Premiumisation trend sees Australian exports of higher priced wines jump by nearly a quarter
Premiumisation is arguably the drink sector's most significant trend, according to Wine Australia, with most global markets seeing consumers trading up to higher value products.
And the wine market is no exception, with Australian wine producers quick off the market in exploiting the premiumisation trend in both their domestic and export markets. According to IRI Market Edge liquor figures for the domestic off-trade market, Australian wine sales at below $10 per bottle dipped by 1%, while sales above this price increased by 8 per cent in the 12 months ended 2 July 2017.
This trend is particularly apparent for Shiraz, where 80% of volume growth was at $10 per bottle and above, compared with Sauvignon Blanc, where 85 per cent of growth was wines below $10 per bottle.
There has also been strong growth in exports of higher priced Australian wines. Exports at $10 or more per litre increased by 23% to a record $672 million in the 12 months ended September 2017.
In developing markets, such as China, premiumisation has largely been due to the emergence of an aspirational middle class seeking to assert its status. By contrast, economic downturns have reined in the impact of premiumisation in some regions; particularly in Eastern Europe, Latin America and parts of Africa.
Driving the trend in more developed markets such as the US and Australia have been increasingly engaged consumers keen to explore new and interesting products. Wine Intelligence has predicted that growth in the US wine market in the next year will come from those wines priced at US$15 or more per bottle price segment. And other research conducted on behalf of Wine Australia backs this up. When considering adding new wines to their portfolios, interest among the US wine trade was keenest in the US$15–25 price segment.