled to French oak puncheons (both new and one-year-old) where it completed malolactic fermentation and ageing.*

Mike Brown: Gemtree Vineyards, McLaren Vale Harvest date: 15 March 2008 Winemaking method: Grapes were picked, de-stemmed and crushed into small opentop fermenters and seeded with a cultured yeast. The juice was drained off skins each day and replaced over the top of the skins to enable suitable colour and flavour extraction. The ferment also received gentle hand plunging over before it was pressed off to French oak barrique barrels (one-third new, two-thirds one-year-old barrels). Malolactic fermentation occurred in barrels three weeks after pressing off.

* Tom has taken off his winemaking hat for the 2010 vintage, with Peter Schell from Spinifex in the Barossa Valley taking his place.

Steve Grimley: Stamford and Clarke, McLaren Vale Harvest date: 6 March 2008 Winemaking method: The grapes were de-stemmed and crushed to small open fermenters and inoculated with yeast on the second day to commence ferment. The must was gently hand plunged every four hours for the next three days before pressing off to new French oak puncheons for ageing. www.winebiz.com.au

In an alternative story to terroir, Tom Harvey of Chalk Hill wants to capture the winemakers’ influence on wine. April 2012 – Issue 579

winemaking in brief WINE SHOW

Chardonnay shines at Sydney Royal Wine Show Chardonnay was the standout at this year’s Sydney Royal Wine Show, with 22 gold medals awarded across a range of styles and regions. Western Australian winery Vasse Felix took out the top gong at the show, winning the Albert Chan Memorial Prize for its 2010 Heytesbury Chardonnay. The Margaret River drop was awarded best white wine of show along with best premium white wine, and emerged with the coveted Fine Wine Partners Perpetual Trophy. Shiraz was also a standout, with Victoria’s Mount Langi Ghiran Vineyard’s 2010 Cliff Edge Shiraz taking out the coveted Macquarie Group Perpetual Trophy for best wine of show. The same Shiraz also won trophies for best red wine of show and best varietal wine, Shiraz. Iain Riggs chaired five panels of judges, who tasted their way through 2241 Australian wines and brandies, awarding 36 trophies and 975 medals. McLeish Estate in Pokolbin was

awarded the inaugural David Clarke Memorial Perpetual Trophy for its 2007 Semillon, while Coolangatta Estate picked up two trophies for its 2006 Semillon. McWilliam’s Wine Group retained the McCarthy Shield and defended the title of most successful exhibitor in the wines and brandy section for the fifth year in a row.

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The Western Australian wine industry has undergone a rebranding, with a new name along with a range of key initiatives aimed at exciting people about WA wine. Lighter-bodied wines dominated the The new name for the WA Wine awards at the Sydney International Wine Industry Association is Wines of Western Competition in February. Australia – Taste Extraordinary, which The Trinity Hill 2010 Gimblett Gravels comes after more than 18 months of Syrah took out three trophies at this year’s strategic planning. competition for best wine, best red wine Other developments include an and best lighter-bodied dry red table wine. updated industry website, building on Coolangatta Estate 2006 Semillon was WA Wine Month as a national food and awarded two trophies for best white wine wine relevant celebration and a revision and best lighter-bodied dry white table of the award categories and nomination wine, while Marlborough winery Saint process in the WA Wine Industry Awards. Clair Family Estate picked up the trophy The region is also building on wine for most successful entrant. education along with international The runner-up to the top wine was marketing events. Penny’s Hill 2010 Cracking Black Shiraz, find outsystem, more, visit: www.winewa.asn. which won a trophy for runner up to best Cellastac’s efficient palletised bottleTo storage cuts labour costs, provid au. wine of competition and a trophy for best

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April 2012 – Issue 579

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winemaking

Building presence in US wine market Laurie Martin

While attending the 2010 Australian Wine Outlook Conference, US Wine Market Council president John Gillespie discussed the growing trend in US wine consumption but observed how different sectors of the market seemed to be taking different paths. Gillespie, who is also chief executive officer of Wine Opinions, recommended Australian wine producers should undertake more qualitative research on the US trade to better understand the situation and to look for possible remedies to declining sales of Australian wine. “I will say that face-to-face work with the trade in the US should always be a priority,” Gillespie said. There was real potential, he said, in the $8-18 price-point in the US market, which presented good, viable opportunities for Australia. Later this month, the 20 th annual staging of Hospice du Rhone (HdR) will see US wine importers, sommeliers, stockists and consumers come together for their annual bout of tasting Rhone varietal wines and mixing with producers from around the world. The event – which encompasses eating, tasting and social occasions (such as 10-pin bowling) under a different, quirky theme each year – also has its serious side where winemaking and market considerations are explored. One of the four seminars at this year’s event held from 26-28 April, will be presented by the inimitable Chester Osborn of d’Arenberg. He’ll be detailing studies from McLaren Vale, geologic and sub-regional, that have taken place in the past few years and will explain and demonstrate through tasting how

Chester Osborn at left – part of the Rhonely Hearts Club band.

this information has impacted on his viticulture and winemaking practices. A favourite son of the event (he was made HdR person of the year in 2000 and was installed in the Sgt Peppers themed graphic of the 2010 year), Chester said he has attended HdR about 10 times in total. “There’s a lot of trade that go there, a lot of producers and it’s a great networking opportunity. It’s a lot of fun,” Osborn said. He said d’Arenberg’s US sales had showed good growth in the past financial

year, mostly in the higher price-points. HdR will kick-off Osborn’s US market visit this year, where he will also be joining the Wine Spectator Grand Tour in New York and Las Vegas where d’Arenberg has managed to score four of the top 100 wines – the first time one producer from one country has managed to achieve that feat. Read more: Grapegrower & Winemaker will have a report from HdR in our June issue.

French wineries toast Australian technology Australian wine technology company, Flextank International Ltd, has made its first inroads into the European wine market with its innovative wine maturation vessels. The company has shipped the first two containers of its patented polymer cubes to 10 different wineries in France, located in Bordeaux, Languedoc and the Rhone Valley. This is a significant breakthrough for Flextank. Its polymer cubes are already used in more than 500 Australian

76 Grapegrower & Winemaker

wineries, but according to managing director Peter Steer, the main game has always been about the much larger European and US markets. Flextank’s vessels are intended to replace barrels in the winemaking process. Steer said t he cubes were significantly cheaper to buy – about a quarter the price of barrels. “They also last for 20 years against only five years for barrels, they are easier to handle than barrels and provide more www.winebiz.com.au

even oxygenation of the wine,” Steer said. Mr Steer said Europe was the biggest wine market in the world and once strict rules imposed on winemakers were continuing to be relaxed. “When winemakers use our cubes, we provide them with oak staves to place in the cubes, to provide flavor, aromatics and structural components to the wine. That is now permitted in many parts of France whereas it was once forbidden.” April 2012 – Issue 579

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winemaking winemaker

Liam Heslop

is the winemaker at Lowe Wines in the Mudgee wine region of NSW. He is also a participant of the 2012 Future Leaders program for the wine industry. After graduating with a Bachelor of Agriculture Science (Oenology) in 2005, Heslop started his career in the wine world as an assistant winemaker with Pieter van Gent Winery before moving onto Lowe Wines in 2008. Originally from McLaren Vale, Heslop has also experienced vintage in California and Italy.

What inspired you to become a winemaker and how have you got to where you are now?

When I was about four years old I helped my grandmother pruning in the vineyard. Anything she left I would cut back to two buds. My passion for science and winemaking has come from my father and his brother, who both have their own small winery and vineyard. The best way to learn and go places is to surround yourself with wise people who are already there. A little passion, interest and hard work always helps. Who do you think is the most influential person in the Australian wine industry today?

The most influential person in the wine industry today would most likely be James Gosper from Wine Australia. In his role as general manager and market development, he has a direct influence on the strategic direction of the industry in trying to overcome its many challenges. Unfortunately he has had some strong competition recently and the most influential people in the industry are probably the wine buyers and CEOs of Dan Murphy’s and Coles. Aggressive discounting and the rise of the retailers’ own brands are changing the dynamic of the industry. Which of your wines do you most enjoy making and why?

Louee Riesling and the Lowe Organic Zinfandel. Riesling is the most nervewrecking wine to make in the winery, trying to get the balance just right between the acid and residual sugar. Our Nullo Mountain vineyard is cool-climate, at 1180m high, so natural acid is never in short supply. The challenge and secret with Zinfandel is in the vineyard. Some years the crop needs thinning three times to achieve the power, concentration and elegance our wine is known for. Tell us about your most wine-tasting experience.

What keeps you awake at night?

