Wine Companies

Australian Wine Producers

Number of wine producers

The total number of wine producers in Australia continued to decrease in 2018, dropping by 5% from 2017 (Table 10, page 6) to a total of 2,257 producers. Declining numbers were seen in each state of Australia, with the greatest decreases occurring in Tasmania and Victoria, where the total number of producers in 2018 decreased by 9.9% and 7.9% from 2017 (Table 10), respectively. For Victoria in particular, 2018 saw the continuation of a declining trend since 2012, with the number of Victorian producers dropping below SA for the first time in 29 years. SA is now home to the largest number of wine producers in Australia, coming in at 684 in 2018, a 1.6% decrease from 2017 – the lowest percent decrease across Australia in 2018 (Table 10).

These decreases in total numbers of wine producers appear to be concentrated on small producers, with the number of producers crushing less than 100 tonnes dropping by 7.7% from 2017 (Table 11). The smallest producers, those crushing less than 10 tonnes, were impacted the hardest with a decrease of 13.1% in 2018. With this decrease, the number of producers crushing less than 10 tonnes once again dropped below those crushing 20-49 tonnes for the first time since 2012. On the other side, the number of larger producers crushing 5,000-19,999 tonnes remained relatively constant in 2018, continuing a trend of stability since 2016 (Table 11).

Comparing production profiles by state, Victoria leads the nation for small-scale production, with 434 producers crushing less than 49 tonnes in 2018. In contrast, SA leads mid- to high-level production, with the highest number of producers crushing 50 tonnes or more (Table 12). The percentage of wine producers who export their products declined in 2018 to 45% (down by 3%) of all producers (Table 13).

The Directory also reveals some interesting trends in business practices by wine companies (Table 13). The number of companies with a cellar door outlet showed a decline for the fifth consecutive year with only 1,562 wine producers indicating they have a cellar door. Compared to almost 80% a decade ago, only two thirds of all producers across the country now operate a cellar door to complement their business. Although South Australia is a major player within the industry, only 54.5% of the state’s wine companies have a cellar door making it the lowest percentage in the country. Approximately 73% of producers in Victoria and 79% in New South Wales/Australian Capital Territory still actively engage customers through a cellar door.

Wine companies are now relying heavily on the use of technologies such as websites and social media platforms to engage with customers. Almost 92% of wine producers have an active website for customers. Facebook remained the most popular social media platform with 40% of wine companies maintaining a presence. Twitter is also of increasing importance and is now used by 23% of wineries (Table 13).

In other business trends, the percentage of wine companies making fortified wine remains steady at about 29%, but those making sparkling wines continues to grow and now stands at 44%. However, organic winemakers are yet to gain traction within the industry (Table 13).

Grape Varieties

Australian wine producers advised the Directory that they crushed 154 winegrape varieties to produce straight varietal or blended wines over the course of 2018 (Table 18). This remained largely unchanged from the previous year. The white variety Malvasia Blanca variety was dropped from production last year.

Shiraz remained the most common variety being made as a straight varietal wine or blended, with 63% of producers listing it. Chardonnay was the next most popular variety (51%), followed closely by Cabernet Sauvignon at 50% of producers crushed this variety of grape. Merlot at 36% and Pinot Noir at 31% round out the top 5 variety of grapes used in 2018 (Table 18, page 10).

Wine producer industry rankings

Each year, the Wine Industry Directory endeavours to list all the wine companies in Australia. While a small number of companies opt not to be included, the list is nonetheless regarded as the most accurate record of the wineries in Australia. With this in mind, the total number of wine producers in Australia continued to decrease in 2018.

Australian producers had a very successful 2018 highlighted by the Directory’s ranking table of exports by volume. The top 5 producers accounted for an estimated 87% of the total export volume with Treasury Wine Estates regaining its dominance within the export market marginally overtaking Accolade Wines after 3 years (Table 16, page 8). These two largest exporters were closely followed by Casella Wines. Pernod Ricard Winemakers and Australian Vintage complete the top 5 producers with largest export volume.

Treasury Wine Estates (TWE) continues its long reign of being the most valuable winemaker in the export market. From the Directory’s data, the company contributed $964 million in export value to the industry for the year 2018 (Table 17, page 9). The success of TWE is likely to continue with the company reporting a strong interim result for the financial year of 2018 with Reported Net Profit After Tax (NPAT) up 37% to $187.2 million (ASX: TWE). TWE also announced a series of transformational changes to its route-to-market in the US that are expected to strengthen the company’s competitive positioning, increase efficiency and effectiveness and drive portfolio growth (ASX: TWE).

Accolade Wines crushed 248,000 tonnes of fruit to easily retain its mantle as Australia’s largest wine company in terms of grape intake and wine production (Tables 19 and 20, page 10). CHAMP Private Equity has agreed on a $1 billion deal to sell Accolade to global buyout firm The Carlyle Group. New owner Carlyle is expected to accelerate Accolade’s Asia strategy, with a focus on the fast growth of the Chinese market with sales in China forecasted to be up 80% this year for the company (Australian Financial Review, April 5, 2018).

The largest 10 companies remained the same in 2018 when compared to the previous year. The overall intake of winegrapes was smaller in 2018 for the industry with the top 3 wine companies reducing their intake by approximately 20% compared to the intake in 2017 (Table 19).

After a strong 2017, Zilzie Wines reduced its winegrape intake by 37%. This is a significant reduction for the company.

The ranking of the wine companies by revenue remained consistent with the composition of the top 10 companies over the past five years. Treasury Wine Estates took the mantle of the top revenue generator in 2018 (Table 21, page 11) with Accolade Wines and Treasury Wine Estates anked the top 2 largest wine companies respectively, based on sales of branded wine (Table 22, page 11).
Treasury Wine Estates remained Australia’s biggest producer in terms of vineyard area with 8,828 hectares under vines (Table 23, page 11). Casella Wines ranks second almost doubling from 2017 with 5,300 hectares following a buying spree including the Tullymore Estate. Australian Vintage ranks third with a decrease of 200 hectares for a total of 2,700 hectares, followed by Kingston Estate with an increase of 800 hectares in 2018 with a combined 2,150 hectares (Table 23).

There was no change to the processing capacity of Australia’s largest wineries in the past year (Table 24) with Casella Wines’ facility at Yenda topping the table with 250,000 tonnes. Accolades Wines owned 340,900 tonnes of processing facilities in 2018. Treasury Wine Estates increased its processing capacity by an additional 15,000 tonnes with the addition of Wynns at Coonawara.

The Australian Bureau of Statistics and Wine Australia forecasted the bearing area in Australia for the financial year 2017-18 to remain constant at 135,000 hectares (Table 25, page 12). However, the price of fruit continues to soar for the third consecutive year for both cool and warm climate earning growers $1,342 per tonne (up 9%) for cool climate regions and $396 (up 15%) for warm inland crops (Table 25).

For white grapes, Chardonnay was the most common with an average price of $1,044 per tonne for crops from cool climate areas and $334 per tonne for warm inland harvests. Riesling was the variety with the highest average price at $892 per tonne, representing 46% above the average price of all types. Grapes grown in cool climate areas were worth an average of $1,171 per tonne, while crops from warm inland regions were worth $329 (Table 26, page 12).

Nero d’Avola is the most expensive red grape selling for an average $1,825 per tonne with the price three times more expensive than the average price (Snapshot: $609 per tonne) of all grape types. Shiraz continued to perform well in 2018 fetching an average of $822 per tonne with the cool climate collecting $1,602 per tonne for harvests and the warm inland regions receiving $481 per tonne (Table 26).

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