Developed by Australian Grape & Wine, in collaboration with Wine Australia, the strategy looks beyond the immediate and sizable challenges posed by bushfires, smoke and COVID-19.
It believes the Australian wine industry can grow in value to become a $15bn AUD ($10.5bn USD) industry by 2050. It has also boosted its focus on sustainability with a net-zero emissions target.
'Excellent viticultural potential'
The Australian wine sector grew strongly from 1991 to 2007: more than tripling in size from less than 400m litres to 1.2bn litres and achieving total revenues of $5bn in 2007. The value of exports, meanwhile, grew from $212m to $3.04bn.
From 2007 the sector has had to cope with a number of challenges – the global financial crisis, appreciation of the Australian dollar, and increased competition from other wine exporting countries such as Italy, Spain, Chile, Argentina and South Africa.
More recently, bushfires and COVID-19 have hit the sector. Meanwhile, climate change, extreme weather events, and an increasingly competitive beverage market (consumers are willing to try new beverages over traditional ones) all look set to continue to present challenges over the coming years.
But there are also opportunities for the industry to build on its reputaion for quality; further develop wine tourism and its relation with food; and grow exports.
“To meet these opportunities and threats, the wine sector must be profitable, so that its businesses can invest in research, development and adoption (RD&A) and attract the skilled people and capital needed to make the sector an innovative and entrepreneurial one,” notes the strategy.
“While facing up to these challenges and seeking to capitalise on the opportunities, the Australian wine sector has, at its core, a number of unique attributes that enable it to produce fine wine across the spectrum of consumer demand.
“We also have an abundance of land, a wide range of climactic conditions and the ability to move production areas. This excellent viticultural potential will stand us in good stead into the future.”
The purpose: ‘To have profitable, resilient and sustainable grape and wine businesses’
The heart of the strategy is to grow the industry in a profitable and sustainable way. In 2019, total winemaking revenue was $6.28bn; the target for 2050 is $15bn. Today’s total economic contribution of the Australian wine sector to the economy is around $45bn: the target is for this to increase to $100bn.
Exports are key focus for Australian wine – 63% of wine produced in the country is exported to 119 countries. While the value of exports has already been increasing over recent years, the strategy wants to boost this further by making Australian wine the no. 1 valued product in its top markets (at the moment Australia is positioned no. 3 in China, no. 4 in the US and no. 3 in the UK).
The strategy sets out five pillars for growth over the next 30 years.Pillar 1: 'Sustained growth in value to drive profitability'
“A 3% annual growth in unit value target is ambitious but achievable," says the strategy. "Projections by Wine Australia for the period 2018–19 to 2028–29 show a 3% compound annual growth rate (CAGR) in unit value could be realised through a 2% growth in unit value in premium wines and 1% growth in commercial wines.”
Highlighting the quality and identity of Australian wines will be key to growing value.
“There will be a focus on raising the image of Australia as a fine wine producer so as to raise the price of Australian wine across all categories – in a relentless pursuit of increasing the unit value of all Australian wine.”Pillar 2: 'An innovative culture driving excellence from grape to consumer'
“Innovation and education are critical to the ongoing success of any industry," says the strategy.
"While the Australian grape and wine sector is proud of its history, it is not trapped by tradition. This has allowed us to become global leaders in offering innovative, high-quality products in a variety of styles via new packaging and distribution channels to benefit consumers and enhance business sustainability.
“Innovation is also vital to addressing significant challenges to the growing of grapes, including climate change and variability, declining availability of water at cost-effective prices, reduced access to plant health products and agrichemicals, and biosecurity threats. Underpinning our world-leading viticulture and winemaking is a world-class education system.
"We must continue to push for further advances in our education system and resultant researcher and practitioner skills, so as to be the world’s most innovative wine producer.”Pillar 3: 'Valued as an essential part of Australia’s lifestyle and culture and a trusted custodian of our environment'
The industry is targeting zero-waste and nett zero emissions for 2025: championing ‘a sector that promotes and adopts sound environmental practices’.
“To succeed and prosper, our key objective is to be respected and trusted for how we conduct our business," says the strategy.
"In an increasingly complex world, the grape and wine sector must demonstrate the value it contributes to our nation – in clever and careful use of our natural resources, in proactively working with government and the health sector to demonstrate our product’s credentials, and through contributing to minimising alcohol-related harms, and in making a real commitment to the economic and social well-being of rural and regional Australia, especially through the provision of employment opportunities and services.”Pillar 4: 'Australia’s employment sector of choice'
“Wine businesses are finding it difficult to recruit and retain workers from the vineyard through to the cellar door operations," says the strategy.
"At a time where demand for higher skills in the wine sector is increasing, tertiary course offerings and enrolments are in decline.
"The skill base required in the sector is also rapidly changing. In addition to winemakers, viticulturists and farm workers, those with skills in areas such as finance, marketing, export, data management, design and social media are also becoming more important.
"Progressively, skills in artificial intelligence, big data and precision agriculture and other fields as yet unthought of, will also be important.”Pillar 5: 'A diverse sector, unified by its pursuit of excellence'
“A strength of the Australian wine sector is its highly diversified geographic, soil and climate environs, which allow a wide variety of wines to be produced," says the strategy.
"Historically this has resulted in a large number of wine industry bodies at national, state and regional levels, each of which is resourced either through levies or membership fees.
“While there are many ‘voices’, it is imperative that they all move in one direction to show a unified focus to governments, customers, consumers and sector participants. Critically, the sector needs the financial resources to support collective RD&A [research, development and adoption], marketing, regulation, policy development and other activities. It will be creative in how it finds these funds and also transparent and equitable in the way it deploys them for the overall good of the sector.”
The Vision 2050 strategy can be found here.