The Changing Face of Australian Wine Retail

A snapshot of the current Australian wine market shows that a small number of very large makers dominate the offerings of the major retailers. The consolidation of wine retail into two major camps, Coles Myer and Woolworths, doesn’t make it any easier for the hundreds of small wineries trying to get over the retail threshold. There is also a bottleneck in the wholesale area, which prevents many small wineries from even being able to approach retailers and restaurateurs on a broad-scale basis.

Medium-sized and small wineries have to market their wine like never before. They need to get creative about how they develop their mailing lists, wine clubs and loyalty programs. Some are even setting up cellar-doors inside the major cities.

No longer can small producers shrug off the difficulties associated with retail representation by aiming to conduct most of their business via the cellar door. Twenty years ago, this might have been a viable proposition, but since then the wine tourist dollar has been diluted many times over with the proliferation of cellar doors, all of which are competing for the same dollar.

The last two years have seen dramatic changes in the physical nature of the Australian wine market. The wine glut has spawned new kinds of wine retailers – cleanskin specialists and clearance warehouses. The cleanskin specialists, who already include several different franchise chains, market wines sold under their own labels, usually making some identification concerning region, variety and vintage. My opinion on their offerings is that while every now and again a cleanskin wine will offer tremendous quality for its price, it really is a very badly regulated section of the market that represents little more than a lucky dip. It is the perfect example of ‘Buyer Beware’.

The clearance warehouses, several of which operate powerful Internet sites, are to me a little like the vinous equivalent of palliative care. Discontinued brands, batches that were destined for export but never made it across the water, liquidated stocks, end of runs of vintages – these are the wines that populate these stores. The key point of difference from the cleanskin specialists is that at least these wines have genuine labels and brands, no matter how obscure they might be. This gives these wines a measure of accountability I do not find with cleanskin wine. And, while these stores do stock wines from the medium-sized and large makers, much of the stock I have personally seen is aged beyond the point of viable superannuation.

Nearby my home in Camberwell, Melbourne, is an in vivo model of the wine retail trade today. Down Burke Road is a Vintage Cellars, the upmarket Coles Myer retail brand whose wines are still chosen by a tasting process. It’s a relatively small and inconspicuous shop whose comparatively wide range includes a small number of proprietary brands and a healthy representation of Australia’s most important large and small producers.

Up the hill is another small shop, one of the two physical outlets operated by the boutique specialist internet retailer, Cloudwine. You can go in here and hardly find a single bottle represented by the major outlets. While there are some cheaper wines on the floor, prices are fairly high as they reflect the scarcity and handcrafted nature of many of the offerings.

Around the back of the main shopping centre is an outlet operated by one of the several cleanskin franchises. It’s generally a busy place, from which I can only infer that many wine drinkers don’t care what’s on the label, or even in the bottle. As I’ve suggested earlier, while you can get a great cheap bargain as a cleanskin, the concept is just a lucky dip. Besides, I’m still baffled as to how wine can be sold this way – who is actually policing and testing the claims made on the labels of these wines in relation to region and variety?

Finally, across Camberwell junction in a large building that was until recently a hardware store, there will shortly appear a major Dan Murphy’s outlet. One assumes it will offer the standard recipe of heavily discounted floor stacks of large to medium-sized producer wine, with a delineated fine wine area. It will be fascinating to watch the battle between these wine stores, each of which presents an entirely different proposition to its customers, and each of which communicates its message in a genuinely different fashion.

The change that is beginning to sweep over the larger chains, which account for a steadily increasing proportion of overall wine sales, is their European-style adoption of buyers’ own brands. Most of the larger chains have operated their own brands for some time, but in a relatively small way. It stands to reason that any growth of buyers’ own brands will come at the expense of existing brands. The further these brands proliferate, into labels that identify specific regions and varieties, the harder still it will become for the small producers to challenge for shelf-space.

Like everything else, retail goes in cycles. Most of the small, boutique-style wine retailers in Australia are no longer in business. Perhaps the time is nigh when retailers will recognise the opportunities presented by a more old-fashioned business model that includes a wide and diverse range from makers large and small, a well-trained staff and a high level of personal service? Personally, I doubt there will ever be a better time to follow such an approach than right now. Please login to post comment