Life beyond Shiraz
It was 2008 when I first uncovered the beauty of long-distance traveling. Thanks to Wine Australia, a trade promotion organization for Australian wines, I was taken first down to Perth and the regions of Margaret River and Mount Barker — and then to hot Barossa and Clare. Hunter valley and the shining Sydney were the finishing point, a beautiful third course of this “dinner”. Back then Australian wines were in the spotlight of the public interest in Russia as were the other New World wines. It was a “before crisis” time, the market was booming – in terms of Russia booming can be defined in rising imports level and the consumption reaching 6 liters of wine per capita a year. I came back inspired that Australian wines had a brilliant future lying ahead. This was partially based on the growing interest to New World wines in general, but also on perceived interest of Australians in the Russian market – and therefore the efforts to enter it. In fact, me and many wine trade people I talked to are quite sure that the potential for Australian wines is here – they are warm climate wines, mostly reds, perfectly suited for the colder Russian conditions – aromatic, dense, full-bodied and rich. Despite the fact that elegant wines are more and more appreciated, Australian wine industry is surely capable to deliver the wines of the right profile.
Lots of things have gradually changed since 2008. Russian wine market suffered several deadly “heart attacks” which lead to market shrinking and consolidation of the players – and with this in mind – disappearance of some smaller importers who just couldn’t catch up with the rising appetites of Russian officials-bureaucrats and their desire to make money out of nothing. As you probably heard, Russian “fine wine” market is not easy to deal with. The main enemies of doing business here are strict and ever-changing rules of the game and the regulations.
There are Australian wines in the portfolios of major wine importers but they are miniscule in terms of events and information flow from the official bodies whose job is to create awareness and show local wine advantages throughout the world. Unfortunately Wine Australia also undergone big European management change and the focus of efforts of its UK-based office is far from Russia. Aaron Brasher, regional director for Australia and emerging markets told me in an email: “Wine Australia’s position in Russia is a passive one. We work with Austrade to identify any opportunities and resource accordingly. Russia currently is not a priority market and there are numerous barriers to entry. It is a market that we continually monitor to assess the environment and opportunity”.Less activities and consumer education both mean less market share. Russians are curious and easily try new things. For the last several years I never saw a single event capable of attracting any wine audiences or importers. The knowledge of a general Russian consumer about Australian wines is limited to Shiraz and possibly Yellow Tail bottle, if they recall the name. As Olga Olefir, the head of corporate department of MBG wine importer says: “The Penfolds dinner with the Russian clients was an eye-opener for me. This flagship wine from Barossa is virtually unknown even among high-end wine consumers. Add to this a huge gap between low-level supermarket plonk and overpriced high-quality Australian reds which is not filled by moderately priced fine wines from stable producers – and you will see the picture”.
With importers and rare big producers having to educate consumer at their own expense the position of Australian wines is being driven to low-quality wine sales and complete oblivion of the category of nice aussies like Henschke, Charles Melton, Yalumba, Torbreck – especially in on-trade. Argentina, France, Italy and Spain are taking the minds of Russian consumers. Even Greece is doing amazing amount of events in Moscow although we all agree there’s no chance for it to gain any noticeable market share.
Veronika Denisova, now in charge of wine education in Moscow’s leading wine school Enotria comments: “Education is crucial for any country willing to be on this market. With a new emerging flock of younger bloggers and journalists it’s easier to address wider public than it has ever been. Internet changed a lot in wine business”.
Only big wine producers like Pernod Ricard who secured their market shares with fine spirits feel quite safe in Russia. Jacob’s Creek is growing due to great distribution system of the spirits’ brands of Pernod Ricard in Russia. Still, even this wine is not always perceived as Australian and it definitely does not represent the crème de la crème of the Australian wine producers.
Other wine trade professionals were quite consonant with the dominating opinion. Australian wines are out of public interest due to obvious reasons but the potential is still there. Shiraz is widely accepted by Russians as a leading “brand” of Australian winemaking and this could be an amazingly interesting marketing tool to use. But it should be rather used by regions or country bodies like Wine Australia; no one else has the financial power and desire to bear this kind of responsibility.
AM
This story originally appeared at Russia Beyond the Headlines on November 13, 2012 - read original
