Where to Now?

The Australian Wine Industry’s vine plantings (not to mention McLaren Vale’s) has climbed to what seems to be massive proportions. However this perception must be placed into perspective and an understanding of the market place analysed.

The supply-demand ratio is one, which winemakers and viticulturists continually discuss and with an equalising of the ratios this year, the 2002 vintage has seen grape prices fall for some varieties and grapes left on the vine to rot in some regions.

This is a real concern for individual growers and wineries alike.

This season we have seen very high prices for excellent fruit, in particular Shiraz, which is very well suited to the McLaren Vale macroclimate and is in demand internationally and domestically.

In contrast we have seen average prices for most varieties and very low prices for poor fruit, with penalties applied for fruit not grown to specification.

This is the concern for individual growers and the region in general as we must raise the bar in order to perform at the highest professional standard.

This will ensure domestic sales grow slowly (in line with population per capita) and that international markets are maintained in the UK and USA, whilst new opportunities are opened up in the Asia/Pacific region.

Whilst this is occurring, efforts to learn new techniques and be innovative in viticulture are currently heading the agenda. Recently industry bodies have provided increased funding for research, which has seen promising results, in particular with Research to Practice workshops. McLaren Vale grapegrowing and winemaking bodies and companies are continually working towards ensuring the sustainability of the McLaren Vale brand and equally efforts from a winemaking and viticultural perspective ensuring the best product is being produced.

The next three years will be interesting to say the least, as companies look to stabilise and capitalise on the growth of the mid 90’s. As we have already seen with some medium sized companies, the takeover or merger can be promising or demoralising, as the industry corporatises itself.

Final comments and thoughts are to improve the marketability of our vineyards through professional management, whilst always looking to have the edge both locally and regionally. The channels of communication through vineyard, to winery to the market place must be continued and, conversely, discussions surrounding quality, quantity and supply/demand are so very important today. We have recently experienced the big five Australian wine companies purchasing fruit for certain products at certain price points which has had adverse affects on grape prices, and subsequently vineyard management practices which have led to caps on vineyard yield. From the “big five” we will see a domino affect in relation to this area from the medium to small sized companies.

In some ways we need to analyse the growth of the mid 90’s, learn from its impact from an environmental and investment point of view and ensure that stabilisation occurs throughout, in readiness for the next surge of industry plantings. After all, the Australian Wine Industry only services some 4-5% of the world wine market so there is much room for future expansion.

My recommendation is to stabilise, audit practices and seek to improve so that sustainability is achieved whilst looking to expand in areas of our business that have been neglected through the large scale expansion of the 90’s.