This document provides an overview of the Australian wine industry and discusses changes and maturity. It notes that while the industry has achieved a level of maturity, changes will continue with factors like climate change, social trends, and evolving consumer preferences reshaping the market. The document examines topics like grape varieties, export markets, consumer segmentation, branding, and how to effectively connect with today's consumers. It advocates continued innovation and understanding consumers to adapt to a changing environment.

1. Change and maturity in the Australian
wine industry
Dr Jim Fortune
R&D Consultant, Adelaide
jfortune@bigpond.net.au
Friday, 28th March 2008
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2. …and how did that first sip taste again?
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3. My caveats
Opinion is the lifeblood of conversation
Inspired by Richard Huntington
Predicting is difficult especially if it concerns
the future.
Anthony Burgmans, Chairman Unilever 2007
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4. General order of presentation
• a bit about diversity
• a bit about the business and factorials
• a bit about finding the consumer
• a bit about the changing environment
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5. Modelling & simulation; some WA & UWA branding & a
great early learning experience for the wine value chain
Stella / iThink MIDAS
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6. About diversity
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7. A quick note on markets – 100+ countries
Domestic Export
~300m l <100m l
~450m l ~790m l
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8. Scale influences grape and wine questions
Markets
National
Catchment
Property
Block
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(Graphics derived from Prof D Pannell)

9. The grapes we grow
Australian grapes - bearing area by variety (ha);
total about 165,000 ha
45000
Shiraz
40000
35000 Chardonnay
30000
Cabernet sauvignon
25000
Top 5 about 70% of production
20000
15000 Merlot
10000 Semillon
5000
0
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10. A quick note on WA
The grapes The wine
Bearing Area Yield (t) Avg yield litres (million) as 9l cases (m) Millions of
(ha) (t/ha) consumers if
avg = 20l/hd
2007 12,200 68,252 5.9 46 5.2 2.3
2006 11,375 60,840 5.7 41 4.6 2.1
2005 11,747 79,948 7.2 54 6.0 2.7
2004 11,068 87,523 8.3 60 6.6 3.0
2003 10,730 62,683 6.3 43 4.7 2.1
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11. Chardonnay – about 25% of fruit .
. .
. Giaconnda . .
. . .
. .
. . .
Stefano Lubiana Kooyong
.
.
Pierro
. CHARDONNAY
Lilleydale
.
Leeuwin Estate
.
Ashbrook .
Jacobs Creek
.
. Moondah Brook .
. Bin 65
Bannockburn
Eileen Hardy Hanwood Estate
.
.
. .
. Tyrells
.
.
. .
.
.
. . Tapanappa Tiers
. .
.
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.
After Brand Tao - Slideshare

12. Age of vines plus experience – an 8 year
journey to best performance?
About 106,000 ha planted from 1994 to 2005
Cumulative new plantings (ha)
100000
80000
60000
Known area
40000 Actual area
20000
0
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13. Business & factorials
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14. The wine business – how we would like to see it
10+ year adventure path
$
I’m making
I’ve got money
a great
idea.
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15. The wine business – how it can be!
10+ year adventure path
$
I’m NOT
I’ve got making
a great money
idea.
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16. The wine business for company X
– a high order factorial
Producing wine (about 10% of Finding consumers
2008 crush)
• 156,000 tonnes
• 35 varieties • 109 m litres wine
• 33 areas • 12 m cases
• 520 growers • 4.4 m consumers*
• 3123 harvest units
• for 104 unique
wines
* At 25 l/ person/yr
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17. Changing analytical needs along the chain
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18. Finding the consumer
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19. Connecting with consumers… some market lessons
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20. Consumer insight – who loves
Australian wine
number of
Litres consumers (if all
Export (million) l/person average)
UK 274.3 17 16,136,734
US 228.2 10 22,816,171
rest 283.8 4 70,950,211
Domestic 437 28 15,607,143
Lots
of
people 125,510,259
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21. Clamoring for space – EU retail
Consumers: 160,000,000
Customers: 89,000,000
Outlets: 170,000
Supermarket formats: 600
Buying desks: 110
Manufacturers: 8,600
Semi-manufacturers: 80,000
Suppliers: 160,000
Farmers/producers: 3,200,000
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22. Consumer Success Stories
• Bottled water
• Prepared salads
• Ice cream
• Yoghurts
• Wine
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23. These categories have
• Been highly innovative
• Tapped into changing lifestyles
• Changed consumers’ views
• Driven consumers upmarket
• Generated profits
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24. What Consumers Want
Increasing interest in wine
Value Flavor
determinant Emotion
80% of your guests want: 20% of Experts want:
• Pleasing wine flavors • Large number of selections
• Range of price points • Rare finds, high scores
• Approachable wine list • To be left alone with the list
• Approachable servers
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25. Some messages & data quite simple -
can they still read your label?
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26. The simple elegance of consumer education
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27. Of frog wines & frowning watches: Semantic
priming, perceptual fluency, and brand evaluation
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(Title from: Labroo et al, J Consumer Research, 2008)

28. 5000
10000
15000
20000
25000
0
Jan-2001
Apr-2001
Jul-2001
Oct-2001
Jan-2002
Apr-2002
Jul-2002
Oct-2002
Jan-2003
Apr-2003
Jul-2003
Oct-2003
Jan-2004
Apr-2004
Jul-2004
Oct-2004
Jan-2005
Apr-2005
Jul-2005
Oct-2005
Jan-2006
Apr-2006
Jul-2006
Oct-2006
(sales in millions litres per month)
Jan-2007
Apr-2007
Jul-2007
Oct-2007
The domestic consumer polygraph
red (1000 l)
white (1000 l)
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29. The real market – US example where about 50%
of sales = 28 brands
( = no of brands in each category; yellow marker in large group ~ 14%)
28
~7000
20 47
60 114
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Impact data, 2005

30. Segmentation…
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31. Brand personalities… a bit more to learn and describe
accessibility
Brand Champions
innovation
Generation Next
∫ interest
.
Regional Heroes
aspiration
Landmark Australia
AWBC 2007
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32. The changing environment
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33. Market change
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34. Climate change
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D.B. Lobell et al. (2006)

35. It works – consumer & commercial
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36. Social change
…the leader is the one who doesn’t drink
(France 2004)
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37. Wine as a unique beverage
I am from the
wide open spaces
of Australia
I would like to join you
Look up flavonoids on with your meal
Google
Nature Health Food
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(Inspired from Leo Burnett)

38. Conclusion – we might have a level of
maturity but hang on for the continuing ride
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39. THANK YOU
Jim Fortune
jfortune@bigpond.net.au
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