The Gross Margin Ready Reckoner is a free and confidential business planning tool that allows wineries to run different production and market scenario simulations to determine the most relevant price point for their wine in a specific export market.
Wineries can model the impact of changes in product mix, pricing, markets and distribution strategies on their profit margins.
Wine Australia Chief Executive Officer Andreas Clark said the Gross Margin Ready Reckoner will help to improve the competitiveness of Australian wine internationally and support the success of Australian wine businesses.
“Exports have always been critical to the success of the Australian wine sector. Currently, 60 per cent of wine produced in Australia is destined for export and in the last financial year, the value of our exports reached $2.11 billion,” he said.
‘The Gross Margin Ready Reckoner will help our sector to get the most from export opportunities as it provides a benchmark with the most suitable price point in a specific market, based on the individual business needs of a winery.
“The tool calculates profitability under different business scenarios across production and the supply chain, using information from the individual winery, as well as benchmark and tax data generated from a number of sources.”
The Gross Margin Ready Reckoner was first developed in 2007 by the Winemakers’ Federation of Australia and Wine Australia.
Working with Deloitte, Wine Australia has completely updated the Gross Margin Ready Reckoner to include the latest grape pricing, tax regimes, general cost updates and changes to tariff rates arising from Australia’s free trade agreements.
The tool bases its calculations on pre-populated averages and estimates across the supply chain in order to create a basic benchmark.
To create an individual benchmark report, the Gross Margin Ready Reckoner poses specific questions over three steps:
- winegrape origin and variety
- destination market, and
- wine production and storage costs.
Wineries can adjust the inputs on the comparison screens to examine the impacts of changes to input costs such as exchange rates, shipping and route to market.