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Priority 1: Increasing demand and the premium paid for all Australian wine

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Strategy 1: Promoting Australian fine wine

In 2019–20, we delivered the Far From Ordinary campaign, the largest single campaign in Wine Australia’s history, in the USA. This campaign combined the desire for bigger and bolder activities with a significant increase in social media and digital engagement.

Investments were made in driving digital engagement through a media partnership with Bon Appetite in the USA and continued investment with Wine Spectator and Wine Enthusiast. We developed a significant retailer and distributor promotional calendar that was coordinated alongside a six-city roadshow and a three-night consumer activation, that saw hundreds of Australians actively in the market promoting Australian wine.

All Far From Ordinary activity was underpinned by the ‘Made Our Way’ brand platform and it culminated in our key influencer event ‘Decanted’ at Lake Tahoe in October 2019.

AWD, launched in January 2019, was integrated across all global programs. AWD was promoted through a major social media campaign that ran from February to June 2020, achieving significantly higher than benchmark results in LinkedIn in all our key markets. Downloads of AWD educational material following its first annual content review have spiked considerably and this award-winning educational platform goes from strength to strength.

The content services a wide community of users including importers, wineries, retailers and consumers. In China, AWD benefited from the launch of the Wechat Mini Program, which allowed Chinese users to download the information within the WeChat environment, enhancing the user experience and making in it exceptionally easy for users of the AWD material to benefit from this key investment.

We hosted the 7th annual Wine Australia China Awards Gala Dinner in Shanghai in November to recognise and celebrate our Chinese wine community. The CIIE and Prowine expositions ran concurrently in Shanghai in November, making it an exceptionally busy time to promote Australian wine.

In January, we launched a consumer-facing WeChat channel and invested significantly in promoting social and digital content to a consumer audience, allowing us to maximise the Australian Wine Made Our Way brand platform in China. This activity drove more than 50 million impressions and engagement with more than one million Chinese wine consumers. With the relaxation of pandemic controls in China, we were able to increase delivery of more traditional AWD workshops in key cities across the country.

Through the $50m Package, we were able to capture engaging digital content in 18 key regions involving over 300 personalities. This has allowed us to tell the stories of our people and places globally through an ‘always on’ paid social strategy, while continuing to populate content on our consumer website, www.australianwine.com. Assets produced for this project have been made available to the sector through Wine Australia’s Digital Asset Library and are being used in all key markets.

In the United Kingdom (UK) and Europe we continued to focus on key trade awareness across Europe in its troubled Brexit phase. We also undertook the popular four-city Nordic roadshow, our Australian Trade Tasting in London and Edinburgh in January 2020, promoted AWD and arranged key visits from Ireland and Germany. Prowein Germany was postponed for 12 months until March 2021.

In Asia we hosted physical tastings and workshops in Japan and Korea in October and in Taiwan in November, before moving entirely online with AWD webinar tastings for audiences in Hong Kong, India, Singapore and Japan.

In the first half of the year, we hosted influential media from Europe and Asia Pacific and key buyers and sommeliers from Ireland, Finland, Sweden and Canada before our visits program was cancelled because of ongoing travel restrictions

Strategy 2: Protecting the reputation of Australian wine

Label integrity

Wine Australia has coercive powers that allow its inspectors to enter wineries and inspect records kept under the Label Integrity Program (LIP) to ensure the truth of claims made on wine labels, or made for commercial purposes in other ways, about the vintage, variety and geographical indication of wine manufactured in Australia. In 2019–20, we conducted 150 on-site inspections. This was less than anticipated due to the travel restrictions imposed as a result of COVID-19.

We also request records kept under the LIP to satisfy us that the description and presentation of wine exported from Australia is appropriate having regard to the requirements of the Act, other Australian laws and the laws of other countries. To compensate for the reduction in the number of on-site inspections, in 2019–20, we inspected the records for approximately 4000 products to verify the accuracy of labelling claims before issuing export approval.

Export controls

In 2019–20, Wine Australia issued 18,269 product approvals, approved 51,548 shipments and issued 54,933 import certificates. At the end of 2019–20, there were 3,488 export licence holders, 3,101 of whom exported during the year.

The Wine Australia Licensing and Approval System (WALAS), a new system to administer the export controls for Australian wine, was implemented in June 2020. The system manages licensing, product approvals, shipping applications, invoicing, Wine Export Charge declarations and import certification, and provides enhanced access, greater flexibility and self-service functionality to its users.

