Toasting the good health of Australia’s wine and alcohol producers 

As Australia emerges from long lockdowns – just in time to toast family and friends at festive gatherings this season – what can we expect for wine and alcohol producers in the months and years ahead? Here, we explore current trends and chart what to expect within each category of the alcohol industry.  

First, the good news for producers. Roy Morgan’s Alcohol Consumption Report shows the proportion of Australians who drink alcohol increased by 4% – or nearly a million drinkers – to 69.7% in the 12 months to June 2021, driven by increases in the number of Australians drinking wine, spirits and ready to drink (RTD) pre-mixes. Nearly 14 million Australians aged 18+ consumed alcohol in an average four-week period. 

This growth was driven in part by the pandemic. Stuck at home, many Australians rediscovered the charm of cocktail hour at home – home deliveries from local bottle shops and online retailers skyrocketed. Those with less money to spend turned to value-for-money products such as cask wine. There was a trend towards local, ethical, and health-conscious products, boosting sales in drinks such as seltzers and kombucha-with-a-kick.

Yet is this growth sustainable? As lockdowns fade into the collective memory, will consumption decline? Let’s take a closer look at the state of play for Australia’s wine, beer, cider, and spirits producers – and explore how today’s producers can prepare for whatever comes next.

Wine

Australians’ drink of choice, wine rose in popularity in 2021, with almost half of the population enjoying a tipple. Over 9.2 million Australians (46.3% of adults) now drink wine in an average four weeks, up 4.3% points from a year ago.

While wine production across the sector decreased, and overseas sales crumbled in the wake of the Chinese wine tariff fiasco, direct-to-consumer sales increased, now accounting for 18% of winery income. Online sales grew by 23% in value in 2020-21, but their average value declined, reflecting the uptake in online booze purchases experienced across the sector. Wine subscriptions have continued to grow in popularity. And the ‘better for you’ trend has continued with growing interest in biodynamic, vegan, and alcohol-free vintages.

Beer

While the number of Australians cracking open a cold one remained unchanged, the craft and zero-alcohol beer segments of the market continued to grow. The no-alcohol beer segment has more than doubled in sales at major retail outlets over the past year. And demand for locally produced craft beer rose 15%. The question is, will the number of Australians drinking beer soon be eclipsed by the number of those choosing spirits instead? 

Spirits

Spirits – from the ever-popular whisky and gin to vodka and tequila – are riding a wave of popularity that started before the pandemic. Demand for Aussie spirits continues to grow, with premium craft distilleries using botanicals and experimental flavours to take their labels from strength to strength. 

For example, nearly a third of Australian adults now drink spirits, up from 29.7% a year ago; and sales of tequila rose 46% over the same period as Australians discovered a new thirst for margaritas.

Cider and RTDs

The ready-to-drink market is enjoying a makeover. It’s shaking off its image as a teenage drinker’s tipple of choice, with RTD options becoming less saccharine sweet, more boutique. Hard seltzers – where “hard” means alcoholic, and “seltzer” means sparkling water – are driving strong growth in this market. In fact, some experts predict that these beverages, which are new to the Australian drinking scene, could be worth $300m by 2025. 

It was a different story for cider, with consumption dropping slightly. Australian cideries still have a limited online presence, and part of the downturn in consumption may be due to independent producers not making the shift from on-site tastings to bottle shop shelves.

Increasing transparency across the alcohol supply chain

Just like in other food and beverage categories, a common thread that is impacting on consumer choice and consumption trends is the theme of sustainability. It’s becoming more important than ever for producers to showcase their ethical, social, and environmentally sustainable credentials and compliance standards to an increasingly discerning consumer.

Whether you’re an established winemaker or brewer, or a new-to-the-scene craft distillery, it’s critical that you can prove your credentials. And to do this, you need to dig up the dirt on every element with your supply chain. 

That’s where Muddy Boots comes in. Our solutions put you in control of your data and your supply chain. There’s Greenlight Supplier Management, which shows you exactly who is in your supply chain, where they are and what they supply you, while an integrated suite of mapping and reporting tools provide a chain of custody insights, helping you track product routes back to the source. At the same time, Greenlight Quality Management helps you reduce waste and drive operational efficiency.

As we explore in this video of our work with Persephone Brewing Company, we use technology to improve the traceability and quality of its beer, the Pollinator Pilsner. From the planting of seeds right through to malting, brewing, and packaging, it’s all traceable – with the insights gained helping the brewers get the most from their land at the least impact.

Muddy Boots is here to help you improve traceability from grain to glass. Contact us today to learn more about how we help wine and alcohol producers to streamline their supply chains, optimise operations, and deliver products that tomorrow’s consumers will love.

For more information on how our solutions can help you in the Australian wine and alcohol market please contact Sean.Verlander@muddyboots.com

Senior Business Development Manager, APAC, Muddy Boots by TELUS Agriculture