- Table 1. Australian winegrape crush by major varieties
- Table 2. Australian winegrape crush by State and region
- Table 3. Winegrape crush by year
- Table 4. Winegrape production and prices
- Table 5. Winegrape prices by climate
- Table 16. Winegrape varieties used by Australian Wine Producers
Statistics information from The Australian and New Zealand Wine Industry Directory
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After below average vintages across the previous two seasons, the Australian winegrape crush was estimated to be 2.03 million tonnes (see Table 1), the largest ever recorded and representing a remarkable 31% increase when compared to 2020. The 2021 vintage was also 17% above the 10-year long term average of 1.74 million tonnes (Wine Australia). The estimated yield of 14 tonnes per hectare characterised a rewarding year for many growers (see Table 2).
Temperatures during the 2020-2021 growing season were the coolest in a decade due to the La Niña climate pattern, resulting in a temperature of approximately 0.28°C below average. South Australia had its coolest summer in 19 years and Western Australia experienced its coolest in 15 years. Fewer heatwaves and good rainfall at peak times allowed grapes to ripen optimally. This favoured the potential for maximum quality from fruit and reduced the bottlenecks at wineries experienced during recent compressed vintages. The favourable weather conditions, combined with strong grape prices at $701 per tonne (up 1%), allowed many growers to improve incomes after a disappointing low during the previous vintage in 2020 (see Table 2).
All of the most popular red varieties (with the exception of Ruby Cabernet) saw an increase in volumes produced, reaching a combined estimated 1,163,482 tonnes. This represented an annual increase of 37% (see Table 3). The volume of white grapes produced increased by 25% to a reach an estimated 864,910 tonnes. It was only the second time since 2005 that the red crush exceeded 1 million tonnes. Shiraz remained the most popular variety with approximately 538,402 tonnes produced in 2021. There was a significant 41% increase in the volume of Shiraz crushed with growers paid an average value of $878 per tonne (see Table 3. Producers crushed 308,496 tonnes of Cabernet Sauvignon (up 36%) at $787 per tonne (see Table 3).
Despite the strong surge in production levels, the overall average value for red varieties dropped by only 1%, to $846 per tonne (see Table 3). The overall production of white varieties improved by 25% to an estimated total of 864,910 tonnes. This increase coincided with positive strengthening prices; white variety growers were paid an average of $604 per tonne (see Table 3). Among whites, Prosecco experienced the largest increase in tonnage in 2021, up by 53% to 15,785 tonnes, while the variety experienced a 20% surge in average value to $952 per tonne (see Table 3).
Chardonnay remained the most commonly grown white variety, registering a rise of 33% to reach an estimated 385,114 tonnes, at $531 per tonne (see Table 3). While the bumper harvest of red varieties saw their average value drop slightly, whites on the other hand performed positively, with increased production totals and rises in average purchase prices reported for all the major varieties produced in Australia.
Among the states, South Australia remains the largest winegrape producer by volume with 1,055,265 tonnes, comprising 52% of the national crush in 2021. Within SA, the Riverland region contributed 59% of the state’s crop, with a 21% increase to 625,965 tonnes. Eight other SA regions, from the Barossa Valley in the north to Wrattonbully in the south, experienced a doubling of their crushes in 2021. The sizeable increases in these regions dwarfed the contractions that had occurred in the smaller 2020 vintage (see Table 4).
The Murray Darling-Swan Hill region, straddling the Victoria and New South Wales border, remained a substantial contributor to the national crush with 450,267 tonnes processed. This represented 22% of the total volume of winegrapes produced in Australia. Across the rest of NSW, every region recovered from the previous year’s decline in production levels, with the exception of the Mudgee region in the state’s central west. After a 2020 season severely hampered by drought conditions, Gundagai experienced a massive rebound with its crush soaring by 419%, to process 2196 tonnes. Overall, NSW recorded 381,187 tonnes of grapes produced, making up 19% of the national harvest (see Table 4). Meanwhile, NSW producers have also reported a slow recovery from the devastating bushfires that occurred over the summer of 2019-20. However, those in the Hunter Valley, adversely affected by smoke taint in 2020, observed an encouraging 87% rise in the volume of grapes processed across the region.
In Victoria, 84,256 tonnes of fruit were produced in 2021, representing 4% of the national total. The King Valley, Yarra Valley and Heathcote are the largest sources for Victorian winegrapes, with these three regions alone accounting for 52% of the state’s crush by volume. Alpine Valleys, in the state’s north-east, experienced the largest growth of any Victorian region, up from 566 tonnes in 2020 to 3052 tonnes in 2021 (see Table 4).
