There's an audience for high-octane wines, to be sure. But that market has shrunk dramatically in recent years as consumers have embraced more elegant, food-friendly wines.
In the late 1990s, Americans became obsessed with wines from the Land Down Under. For most of this millennium's first decade, fruit bombs with quirky names and eye-catching labels flew off the shelves of U.S. retailers. But sales soon began free-falling. Between 2008 and 2013, the U.S. market for Australian wine declined by more than 20 percent.
Finally, though, Australian vintners are beginning to recognize what went wrong -- and working to show America that they make plenty of fine wine. Their efforts could soon pay off.
The collapse is easily explained.
Thanks largely to Yellow Tail, Australia became synonymous with the bargain bin. That became a liability as consumers grew interested in more serious wine. Aspirational drinkers eschewed Australia's cheerful, sweet offerings and instead looked to California and Europe.
Plus, competition at the bottom end of the market is fierce. Conditions there are impacted by currency fluctuations, trade politics, and agricultural policies. So it's impossible to dominate the bargain bin indefinitely. Indeed, as the Australian dollar strengthened, it became harder for Yellow Tail's many imitators to compete. Consumers spending less than $7 per bottle were easily satisfied with alternatives from Chile and Argentina.
Consumers also soured on Australia's expensive wines. Consider the wines of Amon-Ra, which retail for $95 per bottle. Robert Parker, Jr., the world's leading wine critic, awarded the producer's 2012 bottling 97+ points, describing it as "a beast . . . that is densely packed with black fruit." There's an audience for high-octane wines, to be sure. But that market has shrunk dramatically in recent years as consumers have embraced more elegant, food-friendly wines.
David White, a wine writer, is the founder and editor of Terroirist.com. His columns are housed at Wines.com, the fastest growing wine portal on the Internet.