New Zealand – Little wonder

Last year was a milestone year for New Zealand for many reasons. Global sales of its wines exceeded 100m litres for the first time, while the 500th winery joined the New Zealand wine community. And this year the 2006 grape harvest soared to a new record of 185,000 tonnes. But while all this growth has been taking place the world has become tougher for wine producers, particularly small ones. Has New Zealand come too far, too fast?

Philip Gregan, CEO, New Zealand Winegrowers, has been with the generic organisation since 1983. Back then there were just 90 wineries in New Zealand and 90% of their production was consumed domestically. “When I joined the industry was practically bankrupt, it just wasn’t internationally competitive at all. But now we’re continually surprised by the demand for our product and we’ve never, ever caught up. The market is really incredibly strong.”

To cater for these rising export figures New Zealand’s vineyard expansion continues apace. With well-publicised wine surpluses in both Australia and Europe, should producers perhaps be treading carefully when it comes to increasing planted area? “There are 22,000 hectares in production this year and that’s rising by 1,500 to 2,000ha a year, and I think that will continue,” comments Gregan. “Every indication I’ve had is that growers are comfortable with the level of production this year.”

Louise Hill, marketing manager at Stratford’s Wine Agencies, who looks after Cable Bay and Lincoln Vineyards in the UK, sees no dangers ahead for the increased volumes the country is producing. “It’s a big world and New Zealand will only ever carve out a tiny niche in any market. Talk of an over-supply of New Zealand wine is completely out of context. New Zealand wine can, must and will remain a premium niche category,” she says.

Niche marketing
And the niche market is exactly where New Zealand Winegrowers has been focusing its efforts in the UK, by targeting the independent retail sector with a competition to win a trip to New Zealand. “We have 61 independents taking part in the promotion and it is something that we wish to grow for the coming years. We are looking at extending the programme to other countries since it has been so successful,” says Warren Adamson, UK marketing manager, New Zealand Winegrowers. This sector is indeed the most sensible target for many New Zealand wineries who are producing in volumes that would be too small, and at prices that would be too high, for larger chains. The on-trade is also a suitable target

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