Premium Australia: Light on the horizon

Type ‘is Shiraz’ into Google and, at the time of writing, you will be met with a rather telling list of dropdown terms to complete your search.

Is Shiraz ‘sweet’ is the number-one suggestion, based on the world’s global search history, followed by is Shiraz ‘a red wine’ and, finally, is Shiraz ‘full-bodied’? If Google is good for anything other than scouring the web, it’s peering into the inner monologue of the world’s collective psyche to reveal its honest perceptions of a subject. In the case of Shiraz, which is so intrinsically linked with Australia, the fact that ‘sweet’ and ‘full-bodied’ should be questionable traits is reasonable. The grape’s enduring profile has been one of big, bold wines high in alcohol with soft, ripe tannins and fruit sweetness. This traditional style, done well, still makes up a broad swath of premium Australian Shiraz, which has a stellar reputation. But that is only part of what Australian Shiraz has to offer.

Increasingly, the monster wines of old are being joined by lighter, more elegant expressions of Shiraz, resulting in a level of diversity previously unseen in international export markets, which might just explain the world’s need to question its grasp of the variety.

“Every consumer has different values and some may value the bigger, richer style from the Barossa or McLaren Vale more, while others may pay a premium for that cool-climate Shiraz from the Adelaide Hills,” says Matt Herde, export sales manager for Tahbilk in Victoria. “I don’t think it was that long ago that Aussie Shiraz to the international buyer was a one-trick pony; big, rich and jammy. Now we all knew down here that it wasn’t; we just needed to educate our target audience.”

Indeed, Australian Shiraz, particularly in the UK, has long carried with it the double-edged stereotype of “sunshine in a bottle”. But, as Tom Barry, winemaker at Jim Barry in Clare Valley, attests: “We have worked hard to refine our wines so that they express sunrise and sunset, rather than the blazing heat of the day.” This approach has been mirrored by many producers in Australia. “It has been a gradual change in perception, but I think we are making headway now that the industry is committed to improving the quality of wines produced.”

Brighter expressions

A tendency to pick earlier, the emergence of cool-climate vineyards, experimentation with whole-bunch fermentation and a reduced use of oak are resulting in wines that are lighter and lower in alcohol, with a brighter expression of fruit and terroir. This, says Barry, has helped consumers better understand the nuances in style that Australia is capable of producing, raising the premium paid for its wines in the process.

The industry’s efforts appear to be paying off. In 2016, the value of Australian wine exports hit a record high, growing by 7% to A$2.22 billion (£1.37bn), building on growth in 2015, when exports grew by 14% to A$2.1bn, according to Wine Australia’s 2016 Export Report, with Shiraz by far the country’s biggest variety by volume and value, followed by Chardonnay.

Overall, the average value of Australian wine exports grew by 6% to A$2.96/litre free on board (FOB), the highest average value since 2009. Significantly, the biggest growth was seen at the higher price points, with the value of exported wines priced above A$10 rising by 19% to A$574 million – a record high. Slower growth was reported at the lower end of the market, with exports of bulk wine declining by 2% to A$400m (see table on page 48 for breakdown). Overall, bottled exports grew by 10% to A$1.8bn, with their average value rising by 5% to A$5.48/l FOB. Much of this growth was driven by China (the result of a free trade agreement introduced in 2015) and the US, with these markets’ export values rising by 40% and 3% respectively; gains that were nevertheless tempered against value declines of exports to the UK (-5%), Hong Kong (-16%) and Canada (-0.2%).

“We have seen amazing growth and huge demand for our wines in China from the entry level right through to super premium,” adds Herde. “North America is also showing signs of growth again, which is encouraging. Wine Australia is doing a great job in pushing the premium regional message and this certainly seems to be getting through. In traditional markets like the US, Canada and the UK there are many buyers now realising they need to re-visit their Australian categories. You can only ignore the noise for so long.”

So what’s changed? The emergence of cool-climate regions such as Tasmania, Tumbarumba, the Adelaide Hills, Margaret River, Yarra Valley and Victoria have played a huge part in raising Australia’s premium image and diversifying the country’s Shiraz offer. Even in warmer regions, winemakers are tilting towards the production of wines with a lighter frame and reduced use of oak to allow a region’s individual character to better shine through.