At the moment rain has been keeping me awake. The sound of rain on the roof normally puts me to sleep but leading up to harvest it makes me nervous. The other thing that keeps me awake this time of year is the fear that I forgot to turn the chilling off a fermenting tank and will find it almost frozen in the morning. Which export markets are of most interest to you and what do you think is the key thing that will help you succeed in that market?

The Japanese market is of most interest at present. The Japanese people are health and fashion conscious but also value good service and loyalty. They like the complete package: product, packaging, service and the story behind the wine and the producer.

memorable

This was in 2009 at the Poderi Colla Winery near Alba, Piedmont, Italy. It started with some Moscato tank samples from producers in Asti and followed with 10-year verticals of the wineries best Dolcetto, Barbaresco and Barolo. It was a typically enthused Italian trip down memory lane with the various Moscato producers and three winemaking generations of the Colla family present.

78 Grapegrower & Winemaker

The information, in Grapegrower & Winemaker is delivered in such a way that makes it easy to find and interpret. The articles are very well written and I like their practical nature, making the magazine a useful source of reliable information.

What do you think of the Australian wine show system? Do you enter wine shows? Why/why not?

The Australian wine show system has helped lift the quality of regional wine and should continue to be supported. The system is not perfect, though, and there are always logistical difficulties when it comes to the size of classes, and how this affects the tasters and results. We enter wine shows but only a select few. www.winebiz.com.au

What do you think is the Australian wine industry’s biggest challenge and what is your solution to the problem?

Oversupply/production is not a new phenomenon for the Australian wine industry but remains one of the industry’s biggest challenges. Significant recent efforts have been made by the industry to correct the problem. In Mudgee, some 30 per cent of the total vineyard area has been removed in the past few years. Correction of the oversupply situation needs a continued effort but there is no silver bullet fix. Other complex issues like export market volatility and the global financial crisis add to the challenge. A retraction of production to offset reduced sales will affect the supply of levy money needed to secure the industry’s future through research and market development. The Ark question. The world is flooding... which two wines (white and red) would you take onto the Ark?

If I had to get on the Ark tomorrow, I would take a 1982 Prunotto Barolo, Piedmont, Italy. It has sentimental value being the same age as me and the Colla family started the Prunotto winery. For the white, I would take a German ice wine because everyone loves to drink them, and it’s most likely no one will think to take a wine to have with dessert. April 2012 – Issue 579

sales & marketing What influences the Chinese distributor’s choice on which winery to represent? Dr Steve Goodman and Teagan Altschwager

This is one paper in a series presenting results from research funded by the Grape and Wine Research and Development Corporation that examines decision-influencers on which wine to buy in, promote and represent for trade customers and distributors. The research is investigating distributors, and on- and off-premise buyers in Australia, China and the USA. A previous paper, published in Grapegrower & Winemaker, in January 2012, presented results from Australian data about what influences a distributor’s choice on which winery to represent. This paper presents the first results from the Chinese data collection. The previous paper contained a brief review of the literature and background to the research, so it is not replicated here (that paper can be accessed on the online archives at: www.winebiz.com.au/gwm/). Data in China was collected from the three key wine cities of Beijing, Shanghai and Guangzhou, with approximately equal responses from each location. Pen and paper questionnaires were administered to distributors, retailers and on-premise wine buyers – the onand off-premise data will be presented in future papers. Demographic and descriptive data were gathered and then a choice experiment using the best and worse choice method was used. In that, respondents were presented with a series of tables comprised of a number of choices. In each table they are asked to nominate which one influenced their decision the ‘most’ and which one influenced their decision the ‘least’. Not all attributes are in each table, but each is presented

the same number of times and appears ‘against’ each other attribute evenly. Analysis involved a count of the number of times an attribute (decision-influencer) was scored as ‘most’ and then subtracting the number of times it was scored ‘least’. A standardisation technique was applied that converted the B-W score into a scale of 0 to 100, where 100 is the #1 influencing attribute, and the remaining scores essentially showed the percentage comparison of the particular attribute being #1. It gave a comparison showing the power of the various attributes on the decision being made. Figure 1 shows the results for the Chinese sample. ‘Brand’ was the #1 influencer across all respondents – more than twice as powerful influence on decision as the #2 influence of ‘margin’. There appears to be a relatively even influence of a number of other influencers

on the decision with #’s 6,7,8,10 and 12 appearing relatively similar. Previous research has shown the benefit though of dissecting the sample to see how the influencers may vary when different segments – such as size, margin and orientation are used. Figure 2 shows there are differences in the degree to which various attributes influence the distributors decision based on the city of the respondent. This comes as no surprise to someone who has conducted wine business in the three cities. They operate quite differently in many regards, this research aimed to highlight some of the key differences so as to enable better positioning and communication depending on the target market within China. While there was no overplaying the role and influence of ‘brand’, in Beijing, ‘margin’ was almost as strong an

Figure 1. ‘What influences your decision when looking at taking on a new winery?’ Chinese distributors (n=106).

1 Retail price point 2 Margin 3 Tasting stock allowance 4 A&P contribution 5 Write ups and features 6 Medals and awards 7 Vintage/aged wine 8 Merchandise support 9 Grape variety 10 Range of wine offered 11 Brand 12 Origin/region 13 Like the taste April 2012 – Issue 579

Beijing

Ghuangzhou

Shanghai

Figure 2. Differences between distributor location Bejing (n=50), Shanghai (n=27) and Guangzhou (n=29). www.winebiz.com.au

Grapegrower & Winemaker

sales & marketing Cases Sold Per Month

100.00

1 Retail price point 2 Margin

90.00

3 Tasting stock allowance

Cases sold per month

80.00

<250

70.00

>250

4 A&P contribution 5 Write ups and features 6 Medals and awards

60.00

7 Vintage/aged wine 50.00

8 Merchandise support

40.00

9 Grape variety 10 Range of wine offered

30.00

11 Brand 12 Origin/region

20.00

13 Like the taste

10.00 0.00 1

Figure 3. Differences between low (n=66) and high (n=40) volume wine distributors. 100.00 90.00

Cases sold per month

80.00

On-Premise

Off-Premise

70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 1

Off-Premise Figure 4. Differences between on-On-Premise (n=25) and off-Premise (n=56) focussed distributors. influence and significantly more so than the other cities. In Beijing, ‘price-point’ and ‘origin’ were also much more of an influence, qualitative feedback indicated ‘Bordeaux’ to influence this. In Shanghai the ability to supply ‘vintage/aged wine’ influence decisions more than Beijing and Guanzhou, whereas ‘merchandise support’ played more of an influence in those two locations. A signal for further research, ‘grape variety’ is much more important in Beijing – some might say ‘ah Cabernet’ due to the Bordeaux effect, and yet ‘range of wine offered’ is also much more of an influence. While we often think of China as a ‘big’ market, there are many wine exporters dealing with distributors who operate at the lower volume sales end of the market. This is to be expected in an emerging market where businesses are only stating to capitalise on both opportunity and expertise. At the lower volume end (where many small to medium enterprises (SME), i.e., wineries, may begin dealing), how are the influencers compared with larger volume distributors? Figure 3 shows while both are most influenced by

80 Grapegrower & Winemaker

‘brand’, the smaller volume distributors are also significantly more influenced by ‘retail price-point’ and ‘margin’ than their larger counterparts. As a new entrant, lesser brand entering into the Chinese market, it is worth having the conversation with the distributor about ‘what price-points they seek to hit’, ‘what their retail demand is trying to offer’ and even ‘what price points aren’t that well served’. This doesn’t always infer a low price; what it does is shows the importance of talking with the supply chain to attempt to align goals so that appropriate stock is offered to meet the demand of the specific chain. The results were similar when comparing firms that were smaller, based on the number of sales representatives employed and smaller numbers of wineries represented. Segmentation was undertaken to see those with a bias towards on- or offpremise customers; for example those with an even portion of their business into both markets were disregarded from the analysis. ‘Brand’ still ruled both groups, but there were some differences with the on-premise oriented distributors more influenced by ‘margin’ www.winebiz.com.au

and ‘retail price-point’, similar to the smaller turnover and employee-sized firms. Additionally, these distributors were much more influenced by ‘vintage/ aged wine’, ‘merchandise support’ and ‘medals and awards won’ than those with an off-premise focus. While by no means definitive, it is a signal that on-premise wine culture is emergent, with different behaviour adapting to the needs of the different channel. It might be that this offers the smaller, less-known brand an avenue into the channel if they can position using factors such as aged wine, which assists the on-premise customer who doesn’t have the facilities or expertise to manage and age wine and yet wants to deliver the value to their customers.

