(This is a version of a print feature written for National Liquor News earlier in the year. It’s worth reprinting here as Prosecco is at an interesting point in Australia. Note also the different tone to Australian Wine Review, which hopefully isn’t out of place).
Australian Prosecco – a state of play
For over a century, Champagne has been the global celebratory wine of choice. The undisputed king of premium fizz, with only a wake of Champagne-like sparkling wines as competition.
But, more recently, things have changed. Suddenly, Champagne – and the Australian sparkling white wine category – has seen the rise of a bubbly contender. A challenger that has already taken a bite out of Champagne with a 1.8% volume decline over the last 12 months.
Enter effervescent Prosecco.
In recent years, this variety/style has outperformed nearly every category in the industry, with volumes increasing at apace.
Daniel Bone, Insights Director of IRI, has the numbers:
‘(Prosecco) has generated an additional $51.5M in growth over the last two years – a 99% increase’ he said.
‘Only rosé and Shiraz have recorded more significant dollar gain over this timeframe’.
Strictly speaking, Prosecco is not vying for the super-premium mantle of Champagne – it’s not in that $40 price point. Instead, premium Prosecco has proven to be a viable option for consumers trading down from Champagne for imported fizz. The best Prosecco has all the cache of imported Champagne, without the pricetag.
One of the most hotly contended premium price segments is proving most important for Prosecco, as Bone explains:
‘Products priced $15.00-19.99 (+29%) have accounted for the overwhelming majority of Prosecco growth for the past two years, followed by value-orientated offerings priced at $8.00-14.99 (+42%)’ he said.
‘Prosecco has generated significant sales momentum from a newfound social currency in today’s evolving drinking culture’.
For all the love, for all that explosive growth, Prosecco has its existential crisis. Locally, the very name Prosecco is in danger, amidst a host of challenges globally that may impair long term growth.
But are these just minor speed bumps for what is proving to be a new hit category?
For a place to start locally, look at one producer who has taken a clear lead in the domestic Prosecco stakes – Brown Brothers. Amy Van Bekkum, Senior Brand Manager, Brown Brothers, sets the scene:
‘Brown Brothers continues to lead the Prosecco category as both the number one brand and SKU’ she said.
‘Brown Brothers Prosecco NV 750ml is Australia’s number one and favourite Prosecco and the number five contributor to growth in total wine and number two in total Sparkling (inc. Champagne)’.
Given the Brown family’s outstanding commitment to innovation (primarily via their Kindergarten winery), it’s unsurprising that they are both early adopters and market leaders.
But the Prosecco connection goes deeper than that.
Brown Brothers are amongst a squad of King Valley producers who have championed Prosecco, setting up a winery trail known as the Prosecco Road. The Valley is now labelled as ‘Australia’s home of Prosecco’.
Another King Valley producer to find Prosecco success is Dal Zotto Wines.
Now headed by brothers Christian & Michael, Dal Zotto is the original King Valley Prosecco estate, with the Dal Zotto boys’ father Otto planting the Valley’s first Prosecco vines back in 1999. Otto himself grew up in the town of Valdobbiadene, the birthplace of Prosecco, and naturally wanted a little slice of home.
What started as 300 vines is now big business, with the Pucino Prosecco a 50,000 case line. The family are also some of the most passionate supporters of Australian Prosecco and remain at the forefront of the battle to keep the name locally.
For Dal Zotto, the secret to success has been an uncompromised approach, as Michael Dal Zotto noted recently.
‘We believe that quality is the answer’ he said.
‘No matter what happens, we know that if we have great wines, then people will keep coming back’.
Dal Zotto now has a whole smorgasbord of different Prosecco styles, ranging from the pure and fresh Pucino right through to the complex Tabelo Col Fondo. The Tabelo notably uses a portion of dried grapes – a winemaking method used in traditional Prosecco production, but not used commercially in Australia.
Beyond the Valley, other makers are enjoying success with premium wine styles too.
Domenic Torzi at Torzi Matthews makes a sophisticated Prosecco that has serious appeal, the quality driven by fruit off an elevated site high up in the ‘Riesling country’ of the Eden Valley.
Torzi believes that the site helps give a ‘textured mouthfeel and brininess’. He uses some exposed, ripe bunches (used) to produce a supercharged dry wine base before secondary Charmat ferment’.
Of course, it’s not just local premium Prosecco that is on a roll. The original Italian Prosecco DOC was enlarged by 3,000 hectares back in 2016 to keep up with demand, with 446 million bottles produced last year.
That expansion hasn’t come without growing pains, however.
Northern Italy’s University of Padua recently examined the ‘soil footprint’ of premium Prosecco and calculated that it is responsible for 74% of the DOC’s total soil erosion. Each bottle directly results in the loss of 4.4 kilograms of dirt.
