INNOVATION NATION: How Australia’s winemakers are pushing new frontiers in the industry

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The De Bortoli family (l-r) Darren, Kevin, Emeri, Leanne and Victor.

From grape varieties with strange names to low alcohol and preservative free wines, to labels inspired by CD covers, the highly competitive Australian wine industry is constantly innovating in a bid to capture the imaginations of consumers in a nation where New Zealand sauvignon blanc is among their favourite wines.

Expect to hear more about wines made from Mediterranean grape varieties such as Fiano, Aglianico, Pinot Blanc, Vermentino, Greco, Nebbiolo, and even the Greek variety Assyrtiko as winemakers experiment and look to plan ahead to deal with issues such as climate change and the growing interest in food and wine matches.

To find out where the industry is headed, Business Insider spoke to three of the best family-owned wineries in the business.

Taking a punt

For Leanne De Bortoli, a third generation member of the Riverina winemaking family, innovation can be about trusting your gut and taking a punt.

One of the most successful wine launches the family had in recent years was a dry-style rose called La Boheme Act II. Like Apple’s Steve Jobs, who once observed that customers didn’t know they wanted until he showed them what he’d made, De Bortoli, who’s been based in Victoria’s Yarra Valley for 25 years, remembers the push back she faced after announcing plans to make a non-sweet rose wine. It was a revolutionary idea in a country raised on Mateus.

“We travel quite a bit and look at trends overseas, but we also focus on making the type of wines we like to drink,” she said. “We used to scoff down pale dry rose wines like there was no tomorrow, so we came home and said why don’t we make one?”

De Bortoli’s attractive La Boheme range

But resistance came from the sales and marketing team, who told her there was no demand for dry rose in Australia. When she pressed on with her husband, De Bortoli chief winemaker, Steve Webber, making it from pinot noir grapes, while the sales force warned most of it would have to be sold via the cellar door because it wouldn’t work in retail.

However, the pretty Art Deco label and salmon pink coloured wine, which sells for under $20, proved irresistible to the public and now the company is scrambling to keep up with demand.

“Data tells you were you are now and where things have been, but it doesn’t tell you about the future and sometimes you have to take a punt,” De Bortoli said.

The La Boheme range has since been extended to include a Riesling, a Pinot Grigio and red blend of Shiraz and Gamay, which produces a lighter style.

Labelling is a key area where innovation has come into play. The company is gearing up to make Prosecco, the Italian sparkling style, a Summer hit and produced an eye-catching bright label featuring a woman on a boat to appeal to a young female audience. De Bortoli says one thing she’s noticed from the younger winemakers is the labels “almost look like CD covers”.

The Prosecco label.

“Labels were very traditional in the past, but if you’re trying to attract the younger consumer now it’s a cluttered environment,” she said. “We’re trying to describe how you drink the wine rather than the contents.

“It needs to talk to a consumer and say ‘yeah, that’s me’. A lot of people don’t care about the side of the hill it’s grown on.

“It’s about making interesting wines and funky labels and getting people to try different wines.”

She admits that being a family-owned business makes things a little easier because “if we have this conviction about something and are prepared to back it, you can go for it”.

Of course one of the challenges is that the payoff for a winery is much longer than the usual return on investment expected in other businesses. On average, it can take around five years – from planting vines to bottling – for an idea to come to fruition.

And sometimes you can be ahead of the curve, she says, noting the success supermarket chain Aldi is having with a Chardonnay-Pinot Grigio blend.

Pinot grigio is a staple of Italian winemaking and no stranger to the De Bortoli family, but it’s only recently come into fashion as Sauvignon Blanc drinkers started to look for alternatives.

De Bortoli produced the same combination eight years ago, using grapes from the heavily Italian-influenced King Valley, in Victoria’s north, but despite a lot of favourable media coverage, it didn’t find a market. Now, she thinks the time is right for a revival of the combination, observing that blended wines – using more than one grape variety – are also growing in popularity and getting plenty of critical acclaim.

“Innovation starts in the vineyard,” she explains, adding that it’s a relatively new concept for the Australian industry.

“People used to think that winemaking started when the grapes arrived on back of truck, but now they’re focussing on the vineyard.”

For the De Bortolis that’s mean making their own compost for the vineyard and a shift to biological farming.

“We really like doing unsexy things like doing our worm count in the soil. We get so excited when they go up,” she said.

Climate change is also driving innovation, with the warmer temperatures favouring Mediterranean grape styles, especially in the Riverina, where the De Bortoli mother ship winery continues to produce some of Australia’s most famous wines, including the sweet dessert wine Noble One.

Italian varietals such as Greco and Fiano are being trialled, while a small block of the Alsace grape pinot blanc has been planted in the Yarra and in the King Valley, sangiovese, the grape of Tuscany’s famed Chianti, is being grafted onto old Shiraz rootstock.

Grafting is an innovation that gives De Bortoli a crop the following year, rather than having to wait at least three before the first grapes appear.

“We think they might be some of the exciting varieties of the future for the King Valley,”she says. “It might take some time, but we’re looking longer term.”