Western Australia experienced a modest improvement in its production levels in 2021, with 44,935 tonnes processed. This represented 2% of the national crush. The Margaret River region in particular harvested 27,546 tonnes of grapes, with this making up a significant 61% of WA’s total crush. The Swan Valley, near Perth, was the only region in all of Australia that recorded a drop in volume in 2021, with its crush down by 5% to 2709 tonnes. The wine sectors in both Tasmania and Queensland continue to strengthen with 12,110 tonnes and 410 tonnes crushed respectively (see Table 4).
Despite a productive year in 2021, winegrape prices remained competitive though some popular varieties such as Shiraz, Cabernet Sauvignon and Pinot Noir fetched amounts above the overall average grape price (see Table 5).
Australian wine producers advised the Directory that a total of 141 different winegrape varieties were used to produce straight varietal or blended wines over the course of 2021 (see Table 14). New additions in the last year included Cannon Hall Muscat, Italia and Sultana.
Shiraz remained the most common variety being used to make straight varietal or blended wine in Australia, with 63% of producers listing it. The strength of Shiraz is likely to continue with the variety’s average value increase outpacing its nearest rival in the popularity stakes, Chardonnay. The value of Shiraz is now around 65% more than Chardonnay (see Table 5).
All up, 51% of producers listed Chardonnay as a variety used, followed very closely by Cabernet Sauvignon with 50% of producers using this grape. Pinot Noir (32%) and Merlot at 31% accounted for the top five grape varieties used in 2021 (see Table 14).
The attractiveness of red varieties for flavour profiles and higher prices is noticeable amongst Australian growers. The increasing differential between average prices for red and white varieties may also be contributing to a change in the varietal mix. While seasonal factors have had a strong effect, there appears to be a slight downward trend in the overall share of white varieties since this peaked at 50% in 2015 (Wine Australia).
Vintage 2022 and industry outlook
The Australian wine industry’s fruitful 2021 has helped many producers bounce back after the challenging conditions experienced during the two preceding vintages. With lower production recorded in New Zealand (see the New Zealand Wine Industry overview for further details) and lower yields in California (due to drought and wildfires) and France (due to spring frosts and other adverse weather events) it may have been expected that Australian exporters would be in an advantageous position, especially as global supplies are likely to remain constrained well into 2022.
However, a year on from the devastating impact of crippling tariffs placed on Australian wine exports to China, the local industry is now hindered by a global shipping crisis, supply chain disruptions and potential labour shortages amidst ongoing travel restrictions.
As an indication of the wide-reaching impact of the China tariffs on Australian wine producers, there remain only 399 companies continuing to export their products to China. This is down from 2198 Australian exporters recorded in the previous year.
Selling wine is fundamentally a ‘relationship’ business, with winemakers wearing out shoe leather pitching their wines, almost always in a face-to-face context around the globe. Travel restrictions and uncertainties induced by the COVID-19 pandemic have severely hampered efforts to seek new opportunities beyond Australian shores.
With many wineries also operating as tourism businesses, and with the tourism sector hit particularly hard over the last 18-24 months due border closures, lockdowns and quarantine requirements, this further potential source of income for the wine industry has suffered limitations.
With exports to China having ground to a halt, producers of red wines in particular have been bracing for the impact of this on their operations. How the trade dispute is likely to affect winegrape prices locally has been difficult to speculate.
The establishment of new markets will take time, particularly for premium, higher cost wines that were once destined for the Chinese market. For a short period of time, consumers in Australia are likely to benefit from access to premium Australian wine at very competitive price points, as has also been seen in the lobster industry following similar trade restrictions on its produce in China.
One area of potential growth that’s been reported has been in the demand for low and no alcoholic beverages, including wines. This market is expected to double globally by 2031, with one analyst predicting an eventual valuation at US$4.5 billion. With these NOLO products easily accessible at supermarkets, sales are expected to increase rapidly over the next few years. Guidelines have been provided by Wine Australia for NOLO wine products with labelling requirements following the Australia New Zealand Food Standards Code and key export markets.
China’s trade imposts combined with pandemic-related restrictions and related logistical hurdles have thrown up endless challenges to industry operators in 2021. A suite of new hurdles is likely to be presented in 2022, although new opportunities are also likely to arise.
With this volatility and other potential unforeseen disruptions to come, the wine industry is likely to go through a strategic restructure. As this could be intensified by a long-term decline in demand, it may be necessary for producers to pivot and diversify within the industry.
|Total value Australian crush||(A$ billion)||1.11||1.17||1.15||1.56||36%|
|Average purchased grape price||(A$/tonne)||609||664||694||701||1%|
|Exports (year to June)||(ML)||852||801||730||693||-5%|
|Imports (year to October)||(ML)||96||100||102||109||7%|