1. Victorian Agribusiness Summit 2009
The Future of Wine
Joanne Butterworth-Gray
Chief Executive
Victorian Wine Industry Association
November 14, 2018
Victorian Wine Industry Association

2. VICTORIAN WINE INDUSTRY FACTS
The infrastructure –
Victoria has
21 wine regions
820 wineries
621 cellar doors
November 14, 2018
Victorian Wine Industry Association

3. VICTORIAN WINE INDUSTRY FACTS
The infrastructure (cont’d)
in Victoria 36,000 hectares of wine grapes are grown, of which
19,049 hectares are used by Victorian companies to make appellation wines
this equates to 196,130 tonnes of wine grapes crushed by Victorian companies
November 14, 2018
Victorian Wine Industry Association

4. VICTORIAN WINE INDUSTRY FACTS
The numbers
Victorian wine industry employs 11,736 people
>1.5M people visit Victorian wineries each year
Retails sales of Victorian-made wine = $1.3B
Winery tourism generates $32M
Grapes or wine sales generate $152M
TOTAL REVENUE generated by Victorian wineries = $1.53B
Information sourced through the VWIA Knowledge Project 2009 funded by the Victorian Government
November 14, 2018
Victorian Wine Industry Association

5. VICTORIAN WINE INDUSTRY FACTS
The multiplier
Indirect flow on economic benefits from Victorian wine companies in 2007/08 was $4.5B
The total retail value of wine grapes grown in Victoria in 2007/08 = $2.6B (includes grapes made into wine for sale by Victorian companies + grapes/wine exported for sales by non-Victorian companies)
November 14, 2018
Victorian Wine Industry Association

6. VICTORIAN WINE – RETAIL SALES
What is Victoria’s market share?
Victorian wine companies generate 50% of the value of the sales of Australian wine in domestic markets – a retail value of $1B
The value of exports has taken tumble for Victoria – as it has across Australia – down to 11% of the value of the national wine exports
November 14, 2018
Victorian Wine Industry Association

7. VICTORIAN WINE - REGIONS
Regional comparison – value of wine sales in warm vs cool regions
Warm = $417M
Cool = $932M
November 14, 2018
Victorian Wine Industry Association

8. VICTORIAN WINE - COMPANIES
Company size & distribution
50% Victorian wine companies hold only 11% hectares under wine grapes, yet 64 companies grow 58% of the state’s grapes for production
50% Victorian companies crush <20tonnes wine grapes, yet 8% crush >400tonnes
November 14, 2018
Victorian Wine Industry Association

9. VICTORIAN WINE - REGIONS
Regional snapshots
Hectares grown by Victorian wine companies for production and sales
Yarra Valley is the largest – 3596ha
Henty is the smallest – 46ha
November 14, 2018
Victorian Wine Industry Association

10. VICTORIAN WINE - REGIONS
Regional snapshots
Tonnes crushed by Victorian wine companies for sales
Mildura Murray Darling is the largest – 46,000T
Yarra Valley = 38,000T
Beechworth = 217T
November 14, 2018
Victorian Wine Industry Association

11. VICTORIAN WINE – THE CHALLENGES
Getting the trade balance right – supply vs demand
Exports vs imports – between regions and states
Can we create an index of self-sufficiency?
November 14, 2018
Victorian Wine Industry Association

12. VICTORIAN WINE – THE CHALLENGES
Victorian wine companies have exemplary performance in domestic markets – how to retain that 50% market share?
Who are our real competitors?
With only 21% of Australia’s production, how does Victoria retain its voice in marketing programs?
November 14, 2018
Victorian Wine Industry Association

13. VICTORIAN WINE – THE CHALLENGES
Export markets represent a real challenge for Victorian wine companies – 630 (77%) crush <50tonnes – how do boutique businesses regain market share in a market where the consumer is trading down?
November 14, 2018
Victorian Wine Industry Association

14. VICTORIAN WINE – THE CHALLENGES
Water to wine ratio – regions with secure non-irrigated supply show >revenue generated per ML water used
What is the implication for dryland vineyards?
November 14, 2018
Victorian Wine Industry Association

15. VICTORIAN WINE – THE CHALLENGES
Environmental sustainability –
What is the cost implication?
What is the impact on vulnerability of supply?
Where will the market barriers exist in the future?
November 14, 2018
Victorian Wine Industry Association

16. VICTORIAN WINE – THE FUTURE
Opportunities
46% Victorian companies expect to grow investment in marketing
Tactical campaigns to support this positive outlook
Maintain Victorian Government
investment in joint initiatives
“Put Victoria On Your Table”
November 14, 2018
Victorian Wine Industry Association

17. November 14, 2018
Victorian Wine Industry Association

18. VICTORIAN WINE – THE FUTURE
Wine tourism
Define the relative economic contribution of wine sales associated with tourism
Understand the reasons for travel
How important are cellar doors to Victorian tourism?
November 14, 2018
Victorian Wine Industry Association

19. VICTORIAN WINE – THE FUTURE
Quality vs quantity
Define “brand Victoria” as a quality offer premised on
Diversity
Quality
Personality
November 14, 2018
Victorian Wine Industry Association

20. VICTORIAN WINE – THE FUTURE
Data collection – intelligent research
Refine data collection to deliver a competitor analysis for Victoria wine by state and region -
Brand
Profitability
Sustainability
November 14, 2018
Victorian Wine Industry Association

21. VICTORIAN WINE – CONCLUSION
Do small wine producers have a future?
YES – if they are sustainable, profitable, and above all knowledgeable
YES – if organisations at state, regional and national align policy and programs
YES – if industry demonstrates value in ongoing government investment
November 14, 2018
Victorian Wine Industry Association

22. VICTORIAN WINE INDUSTRY
Thank you
Joanne Butterworth-Gray
Chief Executive
Victorian Wine Industry Association
November 14, 2018
Victorian Wine Industry Association