Strategic attack

Some things never change. You know that Glastonbury will be a mudbath, that Scotland won't qualify for the second stage of the World Cup, and that wine lists will have more French wines than anything else. While its share is dropping in the off-trade - currently hovering around 27% - France retains a 50% share of the on-trade.

Looking more closely at the on- and off-trade league tables, it appears that on-premise sales are stuck in a time warp, with the main Old World countries having an 82% share of on-trade business, while the New World makes up a niggardly 13%. The off-trade, meanwhile, has undergone a revolution, driven by the New World. There the Old World's share has shrunk to 64%, while the New World is closing fast with 21% of sales.

Something strange is going on. Is it simply that people are happy to buy New World wines in off-licences and supermarkets but revert to their old ways as soon as they walk into a restaurant? Or is it that they're not being offered the styles of wines they like when they dine out?

Figures suggest that French wines are six times more popular than Australian in restaurants, but only three times as popular in off-licences. It would be wrong to suggest that both sectors should replicate each other, but such a large discrepancy suggests the on-trade is missing out on a known shift in public preference.

Inevitably the situation is more complex than the bare statistics imply. For starters, in the early days of the Australian boom, producers virtually ignored the on-trade and instead concentrated on building a solid distribution base in the off-trade. Higher volumes were guaranteed, the wines reached a larger number of people in a shorter period of time - and it cost less. Californian producers took the opposite approach - and paid the price.

building brand equity

"There was a focus on the off-trade when we started in the UK," says David Hodgson of Australian producer Rosemount, "but we had to concentrate on our core business. It was a wonderful way of building brand equity and getting recognition. If we hadn't, both markets would have been slower in becoming fully established."

This strategy, which was replicated by virtually every Australian producer, paid off in terms of high street presence for the wines, but the concentration on off-trade listings had a downside when the time came for firms to look at getting restaurants to stock their wines. In some ways, Australia paid for its success. Restaurateurs were reluctant to take on wines that they saw as "high street" brands.

Even when Australian wines began to appear on wine lists, the restaurant trade appeared to view them with a certain detachment. If they were on the list at all, it often looked like a token listing.

"Lots of restaurants tend to have short lists with slots for generic, mid-priced Australian Chardonnay or Shiraz," says Peter McCombie at Bibendum. "Once they've got one, that's it. Despite the fact that they wouldn't do the same with Burgundy, it's been hard to convince restaurateurs that they need to pay that bit more and take classy wines such as Katnook or Yeringberg seriously."

So not only did the Australians take the decision not to court the on-trade from the word go, but once they did, they were faced with a trade sector that remains inherently conservative. "The on-trade has had a Francophile tendency," says Hodgson, "and it's only now beginning to buy some good New World varietals. It comes down to tradition.

"Perhaps it's natural that the ‘older' restaurants have been slower to take on Australian wines - after all, they could upset their regular customers by suddenly changing their list. It's up to us to find ways to work round this."

On the positive side, there is evidence that the old worries about replication of "high street" brands are beginning to lessen. "The on-trade in general is more modern and brand-conscious these days," says Tom Sillar at Southcorp. "All Bar One, for example, is selling vast quantities of Lindemans Bin 65, while the Penfold's brands are getting good listings.

"Wines that we couldn't get listed three years ago, like Bins 707 and 389, are now being asked for. A few years ago, trying to get people to even look at them was like pushing water uphill."

on-trade exclusives

That said, some producers are beginning to offer the on-trade exclusive labels. Geoff Merrill has Owens Estate (the on-trade version of Mount Hurtle) while Southcorp has developed a range of private labels, each exclusive to its regional distributor, such as Morgan's Bay from Michael Morgan or Kirkton Vale from Anthony Byrne. It has also developed two Penfold's brands just for restaurants.

Rosemount is also going down this route and has a range of blends exclusive to the on-trade. "We're looking to build the on-trade portfolio with a range of varietals," says Hodgson.

The on-trade strategy is being given a further boost by Rosemount offering a selection of its top single vineyard wines - Orange, Giant's Creek, GSM and Blue Mountain - to the on-trade first.

McCombie has noticed this drive for the top end of the market. "There has been a sudden interest in quality Australian wines and restaurants like Quo Vadis are listing older vintages of Australian wine and building a list of Grange."

He takes this willingness to accept top-quality Australian wines as evidence of a generational shift in the restaurant trade. Southcorp's Sillar agrees. "The average age of the chefs is younger," he says. "Guys like Gary Rhodes, Gordon Ramsay and Marco Pierre White are used to drinking Australian wines every day. They don't see anything unusual about it. The average age of sommeliers has also fallen and the collapse of the old French sommelier image has had a beneficial effect."

Suppliers are also becoming more proactive in dealing with the on-trade. Southcorp, through its regional wholesalers, is tailoring promotions and incentives to suit restaurants and hotels. Rosemount has increased its on-trade sales team and runs tastings with kitchen brigades and food and beverage staff.

Clearly, the restaurant trade is missing out on a chance to tap into genuine public demand. It's not a matter of saying all Australian wines are great, so get rid of your French range, but rather a matter of realising that there is a need for better-balanced wine lists. Producers, agents and restaurateurs should work together to maximise this opportunity. n