WALAS brings with it improvements in the alignment of the system with the Wine Australia Regulations 2018 by ensuring LIP records can be uploaded as a precursor to product approval, allowing Wine Australia to ensure the truth and the reputation for truthfulness of wine labels through targeted label inspections.

Label Directory

In 2019–20, we furthered the development of the Label Directory, which was initially proposed by the then Winemakers’ Federation of Australia (now AGW) to allow Australian exporters to identify brands that infringe their intellectual property rights and to subsequently take action to protect those rights.

Wine Australia will administer the Label Directory as part of its export control function.

Amendments will need to be made to the Wine Australia Act and the Wine Australia Regulations to expand our powers in such way that allows us to mandate the provision of labels as a precursor to approving products for export, and to allow us to create a public-facing register.

The Label Directory will be publicly accessible and searchable by image matching as well as text fields.

The initial development will be funded through the $50m Package.

Annual analytical survey

In 2019–20, we commissioned a targeted analytical survey to assess the chemical residues resulting from the use of Mancozeb in vineyards, ahead of new maximum residue limit regulations being introduced in the European Union.

As a result of the COVID-19 pandemic and in an attempt to cut red tape for exporters, we did not insist on the provision of samples to validate compliance with the Australia New Zealand Food Standards Code (Food Standards Code), but rather, we continued to monitor compliance with the Code through the collection and verification of analytical information prior to products being approved for export.

Strategy 3: Building Australian vine and wine excellence

This strategy focuses on the research that will enable the Australian grape and wine community to ceaselessly improve quality, a prerequisite of success in the competitive global fine wine market. We have sought to do this by providing a deeper knowledge of our customers globally and what influences their purchasing decisions, by providing information on Australia’s unique terroirs and how they influence wine style and quality, by developing digital tools to help growers to produce grapes that meet desired quality targets and by developing measures to assess grape and wine provenance and quality. We expect that grape and wine excellence will continue to be a key priority for the sector. A deeper understanding of the potential for Ag+Food Tech solutions to give a significant commercial advantage will position us well for future investment.

With our customer insights research, we focus on providing pre- competitive insights and research-evidenced tools to enable the Australian grape and wine community to grow demand for Australian wine.

During 2019–20 we:

• continued development of a better understanding of how grapevine genetics interact with environment and viticultural management techniques to optimise the expression of terroir.
• developed and evaluated precommercial digital technologies in a portfolio of projects including using sensor technologies to determine whole vineyard nutritional status, characterise canopy size and structure, monitor basic fruit composition and detect disease
• developed a strategy and initiated a project to support agricultural technology (agtech) adoption by the grape and wine sector using demonstration sites from our Regional Program
• updated macro-economic data to analyse Australia’s changing competitiveness in global wine markets
• shared the results of the final year of the five-year research project, ‘Barriers in United States trade for developing premium Australian wine sales’. A final report was published on the website, a Market Bulletin summarising the key outcomes was prepared and the findings were presented at a WCA webinar
• commissioned the annual Australian wine brand health study on 10 key wine markets, and provided key market and customer insights through the weekly Market Bulletin and reports via the website
• engaged regularly with the Insights Advisory Group to facilitate a collaborative approach between Wine Australia and wine producers that will ensure greater alignment in primary consumer research prior to investment, and
• shared business intelligence, insights and analysis with our stakeholders (see Strategy 9).

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Priority 2: Increasing competitiveness

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Strategy 4: Improving resource management and sustainability

Activities in this strategy continued to provide the sector with the information it needs to manage the challenges of short-term climate cycles and long-term climate change, to ensure that grapevine germplasm resources are preserved through a national collection, to better manage endemic pests and diseases, and to maintain freedom from exotic pests.

