This is a five point summary of actions that I believe to be critical to the success of the Australia wine brand during the next five years.
1. Acknowledge that there is a problem.
There are still, in my view, far too many people in high ranking positions within the Australian wine sector either denying that there is a problem or saying that they don’t know what the problem is. The issues are clear, obvious, and should be well understood by anyone seeking to play a leadership role within the industry.
2. Stop claiming that Australia makes “the best wine in the world”.
No one that the AWGA is seeking to influence is going to give that statement any credence. Australia does make the best wines in the world across a range of styles, it can make the best wines in the world across a broader range of styles and it absolutely cannot and will not make the best wines in the world across other styles.
We need to play to our strengths. We need to be constantly benchmarking and developing styles that can be globally competitive. We need to communicate that in a way that demonstrates self-knowledge in order to be taken seriously.
3. Restructure the WFA
The National peak body’s primary concern must be the long term sales and marketing strategy for the Australian wine brand. By subjugating this task to what is now the Australian Wine Grape Authority (a ridiculous name for a marketing organisation if ever there was one) the Australia wine industry peak organisation has been left rudderless for the last 15 years focused on policy and politics rather than developing a well-informed vision for a globally competitive wine industry.
For example – Why is so much time, effort and levy payers money being wasted chasing New Zealand for $25Million in WET rebates (equivalent to 0.6% of revenue for NZ wine companies turning over more than $20Million and just 1.6% of revenue for companies turning over $10-20 Million, according to Deloitte) when;
a) This is not going to happen due to the CER agreement
b) It does not represent a freckle on a speed hump to a $1.3Billion export business and
c) All that time and energy could have been used to think about selling more wine
The reason why New Zealand Winegrowers, The Austrian Wine Marketing Board and other national peak bodies that I work with are so much more successful is that their sales, marketing and long term country brand health strategies are forever at the forefront and the absolute focus of their energies.
4. Develop an “upside down” support model
The fastest growing and most profitable part of the market is and always has been the most premium. The Australian wine brand and its long term health will absolutely be determined from always getting the best quality wine in front of most appreciative and influential audience.
The Australian wine industry’s biggest challenge is the structure of it. No other major wine producing country is so bottom heavy in terms of a small number of large companies’ capacity to dominate the export offer. The WET rebate has exacerbated this situation through providing a disincentive to export. Markets and opportunity will constantly be evolving away from us unless the industry is united in somehow interrupting this.
For example – Even at Savour which, in my view, was one of the best wine events globally in recent years, the cost of participation meant that big companies dominated and interstate wineries stayed away. This has to be turned on its head. There should be an objective, fair and open system whereby those wineries gaining the best international critical acclaim are subsidised to participate in the key image building events.
5. Provide education as to the best opportunities, the best paths to market and the best business operating models for the various wine business types.
This is a very complex business and without great clarity as to how play, wine industry participants risk getting in each other’s way rather than helping each other to succeed. Companies of all sizes lack deep understanding of their role, the role of different sized players and how to play as a team. That, in the end, is the real challenge and opportunity for the Australian wine industry’s leadership.