New Australian entrants to the US wine market must focus on niche market sales, the Australian wine industry has been told.

Mr John Grant, executive president of Kendall-Jackson Winery and former marketing director with Southcorp, told the ANZ Australian Wine Marketing Conference that new entrants should seek opportunities with regional and niche suppliers rather than trying to develop relationships with distributors whose books were full.

He said the US market was becoming more profitable as people were "trading up". Small and medium wineries should build Australia's regional awareness, focus on signature wines, such as Shiraz, aim at the higher end categories, target the restaurant market and utilise small regional distributors, he said.

Jonathan Scott, the executive manager of the Australian Wine Export Council, said a clear message from the conference was that over the next three years marketers were going to face a tougher environment in which to convert opportunities into sales and brand outcomes.

The industry was told its challenges would come from a synchronised global economic slowdown and more aggressive wine marketing programs from its competitors such as France.

"Capitalising on the strength of the Australian personality, promoting wine as part of everyday life, not a formal occasion beverage, being aware that female wine consumption is increasing and that there is a predicted move towards lower-alcohol, food-friendly wines were good take-home messages for the industry from the conference," said Mr Scott.

In terms of the industry's performance since the launch of its marketing strategy The Marketing Decade in 2000, Mr Scott said the first year's sales targets had been exceeded and that a review of the demand outlook confirms that opportunities were still there for Australian wine.

With regard to supply, Mr Scott said despite sales meeting the demand targets, grape supply pressure was building. "Forward estimates of supply indicated that these now would be greater than previously assumed due to the higher than expected rate of new vineyard plantings," he said.

"In this more challenging business environment, in order to prosper grapegrowers and winemakers will have to ensure they are in tune with marketplace demands, price requirements and have effective distribution and marketing strategies in place."

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