Viticulture

Viticultural Information

Statistics information from The Australian and New Zealand Wine Industry Directory
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Vintage 2020

Australian producers crushed a total of 1.52 million tonnes of grapes in 2020 (see Table 1). This was 12% less than the previous year and 13% below the 10-year average of 1.75 million tonnes, according to Wine Australia. Such a small crop had not been seen since 2007 (see Table 3), but the quality of the crop was reported to have been exceptional. The smaller vintage was attributed to widespread  dry conditions around the country, the 2019/20 summer bushfires which caused some smoke damage, as well as isolated frost, hail and flood events in some parts of the country throughout the year.

However, a very tough start to the season was compensated for with ideal ripening and harvesting conditions and mild or slighter cooler autumn temperatures. Winegrape growers reported more concentrated colours and flavours in fruit.

The total value of the 2020 Australian winegrape crush was estimated to be $1.07 billion, meaning the average value of each tonne of grapes harvested was $694, compared with $663 in 2019 (see Snapshot, see page i).

The red crush declined 1% to reach an estimated 836,462 tonnes, while the white crush decreased by 12% for a final estimated 684,146 tonnes in 2020 (see Table 1). An estimated 375,618 tonnes of Shiraz — the country’s most popular variety — were harvested, a drop of 10% compared to 2019. The price of the variety remained strong with an increase of 2% to $921 per tonne (see Table 1). Among the other reds, Durif and Ruby Cabernet rose 10% and 9%, respectively. However, Pinot Noir and Merlot saw falls of 24% and 19%, respectively (see Table 1). The smaller vintage pushed the price of red grapes to an average of $857 per tonne, representing an overall 7% surge for all red varieties.

Well and truly holding firm as the nation’s most crushed white variety, the volume of Chardonnay processed fell by 19%, totalling 285,204 tonnes in 2020. The average price was $477 per tonne (an increase of 3%) for the variety (see Table 1). Riesling fell by 28% to a 20-year low of 16,819 tonnes crushed. Almost all the white varieties saw reductions in volume with the exception of Prosecco which saw a modest 3% increase to total 10,188 tonnes. The average overall price of white grapes also experienced an increase, up 5% to $547 per tonne (Table 1).

The crush from the warm inland regions (Riverina, Murray Darling-Swan Hill and Riverland) contributed 79% of Australia’s total vintage in 2020 (up 6%), with 1.29 million tonnes of winegrapes harvested from these three regions (see Table 2). The increased yields in the warm inland regions were attributed to extensive research and investments, including improvements to vineyard management techniques.

Despite the 2019/20 summer bushfires reportedly affecting up to one-quarter of winegrowing regions, Wine Australia estimated that the overall reduction in the harvest due to fire and/or smoke damage was less than 40,000 tonnes (3%) of the total national crush (Wine Australia, July 2020).

South Australia contributed 47% of the national crush with 719,712 tonnes. Most regions in SA experienced a decline, with the exception of Currency Creek which saw a 2% rise (see Table 2). The Riverland contributed 71% of the overall South Australian winegrape crop with 509,931 tonnes, the region recording a small annual drop of 2%. Other important regions such as McLaren Vale, Barossa Valley, Coonawarra and Langhorne Creek contributed a further combined 119,747 tonnes after a significantly smaller vintage in 2020. Padthaway experienced the largest contraction in SA of 56% compared with 2019, producing 18,157 tonnes (see Table 2).

The Murray Darling–Swan Hill region was the only region in the country that maintained the size of its winegrape harvest, with its 387,315 tonnes contributing 25% of the national crush (see Table 2). In New South Wales, the overall crush (excluding Murray Darling-Swan Hill) was reduced by 10% with regions such as Gundagai, Orange, Hunter Valley and Hilltops experiencing large declines. The state produced 317,092 tonnes of fruit, contributing 21% to the national crush (see Table 2). The Hunter Valley region had to abandon most of its crop due to smoke damage caused by the summer bushfires.

Victorian growers produced 49,667 tonnes of winegrapes (excluding Murray Darling-Swan Hill), a substantial drop of 36% from 2019. All regions in Victoria reported smaller yields, with an average state-wide reduction of around 30%. Queensland saw the biggest drop in the country with a massive 80% reduction due to significant drought conditions. This resulted in the production of only 191 tonnes of winegrapes in the state. Western Australia was the only state in the country that reported an overall increase in the 2020 vintage, with a rise of 4% for a total of 36,502 tonnes (see Table 2). Margaret River continued to increase its production with an annual rise in volume of 5% (to 23,553 tonnes) in 2020. Great Southern and Geographe regions also improved volumes, with both experiencing growth of 20% in 2020 (see Table 2).

The weighted average purchase price of grapes from cool climate regions was $1515 per tonne (an increase of 10%), while warm inland crops were priced 12% higher compared to the previous year to set a new record of $532 per tonne (see Table 4). Continuing strong demand for Australian reds within the global market remains the main factor in the disparity between the average purchase prices of red and white grapes. Growers are also increasingly favouring red varieties with four out of the top five varieties planted being listed as red (see Table 16).

Further insights into winegrape prices for some of the most popular varieties in Australia can be seen in Table 5. For red varieties, Nero d’Avola grapes produced in cooler climates fetched the highest price of $2301 per tonne. The same variety from warm inland regions also commanded a respectable $888 per tonne in 2020 (see
Table 5). Shiraz, the most commonly grown red variety (see Table 16), was sold for $1802 per tonne from cooler regions, or $674 per tonne from warm inland areas. Growers of the next two most commonly produced varieties of Cabernet Sauvignon and Pinot Noir were also rewarded with above overall average prices of $1609 per tonne and $1949 per tonne, respectively, from the cool/temperature regions (see Table 5).