Interestingly, in the UK Prosecco’s popularity has also plateaued, with volumes dropping by 3 million bottles in 2018, leading to some predicting that the UK market has already passed peak Prosecco.
Still, there is no doubting the ongoing popularity of imported Prosecco in Australia, across retail and on-premise.
Notably, imported Prosecco price trends broadly follow those of local products too, with a range spanning affordable options to $25+ premium products.
Mark Singarella of wholesaler/retailer Vino Bambino has seen this first hand, with one wine sticking out:
‘Currently, the Salatin DOC Treviso Extra Dry NV is most popular as it’s the most affordable’ he said.
‘And the style has a little more residual sugar around 14 grams per litre.
But the choice, according to Singarella, comes down to demographics. More upmarket areas choose DOCG vintage Prosecco, while the bulk of drinkers still opt for the DOC NV.
Indeed, the defined levels of quality (and the centuries of history) is an edge for Italian Prosecco. From standard Prosecco DOC right up to the village defined ‘rive’ wines, there exists this clearly identifiable hierarchy. That helps push up prices and encourages premiumisation (god I hate that word) – something which the local industry struggles with.
That’s born out in the figures too, as Bone notes, with the push for more Prosecco coming at the expense of dollars per litre.
‘Prosecco volume growth (both litres and units sold) has outpaced dollar growth over the past 12 months’ he said.
‘This accounts for the 2.1% decline in price per litre, which contrast with the 4% price per litre increase observed in the category’s largest growth driving varietal, rosé’.
Speaking of rosé, pink Prosecco could well be the next big thing. The ultimate segment winner with a possibility to mirror the success of other pink drinks (like pink gin).
Technically, however, pink Prosecco it is not even a thing, with Italian Prosecco producers unable to label their rosé sparkling wine as Prosecco. That will change, with the Prosecco DOC Consortium under pressure to open up the rules. Estimates stand that the total production of rosé Prosecco could reach 30 million bottles per year.
Locally, producers have been quick to capitalise, as Van Bekkum explains.
‘With both the Prosecco and Rosé categories on fire (the number one and two fastest-growing categories in wine) Prosecco Rosé really is the perfect wine!’ she said.
‘Growing +73% vs YA we will continue to invest to drive Prosecco Rosé in the future’.
Globally others are excited by pink Prosecco too, with Henkell & Co. CEO Andreas Brokemper recently noting that this style ‘fits perfectly’ with the brands in his portfolio. The Freixenet Italian Sparkling Rosé has enjoyed massive growth, so why not.
Sadly, the elephant in the room for any domestic Prosecco discussion remains the name. In 2009, Italian producers registered Prosecco as a GI and changed the grape name to the deadly unsexy Glera.
Naturally, this infuriated Australian Prosecco producers who (rightly) see this as a land grab of the worst kind. That’s despite the Italians already losing in previous court cases trying to force local producers to stop using the name. But many fear that the name will be collateral damage for a new EU trade deal (due shortly).
In opposition, producers like Michael Dal Zotto have been very passionate about standing up for Australian Prosecco. He noted in a recent interview that ‘it’s been known as Prosecco since the beginning of time, so why all of a sudden should that change and why should we allow it to be changed?’.
One proposal – and shouted down by local producers – is allowing the term ‘Prosecco-like’. Instead, Prosecco will likely be used for local labelling with a nod to Glera (or something else) for exports. Dal Zotto has already registered Pucino and will likely use that if all else fails. Torzi, too, ‘registered ‘Secco di Glera’ a number of years ago full knowing this would eventuate’.
Still, it may not happen with Dal Zotto telling The Shout recently that ‘So far the trade ministers and negotiators have all held firm and we really hope that they continue to do so.’
Beyond the name fiddling and pink Prosecco, the next frontier remains format – and especially Prosecco in a can. The numbers are already substantial, as Bone notes:
‘The movement into canned wines observable across the category has delivered over $2M in incremental dollar growth for the prosecco segment, albeit from a near-zero base’ he said.
Yet this growth comes at a cost:
’This has also played a part in more significant $/unit reductions of -4.6%’.
Viewed as a long term strategy, however, the move into cans is understandable as it taps into the convenience market. It edges out of wine and competing with categories like cider and beer.
Finally, one of the other crossover products enjoying recent success is the Prosecco Spritz. Emma Brown from Brown Family Wine Group explains:
‘(Prosecco Spritz) is about unlocking growth in the Prosecco category through creating new occasions and appealing to refreshment trends’.
With big brands like Jacobs Creek and spirit competitors like Aperol now wading in, the ‘aperitivo’ market is becoming hotly contested.
Could the ultimate category fusion wine – a rosé Prosecco Spritz – be next?