A guest blog by AAVWS Committee Chair Ashley Ratcliff
The American billionaire, Warren Buffett, once quoted ‘when everyone is brave be scared, and when everyone is scared be brave’. My take on this quote is, do the opposite of what everyone else does!
During the 1990’s almost the entire Australian wine industry was brave… super brave!! The entire industry was built on a handful of French grape varieties and a global fascination of Australia’s ‘sunshine in a bottle and critter wines’. The scared, whom were only a few, explored new grape varieties, grape varieties that in essence had no real meaningful demand during the boom times. Why would a grower in the Riverland plant Vermentino or Nero d’Avola when he or she could be paid more than $1,000/t for grape varieties such as Chardonnay and Shiraz.
But history has shown time and time again, all booms are followed by a bust! The bust turned the brave quickly into the petrified! A decade of low grape prices trapped growers into a position where making change was almost impossible. They faced a situation where their ‘new’ financial constraints and a reliance to take a lead from only wineries meant that those French grape varieties that had served them so well during the boom had to stay, even if they were being sold at prices less than the cost of production! Even if they were sending them broke!!
For a very few, the bust was a time of opportunity. The calculated ‘risk takers’ of our industry knew that agriculture’s up’s and downs were just a cycle, and that one-day Australian wine would be popular and profitable again. The ‘scared’ of the boom were the ‘brave’ of the bust! They planted alternative grape varieties, explored new and modern way of marketing their grapes & wine (social media), expanded vineyard and winery holdings (at once in a life-time buy prices). Most importantly, these very few growers leveraged the doom and gloom to build a strong competitive advantage and made the wine offerings of Australian wine interesting.
Today wines made from alternative grape varieties are in solid demand in the market place. The bust helped force the evolution of these wines in the eyes of the consumer. The consumer accepted them firstly with curiosity, but eventually they are the ‘go to’ wines for quality, value and interest.
With strong signs of a resurgence of the Australian wine industry, we may be entering a new cycle where growers become less inquisitive in exploring change. As like the boom of the 1990’s, why change to new, interesting and sometime better suited grape varieties for Australia’s climatic conditions, when growers can sit back and make money from the more traditional varieties.
Let’s hope that the lessons of the past two decades have shown us all that we need the risk takers…the sometimes crazy people to keep the Australian wine industry relevant, progressive and profitable.