Conclusion This research has highlighted that there are differences in what influences a distributor’s decision on which winery to represent. It signals the need to understand who you are looking to do business with and to ensure, that by prior design or working together, you are more able to offer a ‘bundle’ that represents the value those in the chain are looking for. The next papers will present the results for the Chinese on- and off-premise segments to further give insight into the wine supply chain decision influencers. The key learning that we see from this research is the need to understand who you are doing business with, their objectives, interest and orientation – rather than chasing and hoping from someone to carry your wine. Steve Goodman is senior lecturer in marketing and program director higher degrees by research at the University of Adelaide. His research involves wine choice and supply chain decision-making. He is currently supervising a number of Honours and PhD Students in wine related topics. For updates across these areas: steve.goodman@adelaide.edu.au or facebook.com/stevegoodmanwine. Teagan Altschwager is a PhD Candidate at the University of Adelaide Business School, where she is researching the concept of Brand Events and Marketing in the Wine Sector. She conducted the data analysis for this work. teagan.altschwager@adelaide.edu.au. April 2012 – Issue 579

Wine scholarship a memorial to German daughter and friend ‘She went through her short life with the power of a hurricane,’ wrote Esther’s parents in her obituary eight years ago after a tragic car accident put an end to her life while she was working a vintage season in Australia. Her parents, colleagues and friends at Bibber International, keep her memory alive and extend her extraordinary spirit to future generations of winemakers with a unique scholarship to help give an Australian winemaker an opportunity to experience vintage in Germany. Every year, Esther’s parents, in cooperation with Bibber International, promote The Esther Knewitz Memorial Scholarship, which provides the opportunity for a young Australian winemaker to be part of a winery exchange to Germany. Bibber International CEO Sue Caloghiris said the idea behind the scholarship was to help keep Esther’s memory alive and support young people in the wine industry who have the same zest for life and community spirit that made Esther’s life an example to follow. Applicants must have winery experience and a passion for continuing their career in the wine industry. Esther was an oenology student at Geisenheim University, Germany, and during her holidays she loved to travel to different wine producing countries to gain work experience for the vintage season. She worked with a group of international friends in Burgundy, Chile, California and in a major wine cellar in Germany. Australia was another goal

to New titles Wine 2 1 in 20

in her promising winemaking career, which prematurely ended in a tragic motor vehicle accident when she was just 24-years-old. The successful applicant will win the opportunity to be employed at a high profile winery in Germany, and will also receive return airfares, all visa fees, plus AUD$1000 spending money. All the information about the application process can be found at the Bibber International website (www.bibber.com.au). A brief application form is required, as well as a CV and an autobiography. Applicants will also need to write a statement, of about 500 words, outlining their academic and personal achievements and how they will benefit from the experience in terms of personal growth and winemaking skills. The successful applicant will be announced on Saturday 9 June, which would have been Esther’s 33rd birthday. The scholarship is aimed at Australian

winemakers or recent graduates who are interested in getting work experience in Germany. The program is about 10 weeks duration from September to November 2012, depending on the vintage season. All applications will be judged by Esther’s parents, Anne and Horst Knewitz; Philipp Maurer, winemaker at Reh- Kendermann, in Germany; Sue Bell, former manager at Stonehaven Winery in Australia where Esther worked in Australia; and Sue Caloghiris. The due date for applications is 4 May 2012. For more information about the scholarship and the Bibber program please visit the website at www.bibber.com.au. Please note that applicants who are unsuccessful in winning the scholarship may still be eligible to participate in the Bibber Winery Exchange Program to Germany and other destinations.

Principles of Wine Marketing By Steve Goodman

Steve Goodman captures over a decade of experience as a wine marketer (consulting and research) to discuss the principles of marketing for the wine business. Designed to generate the reader’s ability to use marketing thinking to apply to their wine business. Covers a wide range of marketing principles specific for the wine industry, from marketing strategy, research, segmentation and targeting, consumer behavior, building brands, price, distribution and promotion. An extremely useful handbook for anyone involved in the sale of wine, including students, business owners, retailers and marketers.

Visit our bookstore at www.winebiz.com.au for further details or to order your copy today.

Email: orders@winetitles.com.au Ph: +61 8 8369 9500

April 2012 – Issue 579

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sales & marketing

Sauvignon Blanc, no more? Jeni Port columnist

“I don’t like Sauvignon Blanc but I need one for my list.” A wine glass was thrust forward. “What have you got?” The two young dudes manning the Catalina Sounds/Totara stand at last month’s “New Zealand In A Glass” event in Melbourne didn’t even see it coming. “We have four Sauvignon Blancs,” came the bouncy reply from young dude number one. “God no. Four!” It sounded like the man with the dyed hair had been hit in the stomach with a full bottle of Sauvignon Blanc. Metaphorically, I suppose, he had. He was clearly in pain. What a difference a year can make in wine. From being able to do no wrong, New Zealand Sauvignon Blanc can now do little right. You hear a lot of vitriol aimed at New Zealand Sauvignon Blanc these days and the guy with the dyed hair was giving vent. Why, I’m not sure. If Australian wine drinkers have changed their collective mind, shifting 360 degrees away from gooseberry and grass towards maybe spiced apple and pear (Gris) or citrus and acid (Riesling), it’s just the traditional wine cycle at work. Every decade or so, generally with the rise of a new wine drinking generation, the taste pendulum swings. New Zealand Sauvignon Blanc had achieved the unthinkable in Australia becoming the number one selling wine across the country. Sales had taken Sav Blanc right to the top but now it’s on the decline. Instead of moving on, which was clearly on the minds of the New Zealanders at the New Zealand In A Glass tasting, some Aussie sommeliers and restaurateurs, wine writers and producers are lining up to kick a Kiwi. At Aussie wine shows judges pull long faces and look stricken if they land the Sauvignon Blanc class. Next, they’ll be drawing straws. Suddenly, it’s cool to bag Sav Blanc. Here is an excerpt from a Melbourne

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wine blogger, formerly in retail, on the subject of the little white grape with the big personality now on the nose. “Considered by many in the wine industry to be a noxious weed, Sauvignon Blanc has infiltrated wine circles much the same as Kim Kardashian has infiltrated the news cycle - by being completely devoid of legitimate worth but (somehow) being popular among the plebs.” At the recent International Cool Climate Symposium in Hobart, some New Zealand producers were reportedly on the receiving end of Aussie sledging on the subject of Savvy. The guys at the Catalina Sounds/ Totara stand were copasetic. Yeah, they said, they had been getting a fair bit of Aussie grief about Sav Blanc but they had been expecting it. James Healy, former winemaker at Cloudy Bay, a company that helped put Marlborough Sauvignon Blanc on the world map, who is now with Dog Point, had his own anti-Savvy experience recently in Melbourne. There was no name calling involved but nevertheless Healy said he got the message. “Three weeks ago I was with our distributors at an upmarket establishment in Melbourne where the buyer/sommelier informed me that he would only list two Marlborough Sauvignon Blancs,” explained Healy. “When I asked why, he simply said that was all that he would sell and he wanted people to order more Australian wine. “I accept this as it’s his place and he can do whatever he wants but my point here is that this is home grown protectionism and I would suggest that his stance is a result of pressure from Australian producers. “In my experience that sort of thing is never successful long-term.” Now, this is where the whole antiSavvy Aussie thing gets interesting. Quality Sauvignon Blanc makers were the reason why drinkers and wine writers around the world first went loopy for the grape, makers like Cloudy Bay, Hunter’s, www.winebiz.com.au

Lawson’s Dry Hills, Nautilus, etc. Those makers have continued to pursue quality despite the ‘savalanche’ of $5 cleanskins and competition from newcomers, some of whom have not shared the same pursuit of quality. These makers are still doing good work so why knock them? Knock the ones who deserve it. Dan Simms, of Sommeliers Australia, took another tack. Maybe New Zealand winemakers feeling the pinch in tough times were getting pushy with Australian sommeliers. “Needs to be mutual respect on all sides, don’t you think?” he said. Absolutely. Picking up the pieces of a broken market won’t be easy for the New Zealanders. Maybe they have expected too much of the closer economic relations as well as historical and social ties that have traditionally bound New Zealand and Australia together. A visit to this year’s New Zealand In A Glass tasting would have set them straight. Retailers, restaurateurs, sommeliers and wine writers have moved on. It’s the lifeforce of the wine world, the perpetual hum in the background, the ticking of the clock as it counts down one trend and mercilessly moves to the next. New Zealanders are well used to name calling, some innocent sledging from the Aussies on the cricket pitch. Seems now the cricket game has moved into the wine bar and the retail shop. It was explained to me that New Zealand wines are now “too mainstream,” surely a compliment of sorts. It is often forgotten though that there are still consumers out there with a taste for New Zealand Sauvignon Blanc. Sales aren’t declining so fast for Aussie retailers and restaurateurs to move completely away from the wine style. Even the Melbourne restaurateur with the dyed hair admitted that much. And the dudes from Catalina Sounds and Totara? Well, they also had some handy Pinot Noirs to show including the tasty Nanny Goat from Central Otago, so all isn’t lost …just yet. April 2012 – Issue 579

