The Sparkle In A Bust: Why Australian Sparkling Is Where Smart Wine Money Goes

The Australian wine industry is in crisis, but one category is bucking the trend. Now it needs capital and punch.

Last month’s National Vintage Report put the 2026 crush at just 1.27 million tonnes, down 19% year-on-year, the smallest harvest this century. Red production collapsed by 29%, and exports declined to their lowest level since 2004. As set out in From Boom to Surplus, this is a structural shift that will continue amid oversupply, declining per-capita wine consumption in developed markets, and premiumisation pressures that have hollowed out the middle market.

Within this crisis sits an outlier. One category has held its ground globally while every other style has fallen. Australia is building world-class credentials in this space – but not fast enough or far enough.

That category is sparkling wine.

Where sparkle still grows

Over the past two decades, sparkling wine has grown faster than any other category. As of 2023, sparkling wine accounted for 20% of global wine sales by value, despite representing only 7% of global wine production.

While consumption has slowed, the category has reached US$55B. The nuance is the real story: growth has moved to both ends of the category.

• The accessible end is growing: sparkling is now a wine for all occasions (Prosecco DOC increased by 1.1% to 667 million bottles and Crémant has grown +44% over the past five years, with an average retail price of around AU$11)
• The premium end is expanding (Prosecco DOCG grew 8% to 98 million bottles and Cava’s ultra-premium Paraje Calificado nearly doubled, even as Cava overall fell 13%)
• The classic centre is contracting (Champagne has shrunk every year since its 2022 peak, down another 2% in 2025 to 266 million bottles, with revenue falling 12%)

In addition, no/low alcohol wine has grown by 8% per annum over the past decade. With sparkling wines making up half of the category, reaching around 160 million bottles, this is the fastest growing segment in sparkling.

Australia’s competitive advantage 

Sparkling wine thrives in cool climates. High acidity, low alcohol potential, and tension between fruit and minerality create complex and age-worthy sparkling that can compete with Champagne.

Because of this, Australia already produces critically acclaimed sparkling wines at AU$30-50 that deliver parity on quality (and, in some cases, superiority) against Champagne and the rising English sparkling category, which can be priced 2-3x higher:

• House of Arras (Tasmania): Chairman’s Trophy at the 2024 Champagne & Sparkling Wine World Championships – the first ever for Australia
• Ed Carr, House of Arras Chief Winemaker: IWC Sparkling Winemaker of the Year 2024 – only the second non-Champenois winemaker in 40 years

Domestic recognition runs deeper still, with Deviation Road (Adelaide Hills), Stefano Lubiana (Tasmania), and Chandon (Yarra Valley) all taking top domestic honours.

Quality is proven. Execution, supply reliability and brand differentiation will determine the winners.

The investment case

Sparkling wine presents a rare convergence for capital deployment:

• Category resilience: the wine style holding its ground in a contracting wine market
• Proven quality parity: awards remove the ‘but is it really as good?’ objection
• Price advantage: Australian sparkling competes on price where Champagne’s cost base makes it uneconomic to follow
• Multiple operating models: Scale (Chandon, Jansz) plays alongside boutique/allocation models (House of Arras, Deviation Road)
• Demonstrated value premium: Tasmania earns 6.5% of national wine value from 1.2% of production, a five-fold premium the market is already paying

These insights and numbers make the investment case compelling, but capital is only half the puzzle.

The three challenges

1. Production and supply chain 

Many Australian cool-climate producers already grow the grapes needed for sparkling. Here, the opportunity lies in converting production methodology and holding periods rather than replanting. But conversion is capital-hungry: traditional-method sparkling requires long ageing. Deviation Road’s Beltana is aged for seven years before release.

One route shortens the cycle: low/no alcohol sparkling is the fastest growing segment and de-alcholised wine does not carry the multi-year ageing burden, providing a faster return on the same fruit

Further, award-winning Australian sparkling wines are already supply-constrained. Scaling without destroying scarcity that justifies premium pricing is a fine balance. Patient capital solves this through investing in:

• Expanding vineyard acreage in cool regions
• Production equipment for méthode traditionnelle
• Working capital infrastructure to manage multi-year ageing cycles
• De-alcoholisation capability as a shorter-cycle revenue stream
• Allocation/club models that sustain scarcity pricing while improving accessibility

Scarcity supports premium pricing and allocation models, but capital is tied up for 3-10 years before ROI, and long ageing can squeeze margin rather than build it.

2. Market accessibility and distribution

Tasmania exports just 6% of what its crush. The region winning international sparkling trophies sells almost all of it at home.

That is the gap. Award-winning Australian sparkling wines are difficult to find outside Australia despite global accolades. English sparkling solved this through aggressive supermarket and on-trade placement.

High-growth markets with low entrenched Australian wine identity provide a blank canvas for brand-building. What is needed is a distribution infrastructure.

Investment opportunity:

• Distributor partnerships in the UK, U.S., and Asia-Pacific
• On-trade education programmes (restaurants, bars, hotels)
• Sommelier tasting tours to build trade awareness

Strategic market entry requires sustained presence and education, along with a quality product.

3. Brand recognition and credibility

Australian wine identity is still synonymous with cheap bulk red in key export markets. Awards prove quality but don’t automatically convert to market perception or premium positioning. English sparkling shifted perception with a positioning claim (‘Champagne terroir in the UK’) and the evidence to back it (Chapel Down took 60% in a blind tasting against Moët).

Australia must claim its own positioning: cool-climate Southern Hemisphere sparkling, priced accessibly with the trophy shelf to prove it.

Investment unlocks:

• Competition participation (CSWWC, IWC, Decanter) to build award credentials
• Critic and influencer engagement to amplify award wins
• Targeted storytelling positioning terroir and price advantage

English sparkling’s playbook is proven: execution matters. Australian producers need the marketing budget to tell that story.

The window is open

England proved the global market will embrace ‘Champagne alternatives’ when quality is demonstrable and price justified. Australia has the same assets and better economics: quality, climate advantage, lower price points and award credentials. What it lacks is capital, distribution, and marketing to translate regional excellence into a global position.

While the global wine industry is contracting, sparkling is the one category holding its ground, and within it, the money is moving to the ends: accessible and genuinely premium. Australia can occupy both. It is already doing so at home.

That bright spark in the global wine crisis? It is Australian.

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