The Business of Austrian Wine: Traditions Reinvented in a Post-Pandemic World

After months of closed restaurants and distancing measures, Austrian vintners are regaining their footing, adapting to modern sales tactics during the year of COVID-19.

With the majority of the Europe’s wine production based in France, Italy, and Spain, or farther afield in the U.S., Chile or Australia, one might not expect a small country like Austria to make a noteworthy contribution. But first impressions are often deceiving. And even though famed old-world wine regions like Tuscany or Bordeaux or the lavish new world wineries of the Napa Valley have certainly earned their reputation, Austrian vintners are slowly but surely entering the world stage, by combining tried and true methods of their predecessors with a willingness to adapt when faced with modern challenges. 

This mix of tradition and readiness for change was a deciding factor that helped them persevere through the Corona crisis that impaired many other industries.  

A rich history uncorked

But to put these attitudes in context, we need a little history. 

Austrian wine production is steeped in millennia-old tradition, its secrets carefully guarded by noble families, royal courts and secluded monasteries. The first archeological finds of grape seeds in Austria date back to the 10th century BC, which is one of the oldest discoveries in central Europe. 

Under the Romans, a systematic form of viticulture was introduced here in the 1st century BC, which lasted until the fall of Rome in the 5th century AD when most vineyards fell into disarray. Some 300 years later, Charlemagne’s “Capitulare de Villis” detailing the management of the royal estates includes instructions on the many facets of winemaking from that period. But Austrian viticulture had its greatest expansion in the 15th and 16th century, when it encompassed an area three times bigger than today. 

Then, after some setbacks during the religious wars of the 17th century, the Turkish sieges and the growing popularity of beer, production again picked up in the second half of the 18th century, during the reign of Maria Theresia. Her successor Joseph II further improved the conditions of wine makers by issuing a royal decree in 1784, by which he granted any citizen the privilege of serving and selling food and wine that they had grown during the year. This law, considered the predecessor of the famous “Buschenschankverordnung,” laid the groundwork for the Heurigen and Buschenschänke as we know them today. 

The so-called Buschenschank, a traditional Austrian tavern got its name from a bundle of twigs (Buschen), a welcome sign, typically hung at the entrance, signaling that the Lokal is open. In Vienna, the Buschenschank is also called a Heuriger, a German word meaning “this year’s”, referfing to the young wine customarily served in late summer or early fall. 

In the past customers would often bring their own food to enjoy with the wine. Today the food, mostly cold appetizers and traditional Austrian cuisine, is provided by the Heurigen either in the form of a buffet or à la carte. These can be found in all of Austria’s wine regions, typically not far from the owner’s vineyards where the wine originated. 

The great wine scandal 

Then came the great wine scandal of 1985. Several Austrian wineries were caught adulterating their wines using the toxic substance diethylene glycol (a minor ingredient in some brands of antifreeze) to make the wines appear sweeter and more full-bodied in the style of late harvest wines. Ironically (and sadly) one of the main culprits was not Austrian but a large German wine wholesaler who had bought a small producer in Rust (Burgenland), home to some of Austria’s finest late-harvested dessert wines, to claim the geographic origin on his cheap chemical brew. Quality controls in (then) West Germany uncovered the scandal and immediately made headlines around the world.

The short-term effect was devastating: Austrian wine exports collapsed and the industry’s reputation was destroyed, with spillover effects on the reputation of German wines as well. The longer-term effect, however, was a revitalization of the industry, now considered the making of Austrian wine. Winemakers refocused on quality dry white wines instead of the sweeter ones, reflecting shifting public tastes and increasingly reaching a higher market segment. 

Stricter regulations were laid down, largely by the industry itself, and a system of regional designations – the Districtus Austriae Controllatus (DAC) – developed, loosely modeled after the French system, with rules set by regional committees of local growers, producers, wine cooperatives, and merchants. The DAC requirements had to at least correspond to those for Austrian Qualitätswein and the underlying European Union wine regulations, but the committees were also free to set higher standards.

It took the Austrian wine industry over a decade to recover, but recover it did and with panache – crowned by the legendary London blind tastings in November 2002, when Austrian white wines (Grüne Veltliners and Chardonnays) beat out the great French white Burgundies, taking seven of the top ten places. As London’s Financial Times reported tongue in cheek: “Austria 7, Burgundy 0.” 

The scandal and dramatic recovery also one further effect: to train the industry to be nimble and creative, and to coordinate a response to crisis that has stood them in good stead since.

Austrian wine industry today

Today, Austria’s wine regions have a combined surface of around 45,400 hectares spread out across the country, far less than the four biggest wine-producing countries. And the whole country produces around 2.5 million hectoliters of wine each year, which is just a drop in the global wine barrel. There are also fewer vintners, with 20,000 active businesses, down from 32,000 in 1999, 

Austria however boasts many large independent wine regions, and 16 subregions. These are Lower Austria (the largest, including the Weinviertel, Wachau, Kamptal, Kremstal, Traisental, Wagram, Carnuntum, Thermenregion), Styria (Southeast, West and South Styria), Burgenland (Neusiedlersee, Neusiedlersee-Hügelland/Leithaberg, Mittelburgenland, Südburgenland/Eisenberg), and Vienna. And the Bergland, with vineyards in Carinthia, Upper Austria, Salzburg Tyrol and Vorarlberg. 