Wineries get on board event management Event planning takes time, effort and money. But a proactive and creative approach can award wineries long-term gains Kellie Arbuckle

SITUATED IN THE southern Adelaide Hills, Longview Vineyard is a small winery with a focus that reflects the attitudes and lifestyle of its owners. Brothers Mark and Peter Saturno are young wine entrepreneurs who took over Longview back in 2007, with an ambition to broaden its offerings through events aimed at the younger generation of wine drinkers. “Our target is predominantly younger people because a lot of people over 50 have made their minds up about what they’re drinking; they’re loyal to their brands. What we’re trying to do is build up our own brand loyalty,” Mark said. The winery has traditionally played host to wedding functions, attracting about 100 people at each service. But over the past couple of years, the Saturno brothers have added accommodation and a main event in an attempt to capture

their target audience and make a lasting impression. Last year, the brothers launched an event called Krush Klinic. Timed in late January to coincide with the Adelaide Hills Crush Festival, the event at Longview Vineyard is unique. In its first year, four of Australia’s best street artists were employed by the Saturnos to compete in a challenge that would see them create a piece of art – as judged by a panel – with the best artwork to feature as a label design of a newrelease wine by Longview. “Wine events have become so formulaic, where people come and sit on the lawn and have a picnic to some B-grade cover band,” Mark said. “While that’s nice and pleasant, that’s not what we are. My brother and I love this type of thing and we wanted to incorporate what we love with what we do.”

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The first Krush Klinic drew a crowd of 650 people but the brothers were keen to add more to their following. They recently held the second Krush Klinic, this time adding New York-inspired street food, a special guest DJ and a team of breakdancers to the mix. Their 2008 Shiraz, labelled ‘The Piece’, featured the design from the year prior, and was released with the bottle placed in a spray can. The event attracted an impressive 1200 people. Looking back on the two experiences, Mark says there are a number of practical implications in event planning that need to be considered. “The things that have to happen first and foremost are licensing, security, toilets, water and sunscreen – you have to make sure all those basic elements are under control before you start selling food and wine,” said Mark, who with Peter spent

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sales & marketing

Longview Vineyard’s annual Krush Klinic targets the younger crowd by engaging street artists, breakdancers and a special guest DJ.

about six months planning this year’s event. “Make sure you have plenty of stock and staff, and make sure they’re briefed on what’s going on. “The most important thing is to make sure people are happy and you have efficiency of service. And that there’s a little something for everyone.” Longview has taken the approach of doing one major event a year, with corporate events and functions following for the rest of the year. They use social media, such as Facebook and Twitter, to spread word prior to the event, and advertise in print media relevant to their target audience. For Krush Klinic they advertised in Rip It Up – an alternative street magazine. While visitor numbers on the day of the event are an important indication of success, Mark says the follow-through is equally important. “If people are still talking about it in six months and we see an increase in Longview’s visitors throughout the remainder of the year, then we’ve done our job,” he said. “You can’t gauge it [success] at the end of the day and look at how much money we did or didn’t make. It might happen six months or even years down the track when you realise your brand is gaining more visibility in the marketplace. And it could just be the strength of these events.”

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Wine Australia shares tips for EVENTS More than 90 events have been planned by Australian wineries from 35 regions for the A + Australian Wine Celebration. Wine Australia is behind the event, which takes place this month, 12-29 April and aims to reignite the excitement in Australian wine in our own market. Hot-air balloon winery celebrations and pop-up bars are among some of the creative events which have been planned, in addition to more traditional celebrations such as luncheons and cellar door promotions. In light of the initiative, Wine Australia regional director, Australia and emerging markets Aaron Brasher shares his tips on how small and medium-sized wineries can plan events and follow through: • timing is crucial. Ensure there aren’t conflicting events in the region (or nearby) that would cannibalise your event • be realistic in what you are planning to execute and ensure you over-deliver on what was promised • ensure branding and the ‘take home’ message is strong • simple things like extended licensing, security, extra toilet facilities need to be considered • intimate events that highlight the wines and personalities of the winery; masterclasses and back vintage tastings are easy enough to activate • look to kindred wineries in the region to partner with to share the cost and strengthen the regional message • if a winery doesn’t have suitable facilities to host an event then partner with a local restaurant or pub • build a database and communicate before and after the event • post event communications direct and via e-news • offer special offers to those who attended the event.

www.winebiz.com.au

April 2012 – Issue 579

label design

Elegance lifts blue moon design Graphic Language Design is a firm of designers who specialise in wine, related packaging and promotional materials. With over 20 years’ experience, both director Nina Chalmers and senior designer Julie Capurso’s main focus is the intended market and innovative design for brand longevity. They are passionate about combining typography and images, and they enjoy sharing the experience of the brand coming to life with their clients. The duo create new brands, freshen existing brands, and provide clients with a choice of creating a new design or choosing from its Ready to Wear Collection of original wine and olive oil labels. Answers by Nina Chalmers and Diana Jaquillard of Graphic Language Design in Adelaide. Label showcased: New design for Blue Moon Valley Reserve Series, South Eastern Australian Wine. Export market: Thailand. What inspired you to work in design and what aspect of label design do you enjoy the most, or derive the most satisfaction from?

Nina: Design and illustration have always been my passion and I consider it a gift to have a career that satisfies the soul. Consumers are often attracted to a bottle of wine by the label design and being able to share my creativity just adds to the job satisfaction. What was the inspiration or key branding message behind this particular wine label?

Diana: The key inspiration was the name of the brand Blue Moon Valley. This is a beautiful and elegant name. The Blue Moon Valley graphic has been designed to link with the Little Sun Vine label design, which we had created previously, so it too deserved to be a premium looking design. The old Blue Moon Valley design with April 2012 – Issue 579

the cartoon ‘Skippy’ that appeared to be standing, not jumping over a very rudimentary moon, did not do the brand justice. We endeavoured to design a beautiful label with all the visual cues of a reserve wine. It is suitably positioned in the market with its classical gilded compass, and elegant, well-balanced fonts. This will attract the Asian purchaser with its more upmarket appearance, but will appeal to other markets equally well. What are the technical specs used in the production of the label, i.e., printing technique, processes and colours?

Diana: A soft metallic blue ink elevates the moon image while gold foil is used to embellish the compass details and sparkling stars. The label base includes a delicate art paper grain finish to elevate the design to a more premium pricepoint. A spot emboss/high-build screen has been used on the brand name and the black areas of the red ‘wax seal’ to give the label more dimension and tactile appeal. A spot gloss varnish has been applied to the blue metallic ink and red ‘wax seal’ to give more emphasis. An all-over protective matte UV varnish has been applied to the rest of the label to prevent scuffing. These elements are carefully thought out, with the consumer, product perception as well as budget in mind. It is discussed in detail with the client and the printers to achieve the best value for money for current and successive reprints. In your opinion, what are the most important labelling concepts to impact on wine sales and marketing success?

Nina: The most important labelling concepts are well-considered, with the intended market at top of mind, as well as longevity and the all-important budget. It is uneconomical to use trendy, www.winebiz.com.au

short-lived designs or, as mentioned, pay money for poor design that doesn’t work, only to have to reinvent it later. It is advisable to have a theme flowing through your related brands so that there is a relationship, a story and a brand personality that is memorable. Since our wine markets are now largely expanding to China and other Asian countries, the brand name must be carefully researched, easily pronounced, memorable and inoffensive in its market. No aspect of the design should be off-putting to the intended customer, be it in the graphics, symbolism or colours. To what extent do countries respond differently to labels and wine marketing images?

Diana: World markets differ substantially. Asian markets are still very orthodox and conservative, as they are still emotionally appended to the prestige of classical European designer brands. The UK and European market is also still quite conservative, but some markets allow for a little more leeway in creativity. The US market is now less moneyed than the Asian markets, so the premium wines are not selling as well as they used to. These customers are less traditional and espouse designs that are quirkier, fun and therefore memorable to their way of thinking. How can label designers overcome the challenge of helping a wine bottle stand out as the market becomes increasingly congested?