Among white grapes, Grüner Veltliner reaped the highest average price from both cool and warm climates, Grüner Veltliner crops grown in cooler regions sold for an average of $2000 per tonne, while those from warmer regions were sold for $1088 per tonne (see Table 5). Overall, white grapes were typically sold for an average of $1135 per tonne (from cool regions) and $397 per tonne (from warm regions). Chardonnay earned a weighted average of $1177 per tonne (from cool regions) and $402 per tonne (from warm regions) (see Table 5). An increase in the  average price across the most commonly-cultivated white varieties reflects the smaller vintage in 2020.

Grape varieties

Australian wine producers advised the Wine Industry Directory that they used 156 winegrape varieties to produce straight varietal or blended wines over the course of 2020 (see Table 6). This number remained largely unchanged from the previous year. Malvasia Blanco is an added variety for the 2021 Directory.

Shiraz remained the most common variety being made as a straight varietal or blended wine, with 57% of producers listing it. Chardonnay was the next most popular variety (46%), followed closely by Cabernet Sauvignon with 44% of producers using the variety. Pinot Noir (29%) and Merlot at 28% round out the top five winegrape varieties used (see Table 16).

The higher prices achieved for red varieties may explain their prevalence amongst Australian growers. The increasing differential between the average prices for red and white grapes may also be contributing to a change in the varietal mix. While seasonal factors have a strong effect, there appears to be a slight downward trend in the share of white varieties since it peaked at 50% in 2015 (Wine Australia, Market Bulletin 209, 07 July 2020).

Vintage 2021 and industry outlook

Wine Australia’s market bulletin released in December 2020 reported that the vintage across the northern hemisphere in 2020 was consistent with the overall five-year average, while producers in the southern hemisphere had generally smaller crops. Overall, global wine production in 2020 was estimated at 26.3 billion litres, 1% up on 2019 but 2% below the 5-year average. The lower production was viewed as positive, with international markets at this time still experiencing a high degree of uncertainty due to ongoing pandemic lockdowns (especially in Europe) and trade tensions.

Tariffs on Australian bottled wines announced by the Chinese Government in late 2020 were viewed at the time as likely to place downward pressure on prices, particularly for red wines. Exports to China of higher-priced wine products were seen as potentially better positioned to absorb these tariffs as they are less price sensitive. However, some Australian exporters were looking at alternative avenues for exports, including diverting products into Hong Kong where there are no tariffs. The value of wine shipped to Hong Kong in December 2020 was $40 million compared with $9 million in December the previous year. The number of exporters to the territory also increased to 109 compared with 72 in December 2019 (Market Update 231, Wine Australia, 3 February 2020).

With tensions unlikely to ease quickly, exporters were also looking at other markets that had not been previously considered, including South Korea, as part of a diversification strategy. Wine consumption in South Korea has been growing over the last decade and the country’s successful response to the COVID-19 pandemic preserved the competitiveness of its economy. Australia has recorded consistent annual growth of around 18% for exports to the Asian nation since the signing of a free trade agreement in 2014.

Opportunities for the Australian wine sector also turned to traditional markets in the United States, United Kingdom and Canada. These major trading partners were somewhat neglected while there was a booming Chinese market. A 2019 campaign in the USA called ‘Far From Ordinary’ was a strong testament that Australian winemakers could make a comeback in the lucrative US market. However, it was seen that growing new, higher value wine exports would require a strong and cohesive strategy across all competitive global markets (‘Where to now for the Australian wine industry?’, InDaily, 7 December 2020).

Wine Australia reported in February 2020 that shipments to the UK surged by 29% over the 2020 calendar year after demand increased at the start of the COVID-19 pandemic and was boosted in the months leading up to Brexit. The sharp rise to the UK and the rest of Europe (up 22%) represents a positive demand for Australian wine potentially fulfilling the market gap due to tariffs introduced by the Chinese government.

According to international reports, there could also be substantial unrealised potential for Australian exports in emerging Asian wine markets such as Japan, Thailand, Taiwan, Vietnam and India. There was discussion that the Australian wine sector would need to pursue a diversification strategy to maintain viability and competitiveness into the future (‘Where to now for the Australian wine industry?’, InDaily, 7 December 2020).

With international travel having been suspended in 2020 and unlikely to return to pre-pandemic levels in 2021, locals have been encouraged to travel to ‘our own backyard’. It is hoped that Australians travelling within the country will mitigate the financial hit to operators resulting from the loss of international tourism. Wine Australia partnered with the Australian Tourism Data Warehouse (ATDW) to develop a project with wine-related functionality to promote wine varieties, winemaking practices and wine regions. Wine tourism and cellar door operators have been encouraged to remain optimistic and to strengthen their online presence to attract local visitors.

Snapshot

2018

2019

2020

Change (%)
Winegrape intake (tonnes) 1,779,179 1,728,454 1,520,608 -12%
Total value Australian crush (A$ billion) 1.11 1.17 1.07 -9%
Average purchased grape price (A$/tonne) 609 664 694 5%
Exports (year to June) (ML) 852 801 730 -9%
(A$ million) 2,757 2,864 2,840 -1%
(A$/L) 3.24 3.58 3.89 9%
Imports (year to October) (ML) 96 100 102 2%
(A$ million) 809 850 834 -2%
(A$/L) 8.41 8.49 8.16 -4%

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