Struggling to sell their grapes in this tough environment, more and more grapegrowers are having their fruit made into wine, rather than harvest the grapes and waste them onto the ground. This means that there is a larger volume of wine sitting around in tanks awaiting sale. At first glance the sales options for these growers and other smaller wineries look pretty bleak.

The bleak outlook is due to the fact that the vast majority of wine in Australia is sold by three entities: Woolworths, Liquorland and Cellarmaster. Therefore as Woolworths and Coles continue to acquire liquor stores, there are fewer independent liquor stores, all being bombarded with wines from an ever-increasing number of producers. This makes it more difficult for a newcomer to get wines into any store.

Why it is smarter to head straight overseas First there is the Australian Trade Commission (Austrade). Austrade is a Federal Government department charged with helping Australian businesses develop exports. Austrade deals across every Australian industry which exports. They are not wine experts but rather business-facilitating experts. Austrade charges for its services, however, for new exporters there is the New Exporter Development Program (NEDP), which entitles the approved applicant to up to 20 free hours of Austrade time.

Occasionally Austrade organises wine tastings in various countries. It researches and then invites many, if not most, of the serious players in that country’s liquor industry to come and try wines from the participating Australian producers. The real benefit of these functions, apart from giving potential customers an opportunity to try your wines, is that Austrade then follow up with these people after the event. The value of having someone “in country” doing the follow up should never be underestimated. A follow up email or phone call from Australia carries far less weight than a one-on-one meeting in the prospective customer’s own office.

Whilst usually the NEDP free hours are used to help defray the costs involved with an Austrade-organised wine tasting function in the target country, they can also be used to have Austrade “check out” potential overseas customers. If you get an enquiry from a potential customer overseas, he or she will usually “talk up” the size of the business and the company’s ability to sell your product. They will talk in “container loads” for commercial to premium wines and pallet loads for super premium wines. How are you to know if they can deliver the goods or are just all talk? This is where Austrade comes in. You can ask Austrade to check out your potential customer and see where that business fits into the grander scheme of the wine industry in the host country. It is amazing the number of people who own one or two bottleshops, who purport to be major importers of wine, or significant players in their home wine market. Austrade can check these businesses for you, and if they are not appropriate, they can usually find somebody else more suitable. This is particularly true for emerging markets. However in the traditional markets they may not be able to help as much. For example nearly three years ago the Austrade office in Copenhagen helped me find the winery I was then associated with, a suitable importer. More recently talking to the guys there, they advised that since that time more than 200 Australian wine brands had entered the Danish market, and they really couldn’t assist new entrants as much as they had previously been able.

Another incentive Austrade provide is the Export Market Development Grant (EMDG) whereby it refunds up to 50% of eligible expenditure on export market development above the $15,000 threshold. As with all Government funding there is a raft of rules, regulations and requirements that go with it, but luckily there are service providers such as Stuart Mitchell, of Export Solutions, who used to be the Austrade state manager-grants SA/NT, and therefore can ensure that you do the right things to comply with all the requirements.

A website helps

A good way to get enquiries from overseas buyers is to have a website. As the reputation of Australian wines spreads around the world, more and more potential importers seek information on Australian wines. The simplest and most accessible tool for them to use is the Internet. I know of one small winery that receives at least five enquiries a week as a result of having a website. Most end up being dead ends, but even if one in 10 work out, over time you build up a good spread of countries to which you might export.

Caution required

When you get what you think is a serious enquiry from overseas, don’t be afraid to ask the company for details on its winery’s production. For example, I know of one producer who ships on average one to two pallets a month to one of the Caribbean Islands; another producer who ships to a supermarket in Peru; and yet another whose wines are currently being assessed in Istanbul.

This is the time of the wine exporter! Right now the world is beginning to discover wine drinking. Countries which have never consumed wine before are starting to learn and understand about it: Thailand, China, India, Vietnam, and Sri Lanka. Other countries are becoming aware of the great flavours of Australian wines: Brazil, Peru, Africa, Turkey, Russia, and the former eastern block of Europe.

So what are the options for someone just about to release his or her first wine? Friends, acquaintances and even local restaurants can only buy so much, thus to survive the new company needs to find an alternative outlet.

I believe that the most viable sales vehicle for these producers is export. Conventional wisdom has it that a producer has to build up a strong home market before venturing offshore. However, in these domestically-difficult times, this is not a viable strategy unless the wine company has very deep pockets. Therefore the new plan needs to reflect reality, which is: it is relatively easier to sell Australian wine overseas compared with domestically, especially when a company is just starting out.

business including annual accounts. Sooner or later this company is going to ask you for credit, typically 90 days from bill of lading. Incidentally, I firmly believe that the first order should be cash-ondelivery to the wharf. This will ensure that the importer has the financial resources to fund the purchase and also, helps minimise the time that you are out of pocket on the transaction. Your bottler won’t extend your terms to 90 days just because you are bottling for an export order. This is the best way to sort out the “tyre kickers” from the real players.

The Australian Wine & Brandy Corporation (AWBC) has a dual role in wine exports. First, it has the regulatory role of ensuring that all Australian wine shipped overseas is fit for consumption and meets the regulations, and second, through the Australian Wine Export Council (AWEC) its role is to promote Australian wines overseas. AWEC has offices in most of the major wine export destination countries such as UK, USA, Europe and Japan and is currently investigating emerging markets such as China and India. In the major markets not only does AWEC have people on the ground, but it also has promotional programs in place to promote “Wine Australia”. For a not insignificant fee, producers can join the program and be involved in the events run by AWEC, such as the “Australia Day Tastings” which are being held in more and more countries.

Starting to export does not necessarily mean that you have to employ extra staff. Any competent clerical person can, with a bit of coaching, handle the documentary side of exporting. AWBC make it easy for the first-time exporter, with assistance every step of the way through the process of obtaining an export licence and getting the wines approved for export. The AWBC system caters for mail, fax and email, so that no matter how technologically challenged, or advanced you are, you can easily communicate with it. The AWBC has a great attitude, in that it is there to help and not hinder you, which makes life so much more hassle-free.

Another good reason for going straight to export is that when a potential retailer overseas is assessing your wine, it is more than likely comparing your wine with those from other countries, as opposed to the domestic retailer who will be comparing your wine to dozens of other Australian wines. As Australian wines tend to be more fruitdriven than those of most of the rest of the world, in my opinion your wine has a much greater chance of being selected.

One final thing about exporting you must be aware of is the fact that it all takes a long time to get started. It is not uncommon for people overseas to take weeks to get back to you with their opinion of your wines. Even when they say that they “want” to sell your wines, it can be weeks or months before the order is actually placed. For example, the Liquor Control Board of Ontario, Canada, usually takes four to six months from acceptance of a wine, until the first order is placed. So don’t expect that when they say, “yes we’ll take it”, you will be shipping wine in the next few days.

Conversely customers overseas expect you to have stock ready and waiting for their order, so that you can ship almost immediately. Customers have no comprehension of the fact that you need to produce new back labels or over-stickers carrying their importer details, and apply these to your stocks; they just want the order to sail straight away.

also need to be aware that exporting will usually require increased working capital, as most customers ask for 90-day credit from bill of lading, thus requiring you to finance the sale for 30- 60 days more than a domestic sale.

Conclusion
Having sounded a few words of caution, I firmly believe that going straight to export is the only viable solution for small and start-up wine enterprises in present conditions.

There are hundreds of small niche opportunities out there, right around the world, which the big wineries consider too small to be of interest, and which could easily account for the majority of a small Australian potential exporters have excellent assistance resources available and Australian producers have the wine. So what are you waiting for?

Dan Traucki is the principal of Wine Assist Pty Ltd, wine industry logistics and marketing consultancy. He started out as an accountant before joining the wine industry 16 years ago. His involvement during that time has included strategic positions of general manager of a medium-sized winery and chief executive officer of a smaller winery. Dan can be contacted on (08) 8382 4920 (phone/fax), 0408 801 795 (Mobile) or at wineassist@optusnet.com.au