Nina: Designers must design for the particular market but with an ingenious twist of originality. This is difficult, given the sea of brands, but informed and thoughtful colour choice, clever layout and distinctive font styles married with uniquely die-cut labels can evolve into an enduring brand that fits the client’s brief and appeals to the consumer. Grapegrower & Winemaker

business & technology Interest rates: comparing oranges and apples Melanie Reddaway Business columnist

Recently, my husband was in the market for a new work ute. We were playing good cop bad cop. He was the good cop who was keen to buy the car, but he needed a good deal to get it past the bad cop wife. Cut to me giggling at his hard-done-by routine over speakerphone: Salesguy: Well if she doesn’t have time to come down to look at the car, I’m happy to bring it to you so she can see how nice it is. Luke: Dude, you’re not hearing me. She’s an accountant. She’s not falling for power windows and a pretty colour. It’s all about the numbers. Please, work with me here! Salesguy: Hey, tell her we can hook you up with a sweet discount on finance. I reckon I can get you at least a percent off. Oh please. A percent off what? Your otherwise offensively inflated rate? Your rate that seems low until you take into account the ridiculous monthly fee? Or your rate that’s actually quite reasonable, but only available if I’m happy to overlook the fact that the car is way overpriced? Do people fall for this stuff? They must, because salespeople try it. So I figure it’s time for me to write a column about considering interest rates.

Compare like with like When you’re comparing finance options, it’s important to think about the following things: • What is securing the debt? Unsecured debt is usually the most expensive option. Things can get cheaper if the finance provider can take the asset back. We’re talking cheaper again if you’ve got your house on the line. But are you happy to have your house on the line? • Fees, fees, fees. Establishment, monthly, excess transaction, early repayment, redraw, payout, and the list can go on. They can all add up to make a crazy difference to the real interest rate. Take a chunk out of the interest calculation and charge it as a monthly service fee instead, and you can suddenly quote potential debtors a much cheaper looking rate. • Flexibility. Are you locked in to the same prepayments at the same interest rate for a given period of time, or do you have the flexibility

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to alter your finance arrangement to suit changing circumstances? It might be worth paying a little extra to keep options open? • Can the type of finance being used affect the cost of the asset? For example, there’s really no such thing as ‘interest free’. The phrase really means ‘inflated upfront price so we can afford to sell the debt to a finance company’. Maybe you can negotiate enough of a discount to offset the cost of alternative finance arrangements? • Will your finance arrangement affect other business expenses? For example, if you secure debt with a particular asset, you might be required to maintain an expensive insurance policy over that asset. If you don’t think the insurance is otherwise justifiable, you should take it into account when weighing up your finance costs.

What about comparison rates? The above discussion might have caused the term ‘comparison rate’ to pop into your head. Comparison rates are required to help private consumers compare like with like. Comparison rates are not required for business-related debt. However, I think it’s still relevant to talk about them here since this is a small business column and it’s common for small business owners to use private debt (like an increase on their home loan) to fund business operations. So, if you’re looking at accessing private debt for business needs, then these are some things you need to know about comparison rates: • Comparison rates include fees that are likely to be incurred, like establishment fees and monthly fees. They don’t include fees you might not be charged, like early payout penalties, www.winebiz.com.au

excess transaction or late fees. So you should check these out and consider how they could affect you. • They are worked out over a set timeframe for a set amount. $30,000 over five years is a pretty standard car loan, so that makes for a good comparison rate calculation. But maybe you’re looking at $15,000 over seven years? You should consider how the comparison rate is affected by the amount and timeframe that you plan to borrow over. • If you’re weighing up private debt funding options against business debt options, keep in mind that comparison rates are not required for the business debt options, so you need to be extra careful that you are not comparing oranges and apples.

So, what do you do? My overall recommendation is to let common sense prevail. If possible, ask for all inclusive dollar based quotes over a given time period. That way it doesn’t matter quite so much what the different rates and fees are, you can compare the bottom line effect on your cash flow. In our case, Luke got the ute he wanted. Don’t tell the sales guy, but I’ll admit it is a pretty colour. In terms of finance, I’ll also admit I’m not as pedantic as I could be about chasing down the lowest rate. Far out these things can be labour intensive. I value my time and sanity, so for the sake of a small percentage difference, I’ll happily take the low-doc option. Melanie Reddaway is a chartered accountant and works at The University of Adelaide Business School where she is also undertaking a PhD on the management accounting practices of small and medium-sized wineries. Melanie’s finance and accounting column is published bi-monthly in the Grapegrower & Winemaker. Contact Melanie on email: melanie.reddaway@adelaide.edu.au. April 2012 – Issue 579

Sydney bottling line to cut freight costs A decision from one of Australia’s major wine bottlers to acquire a Sydney facility is aimed at helping its customers reduce freight costs

Winemakers, record keeping need not be a chore With Wine File... • Winery records are easy to create and maintain • Winery records are completely auditable • Additives can be tracked to the material batch level • Augments HACCP/Standard Operating Procedures • Your NZ WSMP record keeping needs are met • You will be using software that is widely used in Australia, New Zealand and the USA These are just some of the reasons why Wine File is the winemaker’s choice for winery record keeping.

Cheers Well done for all your hard work! Now that vintage is almost over, consider mid-year enrolment at Charles Sturt University. Discover what CSU, a leader in wine industry education, has to offer. Take your career further and visit: csu.edu.au/wine

CRICOS 00005F (NSW), 01947G (VIC) and 02960B (ACT). JB F2157A

THEY SAY THEY’RE ‘winemakers bottling for winemakers’, providing services from tank to shelf. But what started as a small mobile bottling business in 1989 and grew to become one of Australia’s main wine services suppliers – with facilities in Melbourne, Perth, Margaret River, Adelaide and Auckland – recently expanded its offering once again. Portavin Integrated Services has upped its services to wineries, particularly on the eastern seaboard, with its purchase of McWilliam’s Wines bottling facility in Sydney. Wine bottling, packaging, dry goods supply, laboratory services, warehousing and storage are among the services offered by Portavin at all its sites, including Sydney – now its largest single operation. The Sydney facility’s largest customer is McWilliam’s Wines, one of Australia’s oldest family wineries which boast 17 brands, including many in New Zealand

NOW MOBILE

www.winefile.com.au sales@winefile.com.au Tel: +61 2 9807 6077 April 2012 – Issue 579

www.csu.edu.au/wine www.winebiz.com.au

Grapegrower & Winemaker

business & technology and all around Australia. The new Portavin Sydney facility offers additional options, not available at other sites, of sparkling wine and spirits production as well as bottling capabilities in glass and “Cheerpack” pouches. Portavin executive director Tony Royal says the McWilliam’s acquisition, which took place in October 2011, has “completed the Australasian footprint”. “We needed to finish our program by having a presence in every major capital city and wine state in Australia and New Zealand, and the Sydney chapter was what we we’re really lacking to completely fill our footprint,” Royal told Grapegrower & Winemaker. “Our model has been to situate ourselves in the capital cities and ensure we bottle in market for that market or for an export market. “Sydney is the number one market

for the consumption of wine. Having a presence in Sydney, that appeals to wineries that sell nationally, the scope is there for some of our clients to now be able to bottle their wine in Perth, Adelaide, Melbourne and Sydney and Auckland, and have their wine consumed in that market. According to Royal, the biggest expense involves moving all finished goods and freighting them back to domestic market, in Melbourne or Sydney, where it’s consumed, or to the ports for export. The cost of freighting wine from the winery to the city was a fraction of the cost of moving the finished product from a regional city to a capital city, he said. “Whatever way you look at it, getting the cost of goods down for our customers by making sure those logistics is right is a pretty critical factor in being competitive. That’s why we haven’t put a Portavin in

the Barossa, Mildura or Griffith... it’s made more sense for us to actually get as close to the water and markets as we can.” Royal estimates wineries from the eastern seaboard – including the Hunter Valley, Mudgee, Griffith and the Riverland – will be able to save $3-5 per dozen moving their wine into Sydney or Melbourne, or $10 or more into Western Australia. But it’s not just money-saving: road freight emissions terms alone, two trips are potentially replaced by one, he said. So far, Portavin Sydney has advanced relationships with about 15-20 new wineries. Royal would not name the wineries for confidentially reasons, but hopes to service 30-50 contract customers at its Sydney facility over the next three years.

appointments & accolades WFA announces new president The Winemakers’ Federation of Australia has announced Tony D’Aloisio, the former chairman of the Australian Securities and Investments Commission, as its new president. D’Aloisio, who is also a director and shareholder in Oakridge Wines, has extensive experience with business and government. Prior to his role with ASIC, he was chief executive and managing director of the Australian Securities Exchange. WFA vice president Robert Hill Smith said the Federation conducted a wide search for a president who could represent at the highest level and provide strong leadership. “Our role is increasingly important as the industry restructures to confront growing global competition and winemakers adapt to changing consumer demand,” Hill Smith said. “We have an important leadership role to play and Tony will be central to that.” D’Aloisio succeeds Barossa winemaker Peter Schulz, whose term expired on 31 March.

