Drinks Business: April 2010, AUSTRIA: Louder please

It recently swept the board at an international wine competition, yet Austria remains characteristically quiet about its accolades. Gabriel Savage discovers that the country has much to offer global markets, but there is work to be done.

austria1.jpg If any other country took nine out of the top 10 places in an international wine competition, you’d never hear the end of it.

Yet when Austria’s sweet wines claimed this sweeping victory in the Concorso Internazionale di Vini Passiti at the end of last year, the UK trade was alerted with little more than a polite press release.

For those who fell victim to this classic example of Austrian reserve, a panel of judges from the Italian Sommelier Association (ASPI), whittled down 535 entries to award the top prize to Burgenland producer Erwin Tinhof, who incidentally took third prize as well. Other Austrians on the podium included Franz Heiss, Elfenhof, Nittnaus and Martin Pasler.

Of course, such is the tiny output of Austrian sweet wine, that you can almost forgive the country for being reluctant to encourage a rush on its treasured reserves. That said, Susanne Staggl, marketing manager for the Austrian Wine Marketing Board, observes that, despite the superlative sweet examples being consistently produced in Austria, “there is almost no market or only a very limited one for sweet wines”.

With that level of recognition, Austria at least deserves to claim a more significant corner of this delicious niche.

What is more, this accolade surely ought to brighten by association the halos of Austria’s dry styles, whose quality is widely recognised in the trade at least, and whose quantity, albeit still small, is sufficient to make a greater impact on international markets.

Reassuringly, the export news from this country is rather more promising than the casual observer might imagine. Total exports of Austrian wine in 2009 “exceeded all expectations”, according to Staggl, with a volume increase of 16% on the previous year, thanks largely to significant uplift in Sweden and The Netherlands.

The UK and the US were the chief nations letting the side down: although volumes to these two countries barely slipped, value sales fell by 16.8% and 17.6% respectively.

This picture is backed up by Doris Maierhofer, export manager for Lenz Moser, who describes the UK as “very interesting, but difficult”. As with its other export markets, the producer focuses here on “the middle to premium segment”; however, despite agreeing that 2009 was a “good year” overall, Maierhofer notes that the notoriously tricky UK market “seems to suffer a bit compared to other countries”.

As with the US, exchange rates and the wider economic difficulties played a role in the UK’s performance last year. More specific to Austria, the country’s increased distribution within the UK off-trade played some part in the value decline here, although the Austrian Wine Marketing Board reports a still comparatively healthy average price of e6 (£5.40) per litre.

International markets

Given that Austria largely remains a nation of small, family producers, it bodes well for its future international progress that many of these businesses are working hard to understand and engage with the individual challenges attached to foreign markets.

“In recent years, Austrian producers have become more experienced in dealing with international markets on a professional basis,” comments Kerstin Klamm, export director for Domäne Wachau, a high-quality cooperative whose members represent around 30% of the Wachau region’s entire vineyard area.

Klamm elaborates on some of the key areas where successful producers have upped their game: “It took Austrian producers some time to understand that UK retail might require different products in terms of concept, design and labelling.” She adds a further important realisation: “Wines that have been successful in the UK on-trade for a long time might not always be suitable for the off-trade as well.”

Giles Cooke MW, marketing & buying director for Alliance Wine, the UK importer for Domäne Wachau, highlights in particular the success enjoyed by Austrian wines in Waitrose. He attributes this to the fact that the retailer is prepared to give both breadth and depth to its Austrian portfolio, praising the “strong presence of Austrian wines on the shelf to develop interest and engagement, as well as to provide a ladder of quality on which consumers can climb”.

Conversely, where Cooke identifies ongoing problems for Austria is where its wines seem to have little more than a token presence on the shelf. He explains: “Where Austria has been less successful in my eyes is in some of the grocers where Austria is one lone Grüner Veltliner under an own label, with little to draw in the consumer.”

