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Will domestic sparkling wine volumes grow again in Australia?

It’s the time of year in Australia when sparkling wine, summer fashion and horses can combine: Spring Racing Carnival. Complete with a ‘selfie station’, a ‘Hamptons-style’ makeover, and its very own Fashion Director (style blogger, Lana Wilkinson), The Terrace is a VIP pop-up bar destination at the Melbourne races. The Terrace is a clever initiative led by Yellowglen – the most frequently purchased sparkling wine brand in Australia, according to our latest Australia Sparkling Wine Report published this week.

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Yellowglen started to establish its connection to fashion a few years ago, hosting hour-long “Style & Tasting” tasting sessions in Westfield shopping malls, which used fashion as a reference point to help consumers develop their palate and understanding of the brand range. The development of these events, extended now to The Terrace, shows a savvy understanding of recent consumer trends. Beyond the world of wine, the continued attraction to being part of something both temporary and exclusive is sustaining the global pop-up phenomenon. Meanwhile, from an alcoholic beverage category perspective, consumers are increasingly attracted to drinks which support their lifestyle and desire for refreshment.

And it’s a wise move to innovate in the sparkling category in Australia right now, and not just because we are gearing up for the festive season.  Even though we’re a small population, nearly a quarter of the adult population drink sparkling wine at least once a month, making Australia the 10th largest sparkling wine market by volume.

However, mirroring the sluggish growth trends seen in the still wine market, the Australian sparkling wine market is seeing declines in volumes, led by a shrinking consumption of domestic sparkling wine. Meanwhile, the smaller market of imported sparkling wines continued to grow last year. Our report shows how French Champagne, New Zealand sparkling, Italian Prosecco and Cava are all being consumed more frequently than two years ago. As a result, consumers are faced with an even bigger choice of sparkling wines to choose from.

As the dollar continues to weaken, we may see this pattern of imported growth change. However, the effect on consumer behaviour is unlikely to revert: Australian sparkling wine drinkers are now used to the diversity of choice and price points for their fizz, and are willing to experiment to find the brands which best suit their palates and wallets.