Sinclair’s wins silver at tourism awards Adelaide Hills eco-winery Sinclair’s Gully have been placed second at the National Tourism Awards for its sustainable tourism initiatives. Owners Sue and Sean Delaney received a silver medal for the honour last month at the Qantas Australian

88 Grapegrower & Winemaker

Tourism Awards Presentation and gala dinner, held in Cairns. The award tops of a big year for the winery, which has won a number of achievements including the South Australian Qantas award for excellence in sustainable tourism and being inducted into the Hall of Fame at the AdvantageSA Regional Awards. Sinclair’s Gully offer visitors a number of sustainable wine and ecotourism experienced based around their conservation and sustainability message, with the theme ‘Conservation in a Glass’. Among the experiences are wildflower walks in spring and summer twilight tastings.

New appointment at Cooperages 1912 Barossa company Cooperages 1912 has appointed Mark Hayman to the role of oak barrel consultant. Hayman a qualified winemaker has more than 13 years experience in the wine industry in both hands-on winemaking and business development. Cooperages 1912, represents Tonnellerie Quintessence, Heinrich Cooperage & World Cooperage oak barrel brands to Australia & New Zealand. Cooperages 1912 general manager Patrick Schwerdt said the company was thrilled to appoint a person with Hayman’s expertise and experience.

Hunter winery harvest international acclaim

Melbourne Wine Show elects new chairman

Wyndham Estate was last month named best major wine producer in the Tourism Awards 2012 by industry publication, Drinks International magazine. Located on the banks of the Hunter River at Dalwood, Wyndham Estate was established in 1828 and is home to Australia’s first commercial Shiraz vineyard. The award was open to wine producers from around the globe and acknowledges a leading wine producer that has implemented successful tourism initiatives. The site’s public relations and operations manager Stephen GuilbaudOulton said the award “is tribute to the great team at Wyndham Estate and their work to provide an outstanding wine and tourism experience for all visitors”.

The Royal Agricultural Society of Victoria (RASV) has appointed Phil Sexton as the new chairman of the Royal Melbourne Wine Show (RMWS) Committee. Sexton, who has been on the RMWS committee since 2008 replaces Stephen Shelmerdine as chairman who held the reigns for seven years before resigning after last year’s Wine Show, which included awarding the 50th Jimmy Watson Memorial Trophy. Sexton says he is delighted to take on the role of chairing the committee. “The business of winemaking is constantly evolving and it is rewarding to be part of a wine show that listens to industry, takes feedback and is continually working to improve the value it offers wine industry exhibitors.”

www.winebiz.com.au

April 2012 – Issue 579

I.T. & website design

Demystifying content management systems Paul Williams

NEW VISION

solutions

framework. The biggest barrier to entry is that of mistrust or perhaps credibility. Most business owners find it difficult to comprehend that this software is free to use and are somewhat sceptical. However, it’s important to note there are more than 300 commercially available CMS on the market for download. The most popular is Wordpress followed by Joomla. Wordpress is currently used by almost 15 per cent of the internet’s “top 1 million” according to Alexa (one of the leading internet statistics engines); in addition, 22% of all new website use Wordpress and it has been downloaded over 65 million times. If that doesn’t give you confidence in a product then nothing will! Based on these statistics, it makes sense to use WordPress as the example although the other CMS do a similar job. The pros of using WordPress are: • it’s affordable • used widely • search-engine friendly • secure • easy to update • extendable • global support. The cons of using WordPress can be: • no guarantees • your web designer might not like it • not suitable for large e-commerce sites, with more than 1,000,000 products • cannot make the tea • does not predict lotto numbers.

Spreading the word We are all used to Facebook, Twitter, Google+ and other social media tools allowing us to write on our walls or tweet to our hearts content. But is this ‘off-site’

Paul Williams provides consulting via his website www.wbct.com.au and teaches through TAFE in SA and Victoria on small business start-ups, specialising in online marketing and global presence. You can email Paul on: info@winetrailsonline.com.

webDesign experts

Pamaya

identity brand

customer service

advertising

.com.au

April 2012 – Issue 579

social tweeting good for business? Well, yes and no. When we create content for our business, we are doing it for one reason only – to drive more traffic to our own site. So, why do we create content that’s only on Facebook or Twitter and not shared on your website? Now come close and listen carefully, and, shhhhh, don’t tell everyone – otherwise everyone will want it. There is one little plug-in that can be used with WordPress to allow you to write content for your own site and hey presto it appears on your Facebook page and as a Tweet on your Twitter account. This is a big benefit from an SEO (search engine optimisation) point of view, especially in the eyes of Google. The search engine giants now incorporate in their ranking algorithm a test to see if your site links to your social media pages and also if your social media pages backlink to your website pages. Needless to say this plug-in really is a ‘must have’ if you have a WordPress website. Ask your designers/website managers about it. In summary, CMS-based websites, such as WordPress, provide good search engine optimisation (SEO) for free. In addition, it is easy to update text and images on your CMS website without having any coding skills. You can even add more functionality really easily and most of the time for free. So I urge you to go on and give it a try. Express yourself in WordPress!

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CONTENT MANAGED SYSTEMS

It doesn’t seem that long ago that we experienced the world’s first webpage built by Tim Berners-Lee on 6 August 1991. The URL was http://info.cern.ch/ hypertext/WWW/TheProject.html (go on type it in, you know you want to!) So, just over 20 years have passed and the mystique of ‘web design’ and ‘website hosting’ is still almost as prevalent. Website designers still attempt to charge inordinate amounts of money for ‘bespoke’ design and implementation. It seems to make little sense for small- to medium-sized businesses to adopt the route of bespoke or made-to-measure design when there are so many fantastic shared or ‘open source’ products available to download free or at a small cost. Now don’t get me wrong, I’m certainly not suggesting that your web designer is no longer needed or required, quite the contrary; their job is to listen, understand, guide, implement and modify where necessary. This type of website is called a content management system (CMS) and generally comprises of two distinct parts; namely the design aspect and the data or content aspect. In addition, widgets or plug-ins can be installed to provide additional functionality such as galleries, newsletter functions, social media tools, forms, on-line shopping ability etc. Most of these CMS are open-source, which means that they are free to download and use (as long as they are not sold for profit). Your designer will implement the open-source software and may need to modify or even create some additional functionality, which suits your specific needs. Your designer may then choose to make that functionality available to others within the open-source

Grapegrower & Winemaker

business & technology

Export figures support high expectations China, Japan and Singapore top South-East Asia destination for Australian wine Peter Bailey

90 Grapegrower & Winemaker

the past five years is very strong, and the average value per litre is relatively high. In addition, the average value of Australia’s bottled wine exports to China matches the average value for France and was well above that recorded by other major competitors such as Italy, Spain, Chile and the US. The South East Asian destinations of Vietnam, Malaysia, Singapore and Thailand also stand-out – although the volumes are much smaller, all four

2011 ( on the y-axis), the average value per litre in 2011 (on the x-axis), and the volume exported in 2011 (the size of the bubble). The closer the bubble is to the top right-hand corner of the chart, the stronger the performance. The chart illustrates why many view China/Hong Kong as the Asian destination with the greatest potential for the Australian category – the volumes exported are by far the largest in the region, the rate of volume growth over

-0.9% pa

% = 5 year compound annual growth rate

Wine sales (billion litres)

2.2% pa

3.3% pa -0.6% pa

16.5% pa

1.9% pa

Western Europe

North America

Eastern Europe

Latin America

Asia

2011

2010

2009

2008

2007

2006

2011

2010

2009

2008

2007

2006

2011

2010

2009

2008

2007

2006

2011

2010

2009

2008

2007

2006

2011

2010

2009

2008

2007

2006

2011

2010

2009

2008

2007

2006

Australia/New Zealand

Figure 1. Volume of wine sales by region. Source: Euromonitor International.