“The market is understanding and allowing producers to really push forward the style that their region can deliver, rather than trying to fit a square peg into a round hole,” says Larry Cherubino, director of winemaking at Robert Oatley and Larry Cherubino. “Fifteen years ago there wasn’t great acceptance. Shiraz from Australia was known more for its traditional style. Now there’s a good understanding that we can offer great diversity. There are clonal developments going on and we are seeing the emergence of cool-climate Shiraz. Not just really bold stuff, but red-fruit flavours, and it’s really welcome to see that coming through. So you are getting these really lovely, gentle styles of Shiraz coming out of Australia. People are handling Shiraz like they would handle Pinot.”

Rich and ripe

Winemaker Chris Ringland has been making wines in the Barossa for the past four decades – a region that has built its reputation on a rich, ripe and bold style of Shiraz with the potential to age. However, even in this traditional Shiraz stronghold this “grand” style is being joined by lighter, more elegant expressions.

“It’s tremendously exciting,” says Ringland. “I’m seeing young cellar hands going on to start their own projects and to my bloody delight they have gone on to create their own unique personalities and styles of wine. It’s pretty gratifying. I think the conventional approach to the vinification of Shiraz is being challenged, and the younger generations of winemakers are finding their feet. They have more experience of whole-cluster fermentation, creating a fruity and spicy character.”

Nevertheless, Ringland is resolute in his own approach: “I still stick very firmly with the style and philosophy that I learned at Rockford Wines with Robert O’Callaghan,” he says. “I like to create a grand wine – almost like a gran riserva Shiraz aged in barrel between five and six years, sometimes released 10 years old – but that’s my personal experience. Other winemakers are much more excited by producing fruit-forward wines that people can drink straight away. It’s wonderful that this diversity is being celebrated. We have been mistaken on this belief that there is a right way of Udoing things and a wrong way. The joy of wine is this diversity and quirkiness and craziness. That’s part of what makes wine so exciting.”

Yangarra in the McLaren Vale, for example, has been using whole-bunch fermentation since 2011 – a trend that winemaker Peter Fraser says is growing in much of the Barossa and McLaren Vale, as well as in Australia’s cooler-climate regions, adding complexity through structure and a savoury element to his wines “without being overdone or
over extracted”.

Yangarra’s top wine, Ironheart Shiraz, carries an RRP of AU$105 and is a 100% Shiraz grown in Kangarilla, using a wild-yeast ferment and 25% whole-bunch fermentation.

“When we first started doing whole-bunch fermentation, it wasn’t being used a lot,” he says. “Now, whole-bunch has become much more popular. It is sometimes overdone but winemakers that have been playing around with it for a while are finding a good balance. We find that for our top wines 25% works nicely. Anything more than that and the winemaking starts to take over.”

Oak too has long been a contentious issue in the Australian industry, with the heavy-handed vintners of the past leaving behind a legacy of overuse. While still fundamental, its use has lessened, its application refined and restrained. For Chester Osborn, fourth-generation winemaker at d’Arenberg in McLaren Vale, which began producing its Dead Arm Shiraz in 1993, this has been significant in Australia’s evolution of Shiraz, not only in McLaren Vale, but of a multitude of varieties, including Chardonnay.

“We are seeing people getting away from the fat oiliness and big rich oak, and really expressing the fruit character and freshness,” he says. “The next stage is to have freshness, but also the structure, longevity and complexity of terroir. That’s what’s happening more and more. We are seeing a lot more excitement about our wines, and the premium end is growing quite nicely.”

A key strategy of the wider Australian wine industry to raise the perception and price paid for Australian Shiraz, and all of its wines, has been to dig deeper into its terroir to better communicate regional difference to consumers. As Herde points out: “Knowledge is power, so when it comes to the consumer the more they know the more they are likely to spend.”

For Osborn, terroir is the result of two separate aspects; soil and geology. “I have this philosophy that the part of the vine above the ground is not as important as the vine under ground,” explains Osborn. “The part above ground expresses the climate, but the climate can be copied. A hot year in a cool climate can taste like a cool year in a hot climate. But the land and the geology and the soil cannot be replicated. It’s the geological character that really says ‘McLaren Vale’, rather than the climate. The vine above the ground is really there as the power source.”

