AUSTRALIA: OVERVIEW

Australia is a country steeped in history: It holds the oldest continental crust on Earth, dating to 4.4 billion years ago; its Aboriginal people have the oldest continuous culture on Earth; and the oldest fossils ever found are from rocks in Western Australia.

Yet Australia is no stranger to innovation. It’s home to many inventions and new technology that has changed the world, such as refrigeration and GPS.  Through innovation and bravado, Australia’s wine innovators created a new-world-wine-powerhouse. They may have arrived late to the world of wine, but the party certainly began when they joined in!

I. Wine: A Growth Industry

Today Australia ranks among the world’s most established wine industries, both in terms of production and volume of exports.  But the wine industry did not always play a major role in Australia’s agrarian economy. In 1982, Australia had only 344 wineries with 241,000 acres of vineyard space. By 2005, the country could boast over 2,500 wineries and production had doubled to over 1.5 billion liters. Their export value was estimated to be worth almost three billion dollars.

How did they do it? A concerted effort to increase production began in the 1960s. Historically, Australians were most notable for their production of “stickies”, the local term for sweet wine hyper-charged with spirits. This started to change by the 1970s when, backed by national agricultural grants, artisanal winemakers took a larger role in remaking the image of Australian wine and expanded into new, underdeveloped winegrowing areas. The government support of a dry winemaking style led to the “table wine revolution” of the 1980s.

II. Keys to Success

Aussie winemakers benefit from the vast breadth of microclimates in this large island country. They have capitalized on natural bounty by becoming masters of matching noble varieties to unique terroir. The Australians experimented with Riesling and Pinot Noir in cool climate areas and Semillon, Syrah, Merlot, and Cabernet Sauvignon in warmer areas.

Eventually, Syrah, coined “Shiraz” by an ampelographer who mistakenly thought the French grape may have originated in Persia, came to dominate the market. It is the prototype of Australian wine: fruity, spicy, and bold.

The University of Adelaide anchors the country’s most important wine region, South Australia, and is known worldwide for its top-ranking oenology program. Australians pioneered the “flying winemaker” concept by developing sophisticated viticultural techniques and introducing them to the wine regions of the Northern Hemisphere. These winemakers are known for exacting attention to detail, cleanliness, and a willingness to embrace mechanization. Backed by a deep knowledge of organic chemistry and agricultural technology, these winemakers are able to problem-solve at all stages of the winemaking process. The result: consistently delicious wine year after year.

In fact, the Aussies invented the “Stelvin Enclosure”, the screw cap mechanism for wine bottles, to prevent spoilage from TCA infection. Most recently, they perfected the process for creating aluminum cans for easy drinking sips such as rosé.

Finally, a snapshot of the Australian wine industry would not be complete without discussing its marketing acumen. Just as France served as a model for California in the 1970s, the Australians mimicked California’s consumer-friendly outlook in the 1980s. Wineries telescoped the New World practices of varietal labeling, eye-catching graphics, and easy-to-understand language on the label. The result: Australia became the hottest new wine region in the world.

III. The Road Ahead

Notwithstanding its enormous success, the Australian wine market now faces significant hurdles. For one, there is an overabundance of production, a consequence of massive consolidations by the most successful winery owners. Today most winemaking is a top-down enterprise, driven by management teams and shareholder interests. As a result, the government has curtailed substantial grants for winemaking and may even put in place a mandatory “vine pull” for Australia’s more glutted wine regions.

Australia is also suffering from what is now known as the Yellowtail-effect: an inability to market high-end wines after consumers have become accustomed to value-priced wines. From megaproducers to small, artisanal growers, each segment of the industry is feeling the effects as sales have dropped precipitously.

Compounding the issue is a problem not unique to Australia: climate change. How will this affect Australia specifically? As regions experience incremental warming, some varieties may prove less suitable for their present sites. Those wine regions could lose their distinctive characteristics, such as the sturdiness of Riesling from the Clare Valley or long-lived Semillon from Hunter Valley. Moreover, most of Australian soil lacks arability. Newer areas that could withstand climatic changes would have to be developed from scratch, necessitating a major shift in investment and capital resources.