The latest retail data from IRI MarketEdge indicates that while the volume of wine sold in the Australian off-trade market has declined over the past two years, value has increased. In other words, while Australians are consuming less, they are spending more.
In the two years ended 5 January 2020, the value of wine sales in Australia increased by 2 per cent while the volume declined by 2 per cent. This trend is supported by data from the International Wine and Spirit Record that shows that that average price spent on a bottle of still wine in Australia increased by an average rate of 2 per cent per annum between 2014 and 2018. Wine Intelligence research also shows that regular Australian wine drinkers are spending more across all off- and on-premise occasions (see Figure 1).
Figure 1: Spend on wine per bottle by occasion by regular Australian wine drinkers
Source: Wine Intelligence, Australian Landscapes August 2019
Figure 2 illustrates that in the off-trade market, the decline in volume is coming at below $10 per bottle while there is growth in all price points $10 and above. The share of sales below $10 has fallen from 61 per cent to 58 per cent over the past 2 years. Growth has been strongest at $15–19.99 and $20–29.99, with sales in each segment up 9 per cent over the past 2 years.
Figure 2: Volume of wine sales in the Australian off-trade market (‘000 litres)
Source: IRI Market Edge
Australian wine held a 79 per cent value and 87 per cent volume share of total sales in the off-trade market. Australian sales grew 2 per cent in value and declined 3 per cent in volume over the 2 years. In contrast, imported wine sales grew 3 per cent in value and 1 per cent in volume. Consequently, while the value share of imported wine increased only marginally, the volume share increased from 12 per cent to 13 per cent.
New Zealand remains the number one imported category. However, over the 2 years, sales declined by 3 per cent in value and 4 per cent in volume. France was the major growth driverin the imported wine category. Sales of French wines increased by 10 per cent in value and 18 per cent in volume.
Shiraz has overtaken Sauvignon Blanc has the number one selling variety by value (see Figure 2). Shiraz sales grew by 9 per cent over the period while Sauvignon Blanc sales declined by 5 per cent. For both categories, the $15–19.99 price point is the biggest segment by value – 27 per cent of Shiraz sales and 33 per cent of Sauvignon Blanc sales. While Shiraz sales in the segment increased by 7 per cent, Sauvignon Blanc sales declined by 13 per cent.
There were mixed results for the other categories in the top five. Chardonnay sales declined by 2 per cent, Cabernet Sauvignon sales increased by 5 per cent and Sparkling white sales declined by 6 per cent.
Categories outside the top 5 showing solid growth include Pinot Noir (up 17 per cent), rosé (up 56 per cent), Prosecco (up 73 per cent), Pinot Grigio (up 15 per cent), Pinot Gris (up 31 per cent) and Grenache (up 20 per cent).
Figure 3: Top five categories by value in the Australian off-trade market ($ ‘000)
Source: IRI MarketEdge