60% Bottled volume growth, CAGR 2006 to 2011

Asia is the fastest growing region for wine sales in the world. According to Euromonitor International, the volume of wine sales in the region grew by an average of 16.5 per cent per annum between 2006-2011 (see Figure 1). In comparison over the same period, wine sales in Western Europe declined by 0.9% per annum and grew by about 2% per annum in both North America and Australia/New Zealand. However, per capita wine consumption in Asia remains at a relatively low rate of 0.5 litres per person. This compares with Western Europe at 25 litres, Australia/New Zealand with 24 litres and North America with 9 litres. If wine consumption in Asia increased to one bottle per person (i.e., an additional 0.25 litres per person), sales in the region would increase by more than 1 billion litres, holding the population constant. To put this in context, this is roughly the equivalent to the volume of wine produced in Australia in 2011. The Australian wine category is wellpositioned in Asia. Australian bottled exports to the region more than doubled between 2006 and 2011, from 28 million litres to 59 million litres. This represents an annual average growth rate of 16%, which is in line with the overall market growth rate. Furthermore, of the destinations where Australia ships more than one million litres of bottled wine, eight of the ten highest average values per litre were achieved in Asian markets. The three biggest destinations in Asia for Australian bottled wine exports in 2011 were China/Hong Kong (37 million litres), Japan (6 million litres), and Singapore (5 million litres). The three destinations accounted for just over 80% of the volumes exported to the region. Rounding out the top 10 Asian destinations, with relatively smaller volumes, were Malaysia (2.8 million litres), Thailand (2.3 million litres), Taiwan (1.5 million litres), India (1.1 million litres), South Korea (0.8 million litres), and Vietnam (0.5 million litres). Figure 2 contrasts the 10 destinations by three performance measures for Australian bottled wine exports – the compound annual growth rate for volumes exported between 2006 and

Average value for all destinations

50% 40%

China/Hong Kong India

30% 20% Malaysia

Thailand

10%

Singapore

Philippines

Vietnam

0% Japan

-10%

South Korea

Taiwan Province -20% $2.00

$4.00

$6.00

$8.00

$10.00

$12.00

Bottled average value ($/L fob) Figure 2. Australian bottled wine exports by 10 biggest Asian destinations. Source: Wine Australia. www.winebiz.com.au

April 2012 – Issue 579

recorded volume growth over the period and recorded relatively high average values (all at above A$6 per litre). The Philippines recorded volume growth off a very small base but the average value was low in comparison to the other markets, with the exception of India. In contrast, the North East Asian destinations of Japan, South Korea and Taiwan recorded solid average values but volumes declined over the period. India’s average value was the lowest of the 10 destinations (and was lower than the total average value of Australian bottled exports) and the volume was small but the rate of volume growth matched that of China/Hong Kong. The statistics reported in this article highlight some positive signals for the Australian category in Asia, particularly in China/Hong Kong and in South East Asia. However, to determine if the trends translate into profitable opportunities, individual operators may need to conduct additional market research, possibly in conjunction with a visit to the market. Wine Australia’s marketing strategy is aimed at building a stronger perception of the quality, diversity (region, style, place, story) and value in our wines. This is achieved through education programs, key relationship management, and trade focused engagement. Wine Australia has offices established in China, Hong Kong, Japan, and support in Sydney and Adelaide. For more information about the Wine Australia Programs and activities, contact James Gosper, General Manager – Market Development, on 02 9361 1233 or james.gosper@wineaustralia. com Peter Bailey is a senior information analyst and manager of Wine Australia’s Wine Sector Intelligence division. Email: peter.bailey@wineaustralia.com

Chinese have a taste for our quality wines WINE AUSTRALIA BELIEVES new trade figures from China, demonstrate their growing interest and enjoyment of Australian wine. According to the Global Trade Atlas, in the 12 months to the end of January the average price of Australian bottled wine sold in China was just three cents a litre lower than for French wine. The US was in third place, $1.60/litre behind Australia. Wine Australia general manager, market development James Gosper said Australia’s reputation for quality had struck a chord with China’s emerging middle class. “When you consider that France dominates the really top end, where people pay more than $100 a bottle, then to be nearly level on average price is a great achievement,” said Gosper. “The French still lead by quite a way in terms of pure volume of sales, but our focus is on promoting our premium wines rather than entry-level wines so these are encouraging figures.” The three other main providers – Spain, Italy and Chile – sell significantly less in volume and at much lower average prices than Australia. “When you look at figures for all wine imported into China, Australia sells a lower percentage than average at entry-level prices and a higher percentage than the average at premium level and above,” Gosper said. “Wine Australia’s marketing strategy is based around building a stronger perception of the quality, diversity and value in our wines. “As China learns more about wine and wine culture, we are working to be a part of the education process.”

Winemakers bottling for winemakers With ten winemakers working across six sites – now including Sydney – we are close to market and transport hubs, saving time, money and the environment. Portavin - caring for your wine from tank to shelf.

Adelaide Auckland (08) 8447 7555 (09) 582 0090

Margaret River (08) 9755 0500

Melbourne (03) 9584 7344

Perth (08) 9437 1033

Sydney 0419 815 735

www.portavin.com.au portavin@portavin.com.au April 2012 – Issue 579

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Grapegrower & Winemaker

Australian Wine Export Market Snapshot The Australian Wine Export Market Snapshot is prepared by Wine Australia and provides the latest key statistics on exports of Australian wine. Updated monthly, the snapshot looks at the movement in total volume and value

for the past 12 months and then drills down into more detail such as the top five destinations by value growth, movements in container type, colour, winestyle, and price point, and the top five varietal and regional label claims on bottles.

The main purpose of the report is to provide some high-level trends for the Australian wine category. For more information please visit www. wineaustralia.com/winefacts, email to info@ wineaustralia.com or ring 08 8228 2010.

Highlights â&#x20AC;&#x201C; year ended February 2012 Key statistics Total

2012

Change

Volume ML

707

-8%

Value A$M (fob)

1877

-9%

Destinations (by value growth)

$Am

Growth ($Am)

China, Pr

207

Hong Kong

Singapore

Malaysia

Germany, Federal Republic

Container type (by volume)

Fortified, 0.2%

% point change

49%

-3.9

Bulk

50%

4.1

Soft-pack

-0.2

Alternative packaging1

-0.1

% point change

Red

62%

1.0

White

38%

-1.0

% point change

Wine style (by volume) Red still wine

62%

0.8

White still wine

36%

-0.9

Sparkling

0.0

Fortified

0.2%

0.0

Other

0.1%

0.0

% point change

Price points (by volume)

Red still wine, 62% Other, 0.1%

Glass bottle

Still wine by colour (by volume)

Australian wine exports by winestyle

A$2.49/L and under 2

55%

3.3

A$2.50/L to A$4.99/L

35%

-3.9

A$5.00/L to A$7.49/L

0.5

A$7.50/L to A$9.99/L

0.0

A$10.00/L and over

0.2

Sparkling, 2% White still wine, 36%

Top five varietal label claims on bottles (by volume)

Shiraz and Shiraz blends

122

37%

Chardonnay and Chardonnay blends

21%

NOTES & DEFINITIONS

Cabernet Sauvignon and Cabernet Sauvignon blends

18%

Merlot and Merlot blends

Sauvignon Blanc and Sauvignon Blanc blends

Top five regional label claims on bottles (by volume)

South Eastern Australia

213

70%

South Australia

13%

Prepared: March 2012, updated monthly 1 Alternative packaging includes flagon, tetra, PET and other packaging types 2 The growth in this segment is due to growth bulk shipments as more Australian wine is being packaged overseas for a combination of reasons, including economic, environmental and scale rationale together with meeting the requirements of some customers. The change in share represents percentage point change in share between the current twelve month period compared to the preceding 12 month period. Based on data compiled from the AWBC Wine Export Approval System. Average Value ($AUD) calculated on FOB value. Free on Board (FOB) value includes production and other costs up until placement on international carrier but excludes international insurance and transport costs. Data is based on wine shipped from Australia to the country of destination - in some instances, wine is then transshipped to other countries for consumption.

