New Zealand joy
The New Zealand Winegrowers (NZW) annual report is out, and if you’re a New Zealand wine producer it’s joyful reading.
It starts not by telling how well NZ wine has done, but how much better it’s going to perform:
“New Zealand wine is well on track to reach exports of NZ$2 billion ($1.9 billion) by 2020.”
Full marks for optimism, which looks well founded unless the world turns its back on NZ sauvignon blanc.
In the year to the end of June 2016 the value of NZ wine exports rose 10 per cent to NZ$1.57 billion. The report proudly states, and rightly so, that this was the 21st consecutive year that export value had grown. The FOB average price per litre also rose, by 7 per cent for bottled wine to NZ$8.81 a litre, and bulk by a remarkable 14 per cent to NZ$4.30 a litre.
NZ’s marketing program is similar to Australia’s: consumer events in various countries along with trade and media gatherings bringing media, buyers and sommeliers to New Zealand for that Kiwi experience. Some basic facts:
- Total producing area: 36,192ha (white 28,231ha, red 7960ha)
- Variety percentage:
|White:||2016 production||Red:||2016 production|
|Sauvignon blanc: 74 per cent||303,711 tonnes||Pinot noir: 70 per cent||35,661 tonnes|
|Chardonnay: 11 per cent||29,162 tonnes||Merlot: 16 per cent||9321 tonnes|
|Pinot gris 9 per cent||24,892 tonnes||Syrah: 6 per cent||2221 tonnes|
|Riesling: 3 per cent||5937 tonnes||Cabernet sav 4 per cent||1,537 tonnes|
|Gewurztraminer: 1 per cent||2221 tonnes||Malbec: 2 per cent||483 tonnes|
|Other: 2 per cent||726 tonnes||Cabernet franc: 1 per||616 tonnes|
|Others: 1 per cent||677 tonnes|
It’s interesting the report doesn’t list viognier as a leading grape. One assumes it is included in “other”, but the breakdown says 771 tonnes were produced in 2016. Other anomalies include semillon at 466 tonnes and pinotage at 374 tonnes. TKR hasn’t tasted any, but suspects grüner veltliner should, if planted in the right place, do well in NZ. The 2016 crop was 276 tonnes.
- Vineyards: 2040
- Average size: 17.4ha
- Growers: 747
- Regions: 11
- Wineries: 675
The average yield per hectare is 12 tonnes, with the average price in 2015 being NZ$1732 ($1648) a tonne. The average Australian price in 2015 was $463 a tonne.
Sauvignon blanc accounted for 85.6 per cent of exports (181,944 tonnes). TKR has been expecting it to fall on its arse for years. It hasn’t, nor has it dropped dramatically in price, as Australian chardonnay did. To TKR it remains one of the mysteries of the universe. To the consumer it’s the wine of choice and has a strong female following. One also has to admire how well the New Zealanders have managed their monocultivar.
The US has become the largest market, overhauling the UK, Australia and the domestic market. The UK was down a small amount in volume but increased in value. Australia was down in both volume and value. The reason given for the downturn in the domestic market is a smaller 2015 vintage and not enough wine. Canada, the Netherlands, China, Singapore and Hong Kong were all up. Ireland is also doing well. The top five export markets for 2016:
|Country||2015 vol||2015 val||2016 vol||2016 val|
|US||53.850 ml||NZ$372.241m||61.636 ml||NZ$460.600m|
|UK||59.745 ml||NZ$353.931m||58.936 ml||NZ$381.809m|
|Australia||57.528 ml||NZ$362.188m||52.960 ml||NZ$361.677m|
|Canada||9.583 ml||NZ$94.906m||10.612 ml||NZ$107.372m|
|Netherlands||6.744 ml||NZ$41.479m||6.801 ml||NZ$44.480m|
The most notable aspect of NZ wine exports is the price per litre. The NZ price has been transferred into Australian dollars below. It’s an average price, including white, red, bottled and bulk.
|Country||New Zealand per litre||Australia per litre|
|Australia||$6.50||N/A (Aus to NZ $4.83)|
Australia boasts of its volume and value wine exports to China. In comparasion, New Zealand is way behind, but the Australian average price is $6.41 a litre while NZ’s is $12.95.
The prediction for the year to the end of June 2017 is export volumes increasing 10 per cent.
The NZ industry declares: “We strongly support the Trans Pacific Partnership (TPP). With wine exports to TPP countries valued at close to $1 billion we see TPP as a ‘must have’ for our sector as it will improve access into some of the wealthiest and fastest growing economies in the world.”
Like Australia, the Kiwis are looking forward to an FTA with Europe, and understand a separate one will have to be sorted with the UK, as its exiting the EU.