Ideas food for thought

There's a long-standing joke among industry analysts that says you can make a small fortune out of growing grapes and making wine. All you need is to start with a large fortune.

It brings wry smiles to the faces of Australia's wine producers. And who can blame them? After all, the recently released 2004 Annual Financial Benchmarking Survey conducted by the Winemakers Federation of Australia suggests they are on a slippery slide. Winery profitability has been declining since 2002.

Almost half of the wineries that participated in the study generated a loss before tax. Those with sales between $10m and $20m were worst affected, recording average losses of 8.7 per cent of their revenue. Smaller producers fared somewhat better, with earnings before tax ranging from 0.3 percent to 8.0 percent.

Such knife-edge results don't bode well for Tasmania's winemaking fraternity.

Speaking at last Thursday's launch of his 2005 Pirie South wines at Launceston's Country Club Resort, industry pioneer Dr Andrew Pirie reckons it's time Australia changed its global marketing strategies and concentrated on growing the country's reputation as a producer of diverse and interesting premium wine styles.

At a personal level, we humans are used to adapting to change. What is more remarkable is how quickly we take for granted what was once novel and unfamiliar.

Much to the amusement of his dinner guests, Pirie recalled one of his first experiences of trying to buy wine in northern Tasmania. It was sometime in the mid-1970s, after the industry pioneer had recently relocated from Sydney and was setting up a ground-breaking new vineyard in the State's north-east.

"I dropped in to a local hotel to purchase a decent bottle of red for dinner," he explained.

"They offered me a bottle of Port. It was about all you could buy there 30 years ago. A bottle of white meant that you got Sherry."

The vineyard he was planting at the time was not just a first for the tiny township of Pipers Brook. It was among the first in the country to see a white grape called Chardonnay. Indeed, the variety was so new to the Australian market that only Tyrrell's in the Hunter Valley gave it specific mention on a product label.

Chardonnay has certainly moved on from there. It's now the country's most widely planted white grape, and the second most productive variety overall after Shiraz.

Of course, Pipers Brook Vineyard championed a handful of other varieties that were also novel and unfamiliar in the Australian context. Nowadays, we take for granted Tasmania's pre-eminent position as a producer of premium quality cool climate Pinot Noir, Pinot Gris and Gewürztraminer.

And while it's something of a sobering reality to hear they're still only regarded as minor varieties on the mainland, they at least provide this State's winemakers with a sound competitive advantage in overseas markets.

"There is a need to capitalise on our positive market reputation," Pirie continued.

Continuing to prop up Australia's current perception as a producer of large quantities of cheap and cheerful wine will only exacerbate the financial dilemmas being experienced nationally by larger players, he noted.

Companies then become trapped in a low margin world of discounting, and ultimately end up facing increasing competition from other low cost producers.

"Let's stop saying how big we are and start saying how good we are," he added.

Pirie believes the best place to start is for the industry as a whole to celebrate the uniqueness and regionality of its wines - rather than the skill of cult winemakers who are able to triumph over nature and craft amorphous blends that vary little from vintage to vintage.

Place as well as passion and people would be the key components of the industry's future successes, he suggested. Emerging wine regions like Tasmania must play a pivotal role in delivering that message to the world.

"I'm pleased we've been one of the pioneers of this new approach. We've always kept our geographic indication as a key marketing tool, and blending hasn't been a feature of our wine scene. We're actually making Tasmanian wines from Tasmanian grapes.

"It turns out that's the best thing to do in the current market because it gives us more appeal and more value. I think that sets us up for a very strong future here in Tasmania."

Lavish in his praise of the passion and professionalism shown by the resort's food and beverage team – ably led by Richard Pobitzer – Pirie told guests that living in a wine region like Tasmania had some special advantages.

"I think wine has a civilising influence on an area," he noted.

"Why? Because I think the food improves, the interest in wine improves, and everyone's senses are heightened because they feel close to the action."

But being close to the action imposes special challenges on those involved with service delivery in the wine, food and hospitality industries, he cautioned. Winemakers in particular need to be fully versed on how their products might be used at the dinner table.

"Otherwise, it's a bit like being a motoring journalist and not being able to drive," the vine doctor concluded.

That's a welcome set of prescriptions for an industry going places.

First published 17 August 2005: The Examiner