Blog #4

            The culture that Australia has created around wine is astounding.    It is an Australian phenomenon born of globalization because the first wines arrived in 1788 from Britain according to the course packet, Scott, and Woody.  Because of the increased demand for bulk, cheap wine, Australia has experienced a significant comparative advantage in the wine market.  This has lead to two main distributors throughout Australia and wine brands such as Fisheye being representative of Australian wine in America.  Scott, our wine guide at Tyrell Wine said that Australia missed a huge opportunity in marketing their wines worldwide.  Instead of focusing on their premium wines, they focused on distribution of cheap, ambiguous wines that are widely appealing, especially for Americans.  Yet, the wine industry in Australia employs around 30,000 individuals and in 2007 had a value of around $42.87 billion dollars according to the course packet. 

            Both Tyrell’s Wines and Tempus Too wineries understand that wine is a commodity, it is not just a hobby or a small business, but they do go about accessing the market differently.  Globalization has brought about changes in the wine industry that wineries have to go along with in order to survive or flourish.  This can be seen at Tyrell’s, Tempus Too, the Hunter Valley, and the whole wine world.  They need to expand their variety of wines and many times, in the example of YellowTail, cater to the tastes of the mass consumer.  Now wineries can connect to the market on a global scale to find larger distribution and consumer base. Tyrell’s has taken advantage of the market by focusing on quality, but that means that when the quality is not there, they feel like they can’t put out their product and be proud of it.  That meant that last year, they could not bottle and distribute their vintage red because it wasn’t up to quality.  This caused them to lose out on a lot of money.  Tempus Two on the other hand has hugely focused on the whole lifestyle of wine.  They appeal greatly to the tourist side of the wine community.  They host large events to bring people in.  Though both wineries has deep heritage in the Hunter Valley vineyards, (Tyrell’s 152 years- Tempus Two, Lisa McGuigan is 4^th generation winery owner), they have gone about it completely differently. 

            Australian wine, I believe needs to find a way to continue to be recognized as major wine producer, but stray from the mass-produced, extremely cheap wine.  If they were able to gain reputation for producing high quality wine as well, it would broaden their marketability.  Scott was saying that in developing countries with increased middle to upper class, they are becoming more and more interested in wine consumption and collection.  If Australia recognizes this potential market, they should try to focus their efforts on these countries, such as China, South Korea and India.  That is being started, because according to the course packet, 38% of Australia’s wine exports are to China.  

Scott from Tyrell's Winery was HIGHLY knowledgable about the wine industry.  He had been working in this industry for around 20 years.  He explained the history of Australian wines and how they are dealing with globalization and the worldwide market.

These barrels are great example of the global market for wine production machinery.  These oak barrels are French oak barrels, but they also use American oak barrels.  They cost upwards of $16,000 and influence the flavors found in the wine.  

The group at Tempus Two, in one of their very nice conference rooms learning about the wines at the Tempus Two vineyard.