Innovation is also about opportunity, De Bortoli says, which can mean turning disaster into triumph.

Victoria’s devastating 2009 bushfires destroyed a lot of the crop, which lead to a rethink about the way the vineyard was managed to help protect it from future damage.

“Back when lost a few hectares in fires, it was quite devastating, but we thought we may as well make the most of it. We didn’t replant the same varieties, we tried new ones,” De Bortoli said.

“Sometimes out of adversity, you’ve got to see opportunity.”

Lowe hanging fruit

For David Lowe of Mudgee’s Lowe Wines, innovation means focussing low alcohol products in a bid to head off a potential problem.

David Lowe at his winery and cellar door in Mudgee.

Concerned that the federal government “may use a blunt instrument to affect social change via taxation”, two years ago Lowe, as a director of Winemaker’s Federation rounded up collaborators, including one of Australia’s biggest players, Treasury Wine Estate, the British retailer Sainsbury, and two universities with wine in their academic DNA, Adelaide and Charles Sturt, to figure out how to produce lower alcohol wines.

“It’s an innovation cluster to commercialise low alcohol wine for the market,” Lowe explains.

Armed with an Australian Research Council grant, the group have been exploring difference methods to cut back on the booze and “make wines that are socially amenable” to combat a global trend towards higher alcohol wines. It’s an issue that’s partly a result of climate change leading to higher sugar levels in the grapes from warmer temperatures.

Lowe wants to address the social and medical costs of high alcohol, because it also means “we can attract a hitherto not-interested-wine public” to the product. He argues that in a sophisticated food and wine culture, people should be able to enjoy wine with lunch without suffering the consequences of lost productivity from too much to drink.

“We need to provide an alternative,” he said.

For Lowe, innovation is driven by listening to the people who buy his products. Some had complained about physical reactions to wines. The low alcohol project was partly an “unintended consequence of journey to make preservative free wine”.

“My approach comes from conversations with customers to find out what’s real. Not focus groups and market forces.”

Like De Bortoli, he’s focussed on creating a healthy vineyard and an organic approach to produce high quality grapes that don’t need sulphur added to preserve the wine.

The next challenge was how to cut the alcohol levels while maintaining the quality.

“Most low alcohol wines are death by sugar,” Lowe explained. His solution is to pick some grapes earlier, when the sugars are lower, and blending.

The first white wine came out this year, a $22 low alcohol Verdelho and the feedback has been positive. It’s 10% alcohol, much less than the traditional 13-14.5% of many Australian wines. Lowe is aiming for 8% next vintage.

“My aim is to get to 6%,” says the man hoping to change the face and culture of Australian drinking with one of the biggest innovations the industry has ever seen.

Back to the future

Bill Calabria and sons Andrew, Frank and Michael.

When Riverina winemaker Bill Calabria released a $175 Shiraz last week, it seemed almost counter-intuitive for a family (formerly Westend Estate) with a reputation for producing great value wines at a fraction of the price.

But this is no ordinary wine. The 2012 Iconic Shiraz uses Barossa Valley fruit from century old vines. Twenty years ago, the influential American wine critic Robert Parker gave wines made from the same vineyard 100 points. After 50 years of experience, Calabria had his sights set on making a truly great Australian wine. The vineyard had fallen on hard times, was under administration and had been two years before he managed to coax them to sell it to him. The Iconic is proof that he’s the right custodian for an incredible part of Australia’s winemaking history.

The new $175 Calabria wine, The Iconic.

Bill Calabria’s son Andrew is the third generation in the winery, founded in 1945 and told Business Insider that his father is always looking for innovation through evolution.

“For us as a family business, innovation is something that’s long term,” Andrew said.

“The Iconic is something that we planned five years ago. It was about point of difference for us. Everyone knows Australia makes great quality wines, but we also have some of the oldest vines in the world, which still produce great quality product.”

Compared to the wines praised by Parker, Calabria says “this is a completely different wine on the other end of the spectrum,” adding that for too long the local industry “has been carrying stigma for Australian wines being these one glass wonders” with overseas drinkers.

The Iconic is about changing perceptions.

“Without that type of innovation and communicating it to our customers, they wouldn’t give us a second look in,” he said.

For Calabria Family Wines innovation also ranges from doing what’s right for the environment as well as boosting productivity.

They’ve changed the way they filter wines to reduce the by-product to protect the environment

“It’s not about being cheaper, but how do we improve and increase quality, while being more efficient,” Andrew Calabria said. “It’s about the evolution and innovation to adjust to the market and to the consumer.”

The family have long focused on varieties with seemingly unpronounceable names such as Vermintino (a white) and Aglianico and Nero D’Avola (reds) as well as exploring new varieties such as Saint-Macaire, a rare Bordeaux red.

“That’s the beauty of the family business. You’re driven by passion, not by dollars. It might not be right in some people’s eyes, but we’re driven by what we want to do and love and thinking about where to go next,” Calabria said.

“It’s not even in the next 10 years, it’s about the next generation.”

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