On the back of this, Cooke believes there is “a huge area of opportunity” for Austria to develop further its presence in the UK’s independent retail sector, although as yet he feels “an awful lot more could be done to engage the category on a strategic basis”.

Niche product

This angle is certainly a key focus area for Austria’s generic level activity with its current campaign, “The Seven Elements of Uniqueness”, which seeks to highlight the country’s originality and suitably niche offer. Both factors make Austrian wines obviously attractive to both consumers and merchants looking for something different to the territory claimed by the majority of big multiple retailers.

In addition to these independent corners of the off-trade, Staggl pinpoints a further area where Austrian Wine’s work is beginning to pay off: “Austria is getting more and more attention not only in the top on-trade, but also more in gastropubs.”

The work that remains to be done in the UK becomes all the more evident when you consider Austria’s reputation in many of its other key export markets. Klamm points to Germany, Norway, The Netherlands and Switzerland when she says: “Austrian wines and especially Grüner Veltliner have reached a level of publicity and general popularity that goes beyond sommeliers, journalists and wine geeks.”

Nevertheless, she acknowledges that it has taken over 20 years’ hard work, as well as the help of some “very enthusiastic and influential individuals”, to get Austria into this position. As a notoriously tough market, with weaker cultural links to Austria than, say, Germany or Switzerland, it is no surprise that the UK is proving a tough nut to crack.

It’s not just the fierce retail price points here; Klamm acknowledges the relative sophistication of the UK wine market when she comments: “There are many wines that are doing well on the German market that would find no acceptance in the UK in terms of quality.”

Whoever you speak to, there’s no getting away from the consensus that Grüner Veltliner remains Austria’s chief calling card. At the annual Austrian UK trade tasting back in February, there was widespread acknowledgement from many agents that where they were selling other grape varieties into accounts, this was invariably an addition rather than a substitute for Grüner.

Cooke cites Austria as “the natural haven” for anyone looking for an alternative to international giants Pinot Grigio, Sauvignon Blanc and Chardonnay. While also placing great faith in Austria’s Pinot Blanc and Riesling, Cooke believes: “We still have a long way to go with Grüner Veltliner before we need to make the message more complex.”

Into the reds

Similarly, Lance Foyster MW finds his own strong Austrian portfolio is still slightly ahead of the UK market. “We represent as many red as white producers; it’s silly really as we don’t sell enough to justify it,” he comments.

Indeed, Foyster is one of the few UK importers to be making a concerted effort to balance Austria’s growing reputation for white wines by flagging up its capacity to produce no less original, high-quality reds. “Grüner’s thriving, but I do champion red wines and Blaufränkisch in particular,” he notes, maintaining that this is a variety which “reflects terroir, micro-climate and all the things that great wines should do”.

Further murmurs of support for this relatively undiscovered grape are brewing in other corners. Klamm believes: “For the red varieties, Blaufränkisch has probably the greatest potential to become successful on an international basis,” adding: “There is a certain hype for Blaufränkisch in the US right now.”

Austria was often compared with New Zealand not so long ago, as it sought to prove its ability to produce quality wines other than Sauvignon Blanc. Certainly Blaufränkisch lacks the advantage of familiarity, fashion appeal and Anglo-Saxon-friendly pronunciation as the Kiwis tapped into with Pinot Noir, but for those looking to move on from the Grüner Veltliner conversation, this variety appears to provide a very natural extension to Austria’s identity.

Let’s not get carried away. As explained above, Austria still has plenty more groundwork to do in the UK before it catches up with its profile and sales in many other key export markets. Nevertheless, it’s reassuring to know that this marketing effort is backed up
by a product which is capable of proving not only its consistent quality, but also significant stylistic breadth for converts to explore.

What Austria really needs now is for its growing army of enthusiasts to have the courage of their convictions and start banging the drum that bit louder.

Gabriel Savage, April 2010

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Categories: drinks business, growing exports, international wine competition

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