Marlborough plans new wave of planting

New Zealand wine growers are starting to plant vines again, following a freeze on vineyard expansion since 2008’s surge in supply.

Currently, around 23,000 hectares of Marlborough’s total 33,000ha are planted with vines

According to Jeff Clarke, chief winemaker at Marlborough’s Winegrowers of Ara, vine nurseries are seeing demand for new material for plantings in the South Island, following a virtual halt on vineyard expansion for the past 4-5 years.

This year’s resurgence marks the first serious growth in vineyard area since 2008, when the country entered an oversupply situation due to a 40% increase in grape supply coupled with a slowdown in demand due to the global financial crisis.

Clarke told db that vines are currently being planted in Marlborough and Central Otago, although he added that it was unlikely there would be extensive planting in the North Island.

“The planting now is only in the South Island as the demand is for Sauvignon Blanc, Pinot Gris and Pinot Noir, rather than Chardonnay and Bordeaux varieties [which are primarily grown in the North Island],” he said.

He also noted that the Gimblett Gravels in Hawke’s Bay was, in any case, already “fully planted”.

The 2013 vintage is New Zealand’s largest harvest on record, yielding around 345,000 tonnes of grapes, which was up 28% on the previous year, although 2012’s harvest had left producers with a slight shortage as it was down 18% on 2011.

While this year’s harvest sets a new record, it was only 5% up on 2011.

“2013 was our largest harvest but it was only up a small amount on 2011,” stressed Clarke.

Jeff Clarke from Winegrowers of Ara

Continuing he explained, “Post 2008 there has been negligible planting, so 2013 is the top before the next wave of planting goes in.”

Speaking of Marlborough specifically, he noted that there wasn’t much space left for new vineyards, and forecast that within 3-5 years the region would be fully planted.

Currently, around 23,000 hectares of Marlborough’s total 33,000ha are planted with vines, and while that leaves 10,000ha potentially available for extra vineyards, Clarke said that he believed the full 10,000ha wouldn’t be added. Instead, he expects to see at least 5,000 hectares go into the ground in the near future.

“Some property owners got burnt in the flush of enthusiasm 3-4 years ago and won’t plant again,” he said, adding, “Also, water availability and the climatic conditions will limit the expansion.”

Clarke noted that the flat land of Marlborough is now almost entirely covered with vineyards and that most of the river aquifers used to irrigate plantings are already allocated to existing growers and producers.

As a consequence, any new plantings will be limited to the hillsides of the region and will need dams to capture water. Furthermore, these vineyards will need overhead frost protection due to the cooler nature of these more exposed higher altitude sites.

Such viticulture will require significant investment which only the biggest producers would be able to afford, explained Clarke.

“It is in the realms of some of the larger companies to fund this infrastructure, so while the previous wave of plantings was mostly existing farmers converting from sheep to viticulture, this latest wave of planting will be the wineries themselves,” he surmised.

As for Clarke’s own company, he described the Winegrowers of Ara as a “land bank” and noted that the producer has 425ha planted to vines but owns another 1,000ha of Marlborough which could be converted to vineyards.

“We are fortuitous in having some of the more extensive areas of Marlborough that are still unplanted, but we are putting in around 70ha of vines this year, and then probably around 100ha in 2014.

Continuing he commented, “And if demand is still running high, then we will continue to plant up.”

In terms of demand, Clarke said that following a slight shortage of supply after the smaller 2012 vintage, Winegrowers of Ara were focusing on the most profitable sales channels and countries.

“We are now trying to find those markets that offer us the best returns… the UK is challenged with exchange rates and taxation, although we don’t want to turn our back on it.”

Speaking more generally about New Zealand wine sales in the UK he noted that producers were too focused on the retailers.

“Most New Zealand wine is distributed in the off-trade and we are pretty light in the on-trade, so, if we are looking for extra value, then perhaps we have to rebalance that situation.”

He also noted a shift from New Zealand bulk Sauvignon exports for own-label wines in the UK towards more branded wine sales.

Meanwhile, he described Marlborough Sauvignon Blanc as “a wine of choice in the USA,” and told db that he hopes to “ride on the back of the success of Kim Crawford and Oyster Bay” in North America.

Finally, he admitted that China “could be a big disappointment”.

Although he recorded that figures show a lot of New Zealand wine going into the Asian country, he commented “it is hard to actually find it”.