Australian wines not 'broken' in off-trade, but on-trade is a challenge, says Accolade

By Erin Smith

Published: 27 January, 2015

Accolade Wines has defended Australia's wine industry which has been struggling in the UK over the past couple of years, saying the off-trade is back in growth, although the on-trade remains a challenge.

Paul Schaafsma Paul Schaafsma

"Australia is definitely not broken," said Paul Schaafsma, general manager of UK and Ireland for Accolade Wines, speaking ahead of today's Australia Day Tasting in London.

Jane Robertson, category development controller at Accolade Wines, agreed: "There may have been a bit of chatter, but Australia is not a problem. It is a £1 billion category," she said.

Quoting Nielsen figures for 2014, Accolade highlighted that the off-trade is performing particularly well for Australia at the moment. It is still the number one origin category for consumers in the UK off-trade - and has been for five consecutive years. What's more, the figures show Australia accounts for 21% of the market share by value and volume.

Over 211 million bottles of Australian wine were sold last year and volume is up 1.8% and value is up 2% year-on-year, according to Robertson.

UK consumers spend more money on Australian wine than any other country, according to Kantar data. Annual spend by shoppers for Australian wine is £95.77 per year, which is nearly a third higher than South Africa which comes in second place. South Africa's annual spend amongst shoppers is £68.48 per year in the off-trade.

"It is quite exciting times for us," said Schaafsma.

Globally the Australian category has also benefited from a strong domestic market as well. "With absolute certainty at-home consumption is healthy," said Robertson.

Accolade Wines has secured million of cross-border finance from GE Capital International.

"We have seen great growth for Australian wine compared to the wine category as a whole, which is in decline. We have both volume and value growth, which is indicative of healthy growth," said Robertson.

Over Christmas - for the 12 weeks to January 3, 2015 - Australian wine proved popular with consumers, growing 23.7% versus the prior quarter and 4.9% over the same period last year.

"We have seen a 12.4% growth for our number one brand Hardy's over Christmas which is quite significant," said Schaafsma.

The on-trade however is where the Australian category as whole continues to struggle. Both volume and value have declined in the past year. Volume in the on-trade for Australian wines has declined by -5.2% year on year and value has declined by -2.5% during the same period.

Competing in the on-trade with old world wines is where Australia has not yet been able to convince consumers. Australia is in third place behind both France and Italy, according to recent CGA data.

Robertson said: "Where it has lost share is to France."

But Robertson sees the challenge as a great opportunity for growth for Australian wines. "This is where Australian wines have an opportunity. We need to better communicate the breadth of wines that Australia can offer," she added.

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