Directions to 2025 – Australian wine answers the call

The recent launch of Directions to 2025 gives Australian wine the best possible chance of emerging in a fit and healthy position after several years in the economic wilderness. Directions to 2025 is the industry’s refocus of the ground-breaking Strategy 2025 document, which brings forward by several years the strategy’s goal of adding value and profitability to the Australian wine sector, is itself an extraordinary achievement.

Simply put, without a significant short-term improvement in the profitability of growing and making wine in this country, the wine industry will fail to be sustainable. Given that the overwhelming majority of Australian wine is now produced by brands that are either publicly owned or else owned by large corporations that are, the consequences if the industry does nothing other than its present approach to business are dire indeed.

A comprehensive business plan for its time, Directions to 2025 seeks to increase the value of the Australian wine business by $4 billion from $26 billion to $30 billion over the next five years. This number is not only considered to be a realistic target – and the document provides plenty of rationalistion behind that – but is seen to represent the industry’s minimal requirement to return to genuine sustainability in present market conditions. This figures is based on achieving an increased wholesale value of $1 per litre indexed across the entire range of price points in the domestic and export markets.

In other words, the industry is doing something very powerful about Australia’s existing overseas reputation as a provider of inexpensive wine. According to Stephen Strachan, chief executive of the Winemakers’ Federation of Australia WFA, Australia is no longer the logical source of the world’s cheapest wine. ‘There is no sustainable future for us with unbranded wine’, he says. The future of our business starts with our brands.’

It is the depth of its analysis and the provision of tools to the industry that makes Directions to 2025 such a compelling document. Directions was compiled as a result of 18 months of research, consultation, data collection and analysis by a 17-member taskforce that was chaired by Kevin McLintock, deputy chairman of McWilliams Wines, and which reported jointly to the Australian Wine and Brandy Corporation AWBC and the WFA. It presents 46 separate strategies that are built around three core themes: anticipating the market, influencing consumer demand and building sustainable success.

The best feature about Directions lies in its ability to directly enhance the sustainability of individual wineries, large and small. Key elements behind Directions are its provision to Australian wine producers through its online Information Resource Kit of extremely detailed market intelligence on a range of key export markets, as well as a unique benchmarking facility for producers. They are now able to benchmark their activities to determine in advance whether or not their own plans and budgets in various markets are likely to lead to success or failure.

Furthermore, the AWBC’s new Wine Australia brand segmentation strategy highlighting the four different personalities and themes of Australian wine – Brand Champions, Generation Next, Regional Heroes and Landmark Australia – will provide a solid basis on which an upward trend in the value of overseas wine sales can be based. It should be equally successful when applied to the domestic market.

Importantly, the industry has decided to rationalise the inefficiencies inherent in its existing organisational, marketing and research structures, and has commenced a process to streamline these essential activities. Directions encompasses this, and deals directly with a renewed commitment to research, development and innovation in general. It also details how the industry is to sustain its growth targets while remaining sensitive to modern concerns relating to environmental performance and social responsibility.

‘Directions to 2025 is not an assessment of how we are performing; it is a business analysis of the best way we can structure our national industry and ensure we deliver the sales increase identified,’ said Kevin McLintock. ‘The key is growth in sales by value in real terms. To achieve these extra sales will require a sector-wide commitment to make it happen, including a significant and visible financial stake, and strong leadership from the organisations owned and managed by the industry.’

For the sake of transparency, Jeremy Oliver wishes to declare that he was involved in the final stages of drafting the Directions to 2025 document and has played a significant role in the introduction of the AWBC’s new marketing strategy to several Asian markets. Please login to post comment