Tasmanian Wine

TASMANIAN WINE’S RISING TIDE

How can Tasmania sustain its success in a crowded premium wine market? Adopted local, Winsor Dobbin, investigates.

The past decade has been one of extraordinary growth for Tasmanian wine producers with demand continuing to outstrip supply.

While Tasmania still represents less than 0.5 per cent of the total national wine grape production, it produces 10 per cent of the premium wine segment. And the island state’s cool-climate wines have continued growth potential.

A recent report found the Tasmanian wine sector contributes more than $115 million annually to the state’s economy, placing it in the top 10 incomeproducing sectors.

Now, in what is always a cyclical business, Tasmanian winemakers are looking for ways to ensure their businesses continue to thrive.

“It’s an exciting time of growth in the sector’s relative youth, as we continue to attract global interest in our wines and ever-increasing visitation to our cellar doors,” says long-serving Wine Tasmania chief executive, Sheralee Davies.

The level of investment in the Tasmanian wine sector is well above (in percentage terms) the Australian average and Tasmanian wines have a significantly higher average selling price.

All Tasmanian wine produced is in the niche premium wine sector retailing above $15 or equivalent. This segment represents just 7 per cent of Australia’s total wine production, but 28 per cent of its value. Prices for both Tasmanian grapes and wine are some of the highest nationally.

Tasmania has 160 individual licensed wine producers throughout the state, with close to 2,000 hectares of vineyard. Over the past five years, vineyard plantings in Tasmania have grown by more than 25 per cent and an additional 200+ hectares were planted in 2017-18 by high-profile producers including Nick Glaetzer of Glaetzer-Dixon Family Wines, Kate Hill Wines and Samantha Connew of Stargazer.

Pooley, Milton, Spring Vale, Barringwood, Brown Brothers, Hill Smith Family Vineyards and Gala Estate have all also planted vines recently, reinforcing confidence in the market, along with Duncan Ferguson and Susanna Fernandez, formerly of Cascabel in McLaren Vale, who have planted their Altaness vineyard in the southerly Huon Valley/Channel region, where leading producers include Home Hill, Sailor Seeks Horse, Chatto, Elsewhere and Kate Hill.

Stefano Lubiana has completely refurbished the former Panorama vineyard, while Mewstone was recently named new winery of the year in the James Halliday 2019 awards.

Extra plantings and increased exports are seen by the industry as two key ways to maintain Tasmania’s premium position in the marketplace.

Only five per cent of Tasmanian wines are currently exported overseas but it is a critical sector in terms of positioning and value, says Davies.

“It is important not only in terms of pushing up the value of our wines, but also from a tourism perspective and encouraging people in those markets to actually visit Tasmania,” she said.

Around 15 Tasmanian wineries currently export and sell around 420,000 bottles to markets including Britain, the US, Hong Kong, Japan, China and Singapore. That number is growing led by Josef Chromy, Tamar Ridge, Domaine A (recently purchased by Moorilla), the Shaw +Smith owned Tolpuddle label and sparkling wine producers including Jansz and Clover Hill.

Smaller wineries with a foot in the export market include Holm Oak, Glaetzer-Dixon, Spring Vale and Nocton Vineyard (the latter two with a primary focus on the Chinese market).

Potentially extreme variations in production figures owing to Tasmania’s volatile climate is a challenge facing would-be exporters.

“It is something that we need to be careful about because we don’t want to build up demand and then be unable to meet it,” says Davies. “There would be no point in putting a lot of work into developing markets if we can’t supply them consistently.”

Fortunately, the 2018 vintage was a warm one in Tasmania with a record production of 16,280 tonnes, worth a projected $308 million in revenues.

Dave Milne, sales and marketing manager for Josef Chromy Wines, is cautiously optimistic.

“The next decade will no doubt throw up new challenges and opportunities,” he says. “Careful management of markets and focus on improving

quality and growing price-points will be key to our prosperity.

“Tasmania’s vintage variation in terms of yield is more pronounced than any other region and continuity of supply (and quality) will also be a challenge.

“With more acreage under vine, wineries will need to balance any new plantings with profitability firmly in mind. Growth for the sake of growth has brought many a vigneron undone and losing sight of what has been the key driver for success, quality and demand exceeding supply can be reversed very quickly.

“The Tasmanian industry does very well at supporting each other, and, to borrow a nautical phrase, ‘a rising tide lifts all boats’.”

Bec Duffy, co-owner and winemaker for Holm Oak Wines, says, “The key is to continue driving demand as plantings increase. Wine Tasmania is doing a great job in strategically focusing marketing and promotional efforts to ensure that this happens. The continual investment by more established wine companies in Tasmania also brings additional expertise to the state, and helps to tell the Tasmanian wine story to a wider audience.

“Whilst maintaining and growing both volume and value in the domestic wholesale market is critical for the success of the Tasmanian wine industry in the coming decade, a focus on export markets to increase demand, and direct to consumer markets through cellar doors to enhance profitability is becoming increasingly important.”

Davies says it is important that Tasmania stands out in the global marketplace.

“Key things at this point, and that will be critical factors in future, include being true to our focus, not deviating and being really clear about what we want to achieve,” she says.

She believes there is agreement across the industry that the marketing focus must be on Tasmania first, then Tasmanian wines and then individual producers, although Jim Chatto, chief winemaker for Kreglinger Wines, would like to see a focus on individual regions (see breakout box) as a driver of demand.

“We all know that we have to grow demand - it is about knowing there is a market for the fruit from every vineyard that goes into the ground,” Davies says.

Former Jimmy Watson trophy winner Nick Glaetzer from Glaetzer-Dixon Family Winemakers says, “The next decade has to focus on exports. Sydney and Melbourne are still great markets, though there are plenty of other similarly populated (and cashed-up) cities around the world that need to discover Tasmanian wine.

“Our wines are world-class and we need to make some noise loud enough so that it’s heard far away from this tiny island.” 48|drinks trade

“The Tasmanian wine industry needs to grow up and focus on individual regions,” says Jim Chatto, chief winemaker for Kreglinger (Pipers Brook and Ninth Island) and vigneron at Chatto Wines/Isle Vineyard in the southerly Huon Valley.

There are no official geographic indicators (GIs) right now and the entire island is one appellation.

“We need to come of age and accept that Tasmania is more than one GI,” Chatto says. “Tasmania is a really dynamic place, but the regions are very different. Look at the Huon in the south and Pipers River in the north; they are producing different styles of wine.

“Those differences are part of the story of Tasmanian wine and should be celebrated. They enrich the whole story. Overall, I can see exponential growth and improvement in quality as people choose not only the right vineyard sites, but also the correct grape clones.”