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Cementing its confidence in Shiraz, and the power of terroir to raise its fortunes, earlier this year the Australian wine industry launched a six-year AU$5.3m research project to help it better understand the scientific effects of terroir on its expression of Shiraz, but also to raise the industry’s premium potential.

“Australian winemakers are using regionality to give wine drinkers the opportunity to explore a spectrum of wine styles that command a premium price,” notes Mitchell Taylor, managing director and winemaker for Wakefield Wines in Clare Valley. “Australians as winemakers are still quite young in comparison with Old World markets, but we are becoming true masters of our craft, gaining full wisdom of our terroirs and how to embrace them. With this knowledge, winemakers across Australia are able to offer up greater expression and diversity in their output, instead of a broad sweeping, single-minded, ‘old-school’ approach to wines with high alcohol and high extract.”

The project will see a number of research institutions, including the University of Adelaide, Commonwealth Science and Industrial Research Organisation, National Wine and Grape Industry Centre, South Australian Research and Development Institute and the Australian Wine Research Institute come together to analyse Australia’s soils, geology and climate to determine how they influence wine style and quality. Winemaker Brian Croser, deputy chair of Wine Australia, called it the “most exciting and insightful” research project that he had ever seen undertaken in the Australian wine community in his 40-year career.

Quality and finesse

“Australia makes wines of exceptional quality and finesse that reflect their provenance and terroir, but they don’t currently receive the international recognition they merit,” he said at the time of its launch.
While industry leaders hope the project will uncover the secrets of Australia’s vast viticultural terrain, others are less emphatic about its purpose. While Ringland acknowledges the importance of communicating the differences in soil and geology, and the impact it can have on a wine, he’s sceptical of the concept of terroir, and the need to scientifically pin it down to a quantifiable measure.

“I am a great admirer of the British physicist Julian Barbour,” he says. “He asserts that time doesn’t exist. It’s a construct that we created to make sense of reality. I think there is a parallel with terroir. I don’t think it exists. It’s a construct we created to explain the quirkiness and difference of wines coming from different varieties and regions. I don’t understand why we would want to define it. Part of the fun of wine and what makes it exciting for me is this mysterious aspect.”

Describing his approach to managing terroir, Ringland says he is simply a “person with a dog on a leash”, who doesn’t know where the dog is going to go. “In any given season there will be a unique array of climactic variations and quirky changes and differences in rainfall and temperature,” he explains. “I do my best to adjust my management of the vineyard, but my role is actually to use the wine as a means of telling a story about what happened in that vineyard over the past 12 months. There are times that no matter how much I understand what’s going on, it goes off in another direction.”

Rather than turning it into a “measurable entity”, more important is “celebrating the mystery” and conveying the peculiarities of terroir, says Ringland.

It is these peculiarities that are making Australian Shiraz so exciting, with a lighter and more sensitive approach to winemaking revealing more of the country’s regional characteristics with each passing year.
“We are no longer just Australian wine but a world supplier of high quality and diversity of style,” asserts Bruce Tyrrell, managing director of Tyrrell’s in the Hunter Valley. “We’re no more a one-trick pony but a sophisticated supplier with a diverse range of regions and varieties that will keep the consumer interested. Pushing ‘regional’ and ‘variety’ is the road to higher prices and a more profitable industry and a lot more pride in what we do.”

As alluring as an untamed and enigmatic vision of terroir might be, the Australian wine industry has invested heavily in unraveling its secrets in a bid to take its expression of Shiraz to the next level. Only time, and perhaps a Google search 10 years from now, will tell if it has been money well spent.

Click through to find out how producers are using Shiraz to help lift the value of Australian wine and its reputation among consumers…..

Trade talk: In what ways are producers using Shiraz to help lift the value of Australian wine and its reputation among consumers?

