Demand remains strong

It’s more than a decade since we witnessed demand for Riverland grapes such as we’ve seen this year. Over that period the Register of unsold winegrapes, published by Riverland Wine each week throughout the growing season has rarely had less than 15,000 tonnes listed in a growing season. This year the register has listed just above 6,000 tonnes in total with barely 1,500 tonnes of all varieties remaining unsold as at the end of January. This contrasts with 23,000 tonnes and 21,000 tonnes at the end of January of 2015 and 2016 respectively.

 

As has been noted in recent weeks, ongoers are beginning to sense a gradual return to more sustainable trading conditions. Broadly speaking prices of most varieties have lifted, particularly the preferred Reds: Shiraz, Cabernet Sauvignon and Merlot but Sauvignon Blanc and Chardonnay demand is also solid. 

With just one significant exception, all of the wineries that purchase the majority of Riverland fruit have sent positive pricing signals. While yields will necessarily remain relatively strong, it is pleasing to see and hear the number of winery intake coordinators encouraging a renewed focus on value and quality of grapes in the vineyard and at the weigh Bridge. There seems to be an emerging preparedness to acknowledge that the region can produce very, very good grapes in response to customer preferences.

Over the past decade and partly because of unsustainable price offers, increasing numbers of growers have explored alternative business models, taking the initiative and it seems, the real risk of having a go at implementing ‘value chain’ principles. Riverland growers sat up and listened in 2009 when South Australia’s Thinker in Residence, Prof Andrew Fearne spent twelve months educating and encouraging primary producers to break away from broken down old supply chain models and to experiment by finding partners prepared to spread the risk more evenly across the chain and in so doing, build more sustainable models. Those leaders are to be congratulated. Most of them have enjoyed degrees of success and in so doing have illustrated that there are better ways, more rewarding ways, more profitable ways of generating long-term returns from growing grapes by stepping beyond the vineyard gate and participating more actively in wine processing and even marketing wine.

To their further credit, these bold, ambitious and generous growers have done much to ease the pressure on the Register of unsold grapes. Hopefully more processors will review their current ‘supply chain’ models and recognise the benefits of working more collaboratively and actively with their suppliers, seeking to build a more sustainable grape and wine industry in Australia’s number 1 wine region.

Just one final observation: the Association has taken many calls from growers this year who feel they are being significantly disadvantaged by current contractual arrangements and are seeking release from long-term contracts that restrict their capacity to embrace value chain opportunities for their own sake and the sake of the region’s economy and therefore its community.

 

Image Source: bymandesigns 

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