(c) ÖWM

Altogether, the country produces 22 white wines and 14 reds of quality as well as other local wine varieties. With the reds now a full third of the total planted wine area. 

The most important white grape variety is without question the Grüner Veltliner with 33 %, the most popular red variety, the Zweigelt with 14% of the total wine-growing area.

Lower Austria is the country biggest wine producing region with 28,000 hectares of vineyards in total, covering 60 % of the country total, which cultivate local as well as many internationally famous varieties. 

And Vienna is the smallest, but with deserved renown as the only European capital with its own wine region, with 640 wineries, producing white wine varieties like Grüner Veltliner, Riesling, Weißburgunder und Chardonnay as well as reds like St. Laurent, Cabernet Sauvignon, and Zweigelt. Finer aromatic and fruitier varieties like the Welschriesling and the Muskateller are most at home in Styria, which also has Austria’s highest altitude vineyards. And finally, Burgenland, the second-largest, spanning 11,904 hectares from the shores of Neusiedlersee to the Hungarian border in Eisenberg, with its full-bodied varieties like the Weißburgunder and Blaufränkisch, and flavorful dessert wines like the Trockenbeerenauslese. 

Surviving the pandemic

The COVID-19 crisis dealt a heavy blow to the Austrian wine industry. With people unable to go out under lockdown, sales through restaurants, bars, and taverns evaporated, as well as an endless variety of public gatherings of all kinds. 

Eager to see how they were doing, the University of Applied Sciences in Burgenland conducted a survey* in August of 2020 of 266 Austrian wineries – from Lower Austria (148), Burgenland (73), Styria (37), Vienna (5), and two from the remaining federal states – about their experience during the first six months of the pandemic. The results have shed light on the impact as well as the changes and struggles brought about by the COVID-19 pandemic. 

The biggest challenges were the radical changes in customer behavior and the pressures to lower prices. Around 84% of the businesses sell their wines to restaurants and bars, a distribution channel second only to the direct sales, the so-called “Ab-Hof-Verkauf” (97%). 

“This dependence on restaurants and bars proved to be one the biggest obstacles for Winemakers during the pandemic,” says Prof. Marcus Wieschhoff, course director of international wine marketing at the University of Applied Sciences in Burgenland. During the past year, customers turned to purchase their wine online or in supermarkets, both outlets that aren’t fully exploited by the local vintners. Around 45% of the respondents hadn’t used online marketplaces at all in the first half of 2020 and sold only 5% of their products through grocery stores. Since then, many started to adapt by opening Webshops or offering promotional discounts for their products – which has also added to the already significant financial strain caused by the pandemic.

After reporting a loss of 25% in March 2021 over the previous year, Viennese vintners had to tackle the corona crisis in their own way. The trade association WienWein see this loss as manageable compared to other industries. 

The group credits it’s success to their willingness to adapt and to launch a coordinated rush response. Their main strategy was to relocate the bulk of their sales by creating and modernizing their online platforms, opening Web shops and improving their social media presence. 

“Before 2020 online sales hadn’t played a significant role in any of our businesses,” said Rainer Christ, chairman of the association, in an interview for gast.at. But wine sales wern’t the only aspect that has been quicky decanted to the internet. Winetasting can now also be enjoyed trough our screens. 

“Before Corona no one could have imagined that something like awinetasting could be done virtually,” adds vintner Fritz Weininger. 

Thomas Perger a vintner and the owner of the Perger winery and Heurigen in Bad Deutsch-Altenburg has experienced all the difficulties firsthand, with the pandemic affecting all facets of wine production from harvesting to sale. 

“We couldn’t get enough workers because of the closing of the borders and the sales have gone down by 40 % in the last year all of which we had to store in our cellars,” Perger explained. In addition, their Heuriger had to be closed for 7 months, contributing to overall lower sales as well as significant loss of revenue for the company. 

“But since everything reopened, things have begun to go back to normal and the harvesting season is right around the corner” Perger concludes. 

Unique Conditions

Today, most agree that the deciding characteristics of Austrian wine varieties come from the unique conditions like the moderate climate, combined with the steep slopes and terraces on which they are often grown. Most vines in Austria thrive on stone surfaces that not only give the wines their distinctive mineral taste but also absorb the heat and keep the plant warm hours after the sun sets, which are the ideal conditions for wine cultivation. 

But perhaps equally important for the future of the industry is the attitude of the winemakers, whose long history combines with a readiness to adapt to changing circumstances, climate and markets.

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Bogdan Brkić
Originally from southern Serbia, he moved to Vienna in 2013 to study German Philology. He is an aspiring journalist whose passions include history, music and French pastries.

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