During 2019–20 we:

• provided the Australian wine sector with data on supply and demand and ensured that the sector had access to key foundation data sets, including a region-by-region survey of vineyard data
• delivered the results of the second National Vineyard Scan, carried out using a machine learning algorithm developed by Consilium Technology with funding from Wine Australia and other sources. The data was used to conduct analysis of the impact of bushfires on Australia’s vineyards.
• provided short- and mid-term climate trends to the sector in the Climate Atlas – in an accessible, usable form
• developed and provided information on practical management strategies to deal with environmental conditions under climate change scenarios that affect grape and wine production and the impact of these strategies on wine quality
• completed the initial DNA profiling of Australian grapevine germplasm collections and prepared a dataset of the planting material held with a view to re-establishing public access to the material in the future
• increased preparedness for exotic pest incursions by reviewing the Viticulture Industry Biosecurity Plan and participating in cross- sectoral projects on pest surveillance and Xylella fastidiosa,
• continued to provide the updated knowledge to prevent, detect and manage trunk diseases and phylloxera via industry articles and regional webinars
• conducted and delivered the 2020 National Vintage Survey, which provides crush and pricing information by region and variety and, for the first time, information on the impact of bushfires on the crush, the 2019 Cellar Door and Direct to Consumer Survey and the 2019 Production, Sales and Inventory Survey.
• delivered four Export Reports, the last two heavily focused on the impacts of COVID-19 on Australia’s export performance, and
• delivered the Global Supply Monitor that provides updates on the global winegrape harvest for the latest vintage and corresponding global wine consumption to give an analysis of the global supply– demand position.

Strategy 5: Improving vineyard performance

Activities in this strategy continued to progress new or enhanced technologies and processes that improve vineyard efficiency such as enhanced or new grapevine varieties, clones and rootstocks that produce improved wine flavour profiles and tolerate biotic and abiotic stressors and improved yield prediction methods.

During 2019–20 we:

• continued to develop new grapevine scions and rootstocks and continued field testing of vines bred for their resistance to mildews
• provided knowledge on the impact of undervine cover crops
• explored several technologies for improved yield estimation, and
• developed a prototype vine nutrition smart phone app.

Strategy 6: Improving winery performance

We continued to invest in new or enhanced technologies and processes that improve winery efficiency in this strategy.

During 2019–20 we:

• continued to develop new yeast and bacterial strains
• evaluated zeolites and magnetic nanoparticles as new strategies to achieve protein stabilisation
• made the activity-based costing online tool available to the sector, together with case studies and a benchmarking database, and
• provided updated knowledge on best practice winery wastewater management though a new factsheet.

Strategy 7: Market access

The international trading environment is becoming increasingly complex and uncertain as trade tensions between major powers threaten existing global trade arrangements. In order to mitigate any impact on the wine sector, Wine Australia continued to pursue its strategy of engagement with key international fora aiming to harmonise or mutually recognise international wine production, labelling and compositional requirements.

Consequently, we worked with our colleagues from AWRI and AGW to ensure the key issues confronting Australian wine exporters were addressed by:

• engagement with the Federation International du Vin et Spirit (FIVS), the international trade body representing the wine and spirits sector (Wine Australia sits on the Scientific Technical Advisory Committee, the Social Sustainability Working Group and the Codex Taskforce)
• the World Wine Trade Group, which met once during the year and is increasingly coordinating wine sector approaches to the World Health Organisation, the World Trade Organisation and to Codex Alimentarius, and
• the International Wine Technical Summit, which met remotely, at which papers were presented on best practice in wine regulation and on inter-laboratory proficiency testing. In particular, Wine Australia contributed a presentation arguing that disproportionate regulation of the legitimate wine market may have the unintended consequence of driving further growth in the production and supply of illicit, potentially dangerous, alternatives.

We complement these influences on the international wine regulatory agenda by maintaining comprehensive guides to the technical requirements of 36 major international wine markets. Each of these guides was reviewed during the year, providing an essential reference for the Australian wine exporting community.

We continued to identify disparities between authorised winemaking practices in our major markets and those permissible under the Food Standards Code and to consider ways in which such disparities might be addressed.

We strengthened our relationship with the UK Food Standards Agency to ensure no disruption to trade in wine between Australia and the UK following that country’s departure from the European Union.

We provided trade negotiators with a compilation of technical measures that could be addressed during discussions towards a free trade agreement between Australia and the European Union with a view to facilitating wine trade into European markets.

We provided trade negotiators with a compilation of technical measures that could be addressed during discussions as above between Australia and the UK with a view to facilitating wine trade into the UK.

Strategy 8 Building capability

To drive the sector forward and build value through innovation, we invest in developing the leadership capability of those working in the grape and wine community across the value chain, including researchers.