Barossa

2.3%

McLaren Vale

2.1%

Victoria

1.3%

92 Grapegrower & Winemaker

Disclaimer: While Wine Australia makes every effort to ensure the accuracy and currency of information within this report, we accept no responsibility for information, which may later prove to be misrepresented or inaccurate, or reliance placed on that information by readers. Provisions of the Copyright Act 1968 apply to the contents of this publication, all other right reserved. For further copyright authorisation please see the www.wineaustralia.com website

www.winebiz.com.au

April 2012 â&#x20AC;&#x201C; Issue 579

looking forward 2012

looking back

Australia & New Zealand April 18 (JD) Australia’s Wine Industry Design Competition. Surry Hills, NSW. www.boutiquewines.com.au 18 WCA Consumer Insights 2012 – Adelaide. Adelaide, SA. www.winecommunicators.com.au 20 Cullen Wines Sauvignon Blanc Semillon Vertical Tasting. Wilyabrup, Margaret River, WA. www.cullenwines.com.au/events.htm 21 Go Grazing. Mudgee Racecourse, Mudgee, NSW. www.mudgeewine.com.au 21 Great Great Southern Long Table Wine Celebration. Plantagenet District Hall, Mount Barker, WA. www.greatsouthernwine.asn.au 22 A Taste of Good Things - Jazz, Food & Wine Festival. Rhynie, SA. Email: taniamatz@bigpond.com 23 (CD) International Cool Climate Wine Show 2012. Mornington, VIC. www.coolclimatewineshow.org.au 25 Avoca ANZAC Day Races. Avoca Racecourse, Pyrenees Region, VIC. www.avocaraceclub.com 26 April-3 May Tasting Australia. Adelaide, SA. www.tasting-australia.com.au 26-29 Yarra Valley Food & Wine Festival. Yarra Valley, VIC. www.yarravalleyfestival.com.au 28 Upper Goulburn Vintage Celebrations A Day on High. Mansfield, VIC. www.uppergoulburnwine.org.au 29 Muscat of Rutherglen 2 Day Tour. Rutherglen, VIC. Email: davidclarke@sommeliers.com.au 29 Upper Goulburn Vintage Celebrations Long Lunch. Mansfield, VIC. www.uppergoulburnwine.org.au

May 3 #EASTENDWINEDOWN. East End Cellars Lane, Adelaide, SA. www.tasting-australia.com.au

April 2012 – Issue 579

3-5 Agfest Field Days. Bass Highway, between Carrick & Bracknell, TAS. www.agfest.com.au 3 (CD) Royal Agricultural Society of Queensland. 2012 International Wine Show & Mediterranean Challenge. Toowoomba, QLD. www.rasq.com.au 3 Taste of WA. Perth, WA. www.winewa.asn.au 5-6 Bickley Harvest Festival. Bickley Valley, WA. www.kalamundachamber.com 5-6 Grampians Grape Escape - The Food & Wine Festival. Halls Gap, Grampians, VIC. www.grampiansgrapeescape.com.au 5-6 Kellybrook Cider Festival. Wonga Park, Yarra Valley, VIC. www.kellybrookwinery.com.au 6 Langhorne Creek “Geek 2012” Wine Showcase. Langhorne Creek, SA. www.langhornecreek.com

International April 16-27 (JD) International Wine Challenge. London, UK. www.internationalwinechallenge.com 17-20 FHA 2012 (Food & Hotel Asia 2012). Singapore. www.foodnhotelasia.com 17-20 Wine&SpiritsAsia 2012. Singapore. www.winespiritsasia.com 20-22 Salon des Vins à Mâcon. Macon, France. www.concours-des-vins.com 23-25 2012 Wine China Expo. Beijing, China. www.winechinaexpo.com 24-26 ExpoVinis Brasil 2012. Sao Paulo, Brazil. www.exponor.com.br/expovinis 25 (CD) Shanghai International Wine Challenge. Shanghai, China. www.wineshanghai.com CD = closing date JD = judging date PD = presentation date www.winebiz.com.au

We step back in time to see what was happening through the pages of Grapegrower and Winemaker this month 10, 20 and 30 years ago. April 1982 (Annual Technical Issue): An extensive evaluation program of new winegrape cultivars is being conducted throughout South Australia as part of the Vine Improvement Scheme. The grape juice industry, however, is still in its infancy in Australia and cultivars presently used are those that were originally planted for wine production. In 1980, a project financed by the Rural Credits Development Fund began at Loxton Research Centre using the small scale winemaking facilities to evaluate cultivars specifically for use in the production of grape juice.

April 1992 (Annual Technical Issue): In recent years there has been a gradual decrease in wine consumption in Australia with a high of 2.5 litres per capita in 1985-86 to a low of 2.1 litres per capita in 198990. Other factors that could affect wine and spirit consumption and production are stricter drink-driving legislation and the decision by the Federal Government to introduce an excise on wine while reducing the excise on low-alcohol beer.

April 2002: Brian McGuigan has been awarded the Graham Gregory Trophy for his “outstanding contribution” to the Australian wine industry. McGuigan managing director of Brian McGuigan Wines Limited, was presented with a crystal and sterling silver decanter by Len Evans at a function following judging at the 2002 Royal Sydney Wine Show. The trophy is presented annually in honour of the late Graham Gregory, who was leading authority on viticulture in NSW for more than 40 years.

Grapegrower & Winemaker

Marketplace

FOR SALE

VINE GRAFTING

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See www.officinepesce.com PG 94 S1 Price $9,000 plus GST Contact Ken Eckersley on 03-51568241 www.nicholsonriverwinery.com.au

BIRD NETTING

Bruce Gilbert 0428 233 544 Brian Phillips 0417 131 764 fax 03 5025 2321

brucethegrafter@gmail.com www.brucethegrafter.com

• Permanent canopy or throw over net • Fully UV stabilised • Cable, wire and all canopy supplies in stock

Visit our website at: www.otcobirdnet.com.au

Quality Grapevines Paul Wright PO Box 180 Mt Pleasant South Australia 5235 Ph 08 8568 2385 www.vinewright.com.au

ALL FRENCH OAK – $190 each Contact: Brent Treloar 0437 527 512 production@grosset.com.au

MALLEE POINT NURSERY Orders taken for 2012 plantings NOW.

OBLOMOV TRADING CO. PO Box 207, Rozelle, NSW 2039 Phone (02) 9660 6845 Fax (02) 9518 8372 e-mail: sales@otcobirdnet.com.au

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Specialising in Grafted Vines and Rootlings Orders taken for 2012 planting now. Mobile 0428 447 246

Phone 02 6968 1086 Fax 02 6968 1786 Mobile 0428 690 208 PO Box 438, Yenda, NSW 2681 GrapeVine GraftlinGs & rootlinGs • Serving Australian Viticulture for over 50 years. • VINA Accredited Nursery. • Vine Improvement sourced material. • Graftlings & Rootlings supplied as dormant 12 mth old field grown or 4 mth/12 mth old container grown in bio-degradable Plant Bands. • Hot Water Treated. • Trichoderma protected. • Taking orders now for 2012, 2013 & 2014 supply. • We also propagate to order Avocado, Citrus, Olive, Pistachio & Pomegranate trees.

For enquiries please contact Rosanna on

Ph/Fax 02 6964 4288 E-mail: adrografted@bigpond.com

sunraysia nurseries

P.O. Box 45, Sturt Highway, Gol Gol, NSW 2738 ph (03) 5024 8502 • Fax (03) 5024 8551 E-mail: sales@sunraysianurseries.com.au Website: www.sunraysianurseries.com.au

Growing for You Since 1952

Winery Refrigeration

Be ready for the new vintage

24/7 Service

Marketplace

Commercial and Industrial Refrigeration and Air Conditioning Branches in the Barossa (Nuriootpa) and the South East (Penola). Serving Barossa, Adelaide, South East, Riverland, Clare Valley and Mid North.

PH: 08 8562 4885 FAX: 08 8562 1446 Penola (08) 8737 3596 94 Grapegrower & Winemaker

www.winebiz.com.au

April 2012 – Issue 579

WineEng 2012

NATIONAL CONFERENCE & EXHIBITION For further information visit www.wea.org.au or contact Trevor Leighton 0417 597 956 tleighto@bigpond.net.au

BAROSSA VALLEY | JUNE 20 â&#x20AC;&#x201C; 21, 2012

Melbourne

Adelaide

New Zealand

DE-ALCOHOLISATION â&#x20AC;&#x201C;

WHEN ONCE IS ENOUGH!

Winequip is pleased to be able to offer the new JUCLAS ONE STEP Mastermind De-alcoholisation system. MASTERMIND REMOVE is designed with the aim of reducing the alcohol percentage in your wine through direct passage on membrane. Very low pressures are required as the selective membranes only allow alcohol to be passed through the membranes into the extractive solution (water) PLC controlled MMR 50 and 100 provides full automation and ensures the unit can be run without constant supervision and the integrity of the membranes will be protected. Available sizes; 10, 50 and 100Lâ&#x20AC;&#x2122;s of pure alcohol removal/Hr (Larger units available upon request)

w w w. v a s o n . c o m I N N O V A T I V E

W I N E

For further details, contact us on: Melbourne 59 Banbury Rd Reservoir, Victoria Adelaide 12 Hamilton Tce, Newton, South Australia Auckland Unit C, 4 Titoki Place, Albany, Auckland E. sales@winequip.com.au www.winequip.com.au

T E C H N O L O G I E S

Ph. 1300 882 850 Ph. 08 8365 0044 Ph. 0800 699 599