11 December 2017 – UK retailers looking to secure more supplies of Australian wines will be boosted by the news that volumes are on the increase and the UK remains the biggest market for Australian wine. With increasing interest from China and the USA in this market, UK retailers may need to think about new supplies and partners to retain their supplies in 2018. There are now smaller winegrowers in the country offering stock and consolidation is one of the options many are looking at to reach newer markets in the UK.
In the last 12 months (to September 2017) 225 million litres of Australian wine were exported to the UK – more than to any other market. The increasing interest from Chinese consumers in Australian wine – it increased by 42% in the 12 months to October 2017 – will mean an increasing pressure on exports which could impact UK wine retailers.
The Australian National Vintage Report 2017 suggests volumes are slightly up this year compared to 2016 but while exports to the UK remain healthy currently, China has become Australia’s most valuable wine market. Steve Wood, managing director of Kukla UK, sees this as a potential bump in the road for some UK retailers.
“Recent figures from the Australian wine sector show that the value of exports to the UK dropped by 3% but the UK still remains its biggest volume importer taking around 28% of the country’s total exports. With the 2017 vintage being better than the previous year’s, things still look very comfortable for exports although there is no complacency in the sector. The UK demand for Australian wine remains strong and behind the scenes there are new developments that could grow the market substantially.”
Red wine varieties account for nearly 75% of Australia’s export value and Chinese consumers have a real liking for red wine and it accounts for more than 90% of imports. UK retailers looking to source new varieties of Australian wines and maintain supplies should be looking at some of the new areas being developed in the region. Smaller Australian winegrowers are continually looking for a wider global market but are inhibited by their scale and volume of wine production. While the primary wine growing areas of Victoria and South Australia remain as full load options for UK retailers, the choice of consolidated services can open up smaller growers and suppliers to the UK supply chain.
Among the benefits of consolidation are reduced lead times, reduced UK stock holding and greater flexibility for shipment times and solutions. The possibilities for stock replenishment for UK retailers will vary according to demand and choice of full loads or consolidation. Smaller stock shipments can help UK retailers reduce buffer stock holdings and this will also open up the growing number of new wine producers to UK retailers.
Producers are increasingly looking at cooler and higher altitude sites bringing out new wines from Queensland, New South Wales and Victoria to meet demand and interest in cooler climate wines that benefit from the rich volcanic soils. These new regions are now producing Cabernet Sauvignon, Shiraz, Chardonnay and Viognier and opening up new possibilities for UK retailers.
“Australian wines continue to grow in export volume and UK retailers have the potential to reach out to new producers in these developing regions to secure supplies of established and newer variety wines,” according to Steve Wood. “This is an excellent time to talk to new producers and Kukla UK has strong logistics partnerships across the region to help those retailers overcome their logistics’ challenges when securing their current and future wine supplies. As the Chinese and North American markets continue to grow there will be greater interest in the main wine areas but in 2018 it will benefit UK retailers to look more closely at their suppliers and supply chain to ensure they can meet the UK demand for wines from Australia.”