Fifteen emerging leaders from across the Australian grape and wine community graduated in November 2019 from the intensive five-month leadership development program, Future Leaders, ready to make their contribution as confident, committed wine sector professionals.

We conducted the inaugural Future Leaders coaching mastery program, undertaken by 15 alumni who then coached a Future Leader participant. Given the change and uncertainty occurring as a result of the bushfires and COVID-19, we arranged several online professional development programs for the alumni including a Virtual Leader Skills webinar, a Navigating Uncertainty program focussing on practical tools to navigate mental wellbeing and access to a number of online governance training modules through the Australian Institute of Company Directors.

Research capacity was maintained by continuing to offer support for PhD scholarships. Joseph Marks from the University of Adelaide was the inaugural recipient of the Dr Tony Jordan OAM Award, which recognises the most outstanding applicant among a field of exciting and high-calibre candidates. Mr Marks will be investigating how under-vine cover crops affect arbuscular mycorrhizal associations (the symbiotic relationship between plant roots and fungi that allow plants to capture nutrients), soil organic carbon composition and soil carbon stocks.

Travel bursaries that extend knowledge through global collaboration and support for early career researchers to undertake regionally focussed research will continue but are on hold pending changes to COVID-19 restrictions.

Strategy 9: Business intelligence and measurement

Wine Australia encourages evidence-based and data-driven decision-making through the collection, presentation and dissemination of global wine sector intelligence. We act as the sector’s information hub, responding to stakeholder queries in an accurate and timely manner.

In 2019–20, there was a continued focus on market reporting of sales trends across price points, channels, varieties and wine-producing regions. We engaged closely with the Insights Advisory Group and other wine businesses to keep abreast of the latest trends and issues.

During 2019–20 we:

• made enhancements to the website layout and introduced new report to support provision of information for growers.
• updated the Market Explorer tool and produced deep-dive market insights reports on China, the USA and Australia to assist wine producers identify opportunities for growth.
• delivered regular retail sales trends reports for the USA, the UK and domestic market
• prepared 45 Market Bulletins with the advent of the COVID-19 pandemic, we focused on providing weekly insights into the impacts of the pandemic on our key markets. This including providing updates to the Boards of Wine Australia and AGW, and
• provided presentations at conferences, workshops and webinars and regular contributions to a range of sector publications to keep the sector informed of the latest information, trends and analysis.

Monitoring and evaluation

Performance evaluation is critical to ensure we are adding value to our levy payers and stakeholders. For us to assess the return on the investments we undertake, we need an evaluation framework. This is true for both RD&E and marketing activities.

In 2019–20, we engaged independent economists to conduct benefit–cost analyses on a range of RD&E activities and for the first time on marketing activities.

An independent economist was also engaged to provide an assessment of the economic contribution of the Australian wine sector to the Australian economy.

Priorities 1 and 2: Extension and adoption

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Strategy 10 Extension and adoption

To ensure the Australian grape and wine community obtains the full benefits of its investments we use a range of delivery networks, programs and partnerships with trusted wine sector organisations to disseminate R&D outcomes and encourage the adoption of new technologies and practices.

We focus on supporting a clear pathway to market for R&D, from the initial project design to the extension of the results.

Our Regional Program is a valued vehicle for promoting the adaption of research outcomes and to deliver extension and practical trials that meet regional priorities.

We continue to communicate practices with our many audiences clearly and effectively.

During 2019–20, we:

• conducted an independent review of Wine Australia’s approach to extension and adoption. With sector stakeholder input we developed a national extension and adoption strategy that will guide future planning.
• identified and showcased four case studies resulting in successful extension approaches and outcomes as part of the review:
  Growing Wine Exports, Grapevine trunk disease, Demonstration vineyards and Brettanomyces.
• began implementing the results of the review to achieve the best outcomes for our levy payers and the Australian Government. This included expanding the role of the AGW Research Advisory Committee to provide sector advice guiding extension priorities, a move towards targeted adoption programs drawing on innovative approaches to behaviour and practice change, and a focus on demonstrating agtech and enhancements to our Regional Program.
• continued a focused communication campaign to extend the top five new oenological and viticultural practices to the sector.
• continued to refine our approaches to better collect information on the effectiveness of our events and products in encouraging practice change.
• developed and updated tools and resources to facilitate practice change.
• maintained and supported the ongoing partnerships with our 11 regional clusters to deliver extension and practical trials that met regional priorities.
• continued our significant support of the AWRI helpdesk to provide a free-of-charge advice service to Australia’s grapegrowers and winemakers who pay the Wine Grapes Levy and/or Grape Research Levy. Advice is available on technical issues from experienced winemakers, viticulturists and scientists.

