new zealand wine

New Zealand wine: Covid's highs and lows

29 March, 2021

“Exports have been going OK. However, New Zealand has struggled with getting enough containers into the country. Long story short, we still haven’t enough and trying to source empty containers and vessels to get the wines on has been very challenging, sometimes delaying shipments up to a month. As this is seen around the world, vessels are also getting behind schedule and, in turn, they are omitting ports, this too leads to orders being rolled and taking longer to sail.”

More than 85% of the wine produced in New Zealand is exported, according to trade body New Zealand