Q&A with Austrian wine exporter Franz Hofstätter of Taste of Austria
Cruz Liljegren talks to Franz Hofstätter, founder of TOA (Taste of Austria), who has a wealth of experience exporting Austrian wines around the world for over 15 years.
Austrian wine: an introduction
In sharp contrast to the major European wine growing countries, Austria was able to pull in a 2017 harvest that surpassed the five-year average by 25%. But despite that good news Austria stil only produced 2.5 million hectolitres, which when compared, for example, with the 36.7m heclotitres produced in France, even in a bad year, shows how it is still a relatively small player in global exports.
Family farms, many of whom work with TOA, dominate the Austrian winemaking scene, which means its overall production levels are lower than countries where there is more industrial level production. A complex and varied geographical landscape plays a role too.
Though Austria is largely known for producing white wines, more than one-third of the country’s vineyards, or nearly 15,000 hectares, are planted with red grapes. Varieties such as Blaufränkisch, Zweigelt and St. Laurent are gaining in popularity on export markets.
Despite a slight decline in volume, 2017 exceeded all export expectations. Austria has seen a steep increase in the value of exports now totalling €158.6 million. The average price per litre reached a new all-time high of €3.39.
Austrian wines are generally being perceived as high quality, with average prices doubling those of Germany in the UK off-trade. Due to historical reasons Germany remains Austria’s largest market by value, accounting for around 50% of the market followed by Switzerland and the US.
To get more of an insight into what Austria is producing now and into the future VINEX caught up with Franz Hofstätter.
Statistics show that exports of Austrian wines cracked the €150-million barrier for the first time – is everything as positive at the moment as it looks?
Yes, these are good times for Austrian wines. We have more demand. The US, Canada and Asia are going strong, especially for white and organic wines. The truth is that if the wine is not organic, the packaging or quality/price-ratio needs to be exceptional.
How does your company TOA fit into the Austrian wine business landscape?
Well we started in the year 2002, so we have gained lots of experience in the key markets. We are a bit special because you can find wines from all regions of Austria in our portfolio.
We have three main fields of business. The first one is `Export Administration´, from which we get a management fee from the wineries, but not a broker fee. In this line of work we do everything from customer service, customer support and market travels for all of our wineries.
The second area of work is 'Product Development' where we work with graphic designers to create successful new products. Then we offer an 'Agent' service where an existing importer or a new importer wants us to export certain wines for them and they will pay a fee to us for this service. We do not look for this kind of business, but we take it.
As an export company, how does your relationship with the wineries work?
We do not act as a broker – we are the external export department of each winery. We have a small amount of office space at each winery we work with, but we mainly opertate from our own office due to efficiency and cost reasons. We are in contact with our wineries, either personally or via email and phone, a few times a months. We are much more like their employees than a broker.
Do you encounter clients that are sceptical about working with a middleman? What benefits are there for working with TOA?
We are like an export manager or export person for each winery. The producers do not always have the time or knowledge to do that work. When we are in a negotiation we have two clients – the customer and the winery. I cannot sell a big chain a natural wine with minimum sulphite when I know the wine will end up just sitting on their shelves.
We never recommended a wine if we are not sure it fits the customer of the client. We don’t sell to the gatekeepers. It’s important to understand that we are not a middle man – we act on behalf of the winery. The winery will forward potential customers to us.
What is the USP of the producers and wines you have in your portfolio?
We have small biodynamic farmers, no bigger than 120 hectares. Our wines cover the whole country so we have national styles, as well as a great range of pét-nats (pétillant naturel) and will soon launch a new product with low alcohol, which the market is demanding now.
Thirteen per cent of all Austraian vineyards are organic. What is driving this growing trend?
Well we have played our part and been pushed organic wines since 2006. I see the only chance for us to survive in the globalised wine world is if we manage to increase our share of organic wines. I think Austria will need to have 50-70% certified organic vineyards within 10 years, or we are in trouble.
The "Sustainable Austria" certification regulates the use of the term "sustainability" in Austrian winemaking. Why has Austria opted for a special sustainable certification?
Well, I’m not a big fan of it at all. But it gives the winery’s an introduction to an organic certification. It’s like being 'organic light'.
What are your export markets buying the most of at the moment?
All the developed wine markets are looking for low intervention wines. These are really on trend now.
Rosé is still in big demand and last year the Schilcher rosé from Schilcherland received DAC-status, do you think it can be successful competitor to rosé from Provence?
No, not really, this is a very small area. They have good quality but will never be able to compete with Provence in quantity.