The Future of Victorian Wine Won’t Be Built on Wine Alone
The announcement that the federal government will phase out the Wine Tourism and Cellar Door Grant Program has understandably caused a lot of concern across the wine industry.
And I get it.
For many regional wineries, that funding wasn’t just helping support cellar door operations. It was helping support tourism experiences, staffing, hospitality and the broader visitor economy at a time when the industry is already under enormous pressure.
But I also think the conversation around the grant is revealing something much bigger that has been happening within Victorian wine for a long time now...
Wineries are no longer JUST wine businesses
Increasingly, wineries are no longer just wine businesses.
They are tourism businesses.
They are hospitality businesses.
They are events businesses.
They are accommodation businesses.
And in many cases, they are trying to become ALL of those things at once while still remaining financially sustainable wine producers.
That is a huge shift.
And I think a lot of businesses are currently sitting in a really awkward transition phase where they know the old model isn’t working as effectively anymore, but they’re still trying to work out what the next version of their business actually looks like.
Because the reality is... wholesale is hard right now.
Restaurant groups are managing costs carefully. Distributors are carrying huge portfolios. Margins are tight. Consumers are more selective with spending.
And for many smaller wineries, particularly those without scale, it’s becoming increasingly difficult to rely on wholesale channels alone to drive growth.
Demand for wine tourism hasn’t disappeared... expectations have changed
At the same time, I don’t actually think demand for regional wine tourism has disappeared.
If anything, I think consumers are still deeply interested in regional experiences. They still want weekends away. They still want connection, good food, beautiful destinations and social experiences.
Through my recent work on Grampians Grape Escape, we actually saw growth in multi-day visitation, with more people than ever purchasing three-day tickets.
That says something important.
People ARE still willing to spend money when the experience feels compelling enough.
But expectations have changed...
Wine now sits within a much broader lifestyle experience. Food, music, accommodation, design, wellness, family experiences, live events and social connection all shape how people engage with wine regions.
And I think this is where some parts of the industry are still struggling.
There are still a lot of cellar door experiences built around the assumption that consumers want to stand at a counter and work through a structured tasting flight while listening to detailed technical information about wine.
For the media, trade and highly engaged wine enthusiasts, that absolutely still has a place.
But for the broader lifestyle market, which is realistically where much of the future growth opportunity sits, that alone often isn’t enough anymore.
People want:
atmosphere
discovery
a sense of occasion
to FEEL something
Experiences are becoming commercially critical
That’s why I think we’re going to continue seeing stronger emphasis placed on experiences across Victorian wine tourism.
Not just tastings...
But:
long lunches
live-fire dining
accommodation
festivals
collaborations
more immersive hospitality concepts
It’s also why regional wine events are becoming so commercially important.
When people are immersed in a beautiful destination, surrounded by food, music and social energy, their willingness to spend changes dramatically. You can physically observe it.
Wine stops feeling like a product and starts feeling like part of an experience and memory they want to take home with them.
The next evolution of direct-to-consumer
From a strategic perspective, I suspect the removal of the cellar door grant will probably accelerate trends that were already happening anyway...
The stronger premium tourism operators will likely continue to grow.
We’ll probably see weaker or less differentiated cellar door models struggle further.
There will likely be more diversification into accommodation, food and events.
And I think direct-to-consumer capability, databases, memberships and digital engagement will become even more important over the next decade.
But I also think wineries will need to rethink what direct-to-consumer actually means.
Traditionally, a lot of the industry has focussed heavily on wine clubs built around quarterly shipments and ongoing annual commitments.
And while those models absolutely still work for some highly engaged wine consumers, I think younger audiences are behaving very differently online.
Most younger consumers are now used to flexible, personalised e-commerce experiences. They want convenience. They want choice. They want to buy when it suits them financially and emotionally.
And realistically, many younger consumers, particularly millennials with mortgages or young families, are not making casual $1,200 annual subscription decisions after a cellar door visit.
That doesn’t mean direct customer relationships are becoming less important. I actually think the opposite is true.
But I do think wineries will increasingly need to think more like modern e-commerce and lifestyle businesses when it comes to:
customer retention
digital experience
flexibility
online purchasing behaviour
Not because wine itself has become less important...
But because consumer behaviour has changed.
So where does Victorian wine go from here?
Increasingly, the wineries that thrive will probably be the ones that understand not just how to make wine, but how to create experiences people genuinely want to travel for, talk about and return to.
My work sits at the intersection of wine, tourism, hospitality and direct-to-consumer strategy, so these are conversations I spend a lot of time having with operators across the sector.
And if this article has your brain ticking over about your own business, feel free to reach out. I offer complimentary 30-minute growth chats for businesses wanting to unpack challenges, opportunities and where things might be heading next.
Until then...
Cheers to your growth!
Holly