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Thursday 23 October 2014

NZ toasts wine export boom

21st August, 2014 by Gabriel Stone

New Zealand Winegrowers has hailed a record NZ$1.33 billion (£672m) export performance last year as it predicted a rise to $2bn by the end of this decade.

Photo credit: Peter Burge

Photo credit: Peter Burge

As outlined in the NZW Annual Report 2014, published this week, a bumper 2013 vintage helped to boost the country’s volume and value exports by 10% to almost 190m litres during the last 12 months, as it maintained a steady average price per litre of $7.11.

While Australia remains the largest foreign market for New Zealand, accounting for 28% of total export volumes, the fastest growth last year came from North America and Europe. Value exports to the US have risen by 16% in the last 12 months, while the Netherlands rose by 33% and Germany by 52%.

In the UK, where export volumes have risen by 9% in the last year, New Zealand reported an 11% increase in its already high average price per bottle to reach £7.27.

By contrast, NZW reported that both China and Hong Kong had “slowed considerably”, falling 8% and 18% respectively by value, although it insisted that “the potential in these markets is undiminished.”

Such has been the export drive from many producers – volumes have more than doubled since 2008 – that New Zealand’s domestic sales fell by around 6%.

Source: New Zealand Winegrowers

Source: New Zealand Winegrowers

Looking ahead, NZW hailed a record harvest in 2014 to help it fulfill “the even greater demand forecast” for its wines, with a prediction that exports will hit “around $1.5bn” over the next year and $2bn by the end of the decade.

Much of this demand continues to centre on the country’s Sauvignon Blanc, which accounted for 72% of the total 2014 harvest and 85.5% of last year’s exports. However, there was a significant rise in Pinot Noir output with production increasing by 15% to 36,500 tonnes.

Nevertheless, no doubt mindful of the glut that undermined the country’s reputation in 2008, the report cautioned: “increases in productive capacity should be based on a clear-eyed assessment of market demand.”

Although planting continues across the country, NZW acknowledged: “We will never be one of the giants”. It noted that, in addition to the natural yield restrictions imposed on cooler climate regions, the main production hub of Marlborough “will reach the limit of viable vineyard land at some point.”

Despite this inability to compete on the same platform as larger scale producers such as Australia or the US, the report concluded, “We can, however, be among the most sought after and highly valued.”

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