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Supporting functions

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Strategy 11: Corporate Affairs

Our corporate affairs and strategy function supported clear and effective two-way communications with internal and external stakeholders. This included media relations, government relations, corporate planning and reporting, and internal communication. Through our targeted and timely communications, we help our grape and wine business stakeholders to do business better. We communicated the latest research outcomes and analysis, marketing activities and regulatory requirements through our weekly Market Bulletin, monthly Wine Australia News and RD&E News and bimonthly Exporter News.

In concert with AGW, we consulted with our stakeholders around the country to understand their priorities for our new Strategic Plan.

We used a multi-channel strategy to ensure that our stakeholders had access to the latest information on how to manage the effects of fire on their vines and how to measure the impact of smoke on their fruit, as well as the assistance available to manage the economic and psychological impact of fires. With the COVID-19 pandemic, we again used all of our communication channels – and added webinars – to communicate the effect of the pandemic on supply and demand and strategies that businesses could use to respond to the changed conditions.

We maintained strong and productive relationships with all of our stakeholders, including levy payers, AGW, the Australian Government, state governments, state and regional associations, export partners such as Austrade, sponsors and tourism associations.

Strategy 12: Corporate Services

Finance and administration

The finance and administration team focussed on providing the business with timely and accurate reporting to enable effective decision making, financial management and budgetary control, through:

• budget preparation, management and reporting, including regular reviews and reforecasting
• annual financial statements and audit sign off, and
• adherance to operating reserves policy.

We enabled cost-effective operations through the efficient and timely provision of a range of support services.

People and culture

Wine Australia has focused on supporting employees and maintaining their engagement and performance through the COVID-19 pandemic. The COVID-19 Pulse survey showed that staff had confidence in Wine Australia’s response to the pandemic and they felt supported. Staff felt they had what they needed to effectively work remotely, and they felt connected to their manager and colleagues.

Ten contractors and two permanent employees left the business at the end of June because elements of the $50m Package were finalised. They were offered outplacement services and support from our Employee Assistance Program.

As part of a review of Wine Australia’s governance framework all the Human Resources and Work Health and Safety policies were reviewed. We also launched a new on-line learning platform called ELMO learning. Staff have received communication and training about all the revised policies via ELMO, and have access to over one hundred on-line courses.

Risk management

In 2019–20, we conducted a review of our risk management practices. In April, the Board approved a new Risk Management Policy and Framework that:

• explains how risks are identified, assessed and managed, and
• establishes a framework that underpins the management of risk.

The Framework is aligned with and reflects existing standards and guidance such as AS/NZS ISO 31000:2009 – risk management – principles and guidelines.

The Framework acknowledges the importance of engaging with risk in our operating environment to deliver programs that are innovative, efficient and dynamic and recognises that a positive risk culture promotes an open and proactive approach to managing risks.

In conjunction with the approval of the new Framework, the Board set its risk tolerance against six defined risk categories as illustrated in Figure 9.

At an operational level, risk was managed through regular meetings of the Risk Management Committee, which provides risk reports to each meeting of the Audit and Risk Committee. The Audit and Risk Committee reported on risks to the Board every six months.

Information communication technology (ICT)

Our fit-for-purpose ICT continued to support our team by giving our people the necessary tools to deliver.

During 2019–20, we continued to build upon the IT reliability and security focus of 2018–19. We implemented multifactor authentication across our Office 365 environment for all users (employees, contractors, consultants and Board members). We reviewed and updated our Business Continuity Plan for our Regulatory Services functions and undertook a Disaster Recovery test of our Adelaide data centres.

The Wine Export Approval system replacement project progressed well with WALAS going live on 8 June 2020. Post go-live defect management has been tracking well with the warranty period ending in early September.

We completed request for proposal processes for two key projects; migration to the cloud for our Adelaide data centres and an interactive dashboard for export reporting. This ensured we had vendors selected so these projects could start as soon as possible after WALAS went live.

A comprehensive IT project roadmap has been developed, following extensive consultation with each department, to deliver future IT needs commencing in 2020–21.