Tony Ingle, chief winemaker, Angove

“When we first took over the Warboys McLaren Vale vineyard in 2008 it was trellised to produce homogenous bulk Shiraz. In the intervening nine years we have made some drastic adjustments. Careful pruning of the grandfather vines – planted some time in the 1930s – has allowed production of between 1.5kg and 2kg per vine. We have replanted disease-affected vines and less-preferred varieties, such as Merlot, with more suitable clones of Shiraz. The new plantings are much higher density, in the region of 3,000 per hectare in some spots, which will hopefully give us variety of fruit intensity and flavour. We have applied the knowledge we gained from plant-cell density mapping of the vineyard, carving the vineyard into small blocks, which are pruned and picked differently, according to the soil profiles and natural vigour of the vines. The overarching principle of this micro-management is the jewel in our viticultural crown: we converted the vineyard to organic and biodynamic practices, becoming fully certified by ACO from vintage 2013.”

Bruce Tyrrell, managing director, Tyrrell’s

“Firstly, expanding the knowledge of our regions. We have 69 separate regions and probably more than 500 sub-regions all with their own characteristics, style and quality with Hunter Valley at one end and Barossa at the other. Our biggest problem is to overcome the term ‘Australian Shiraz’ as a saying. It’s like saying ‘American Cabernet’. We continue to make more and more use of the vine age. With no phylloxera in the Hunter and South Australia, we have the world’s oldest Shiraz vines, and many of the newer plantings are cuttings from them, making sure the original vine material is preserved. My two oldest Shiraz vineyards still on their own roots were planted in 1867 and 1879. Winemaking techniques continue to evolve but more importantly is the recognition of getting picking dates right as that is the most important quality parameter.”

Neil McGuigan, CEO & chief winemaker, McGuigan Wines

“Famous Shiraz regions such as the Hunter Valley, McLaren Vale and Barossa Valley have some of Australia’s oldest and most distinguished Shiraz vines, but it is the maturing Shiraz vines found in our cooler regions that are helping build the reputation of Australian wine. Every year the Shiraz vines found in the elevated Adelaide Hills, Canberra, Tumbarumba and Eden Valley are becoming more mature and, as they age, they learn to self-regulate and yields come into balance, throwing less clusters and smaller, more concentrated berries that tend to ripen more evenly. Wines from Australia’s traditional Shiraz regions will always enjoy a strong following for their power, colour and richness, but our country’s Shiraz leadership will come from its cool climates, home to elegant, complex and concentrated wines that are lower in alcohol and exciting to drink.”

Ben Bryant, chief winemaker, Jacob’s Creek

“Regionality plays a key role in attesting to the provenance and quality of wines, especially in the £10 to £20 bracket, where consumers expect to see a region named on the label. In 2010 we moved our Reserve Shiraz to a Barossa appellation – to share what is arguably Australia’s most famous region for Shiraz, and highly sought after by Australian winemakers and consumers globally. Regionality also showcases the diversity of Australian Shiraz, with cooler regions creating a lot of interest, and allows Australian winemakers to deliver expressions of Shiraz that are among the most diverse and progressive wines made anywhere in the world. Australian producers’ focus now should be on communicating clearly to consumers about the distinct personality of each of our regions. This approach will accelerate our global reputation.”

Daniel Swincer, chief winemaker, St Hugo

“First is vineyard expression, via either sub-regional and single-vineyard wines. At St Hugo we show two 2012 Shiraz wines from the Barossa: one is from the Seppeltsfield sub-region and one from Rowland Flat. When tasted side by side, people really appreciate the distinct personality that each sub-region brings to the wine, and taking the time to tease out these personalities is worth the premium paid for them. Second is respect for the fruit. The fruit should be the hero, with the oak playing only a supporting role. In the past, some producers were heavy-handed with oak, but now more restraint is apparent. Overall, the top Australian Shiraz expressions have always demonstrated outstanding quality, a great sense of place and genuine elegance but today we just have more wines being released in this space, so awareness of them is finally growing.”

Mitchell Taylor, managing director and winemaker, Wakefield Wines

“The greatest thing producers are doing to help lift the value of Australian Shiraz is demonstrating how much they understand about the terroir. Beyond just conveying a sense of place in their wine, Australian winemakers have moved beyond experimentation and are making deliberate, considered and conscious decisions that are resulting in wines with a more mature expression and some truly extraordinary wines. One aspect of this comes down to selection and appliance of oak. Winemakers are far more considered with oak in the maturation process, and the quality of oak overall is improving to create red wine styles that are smooth, round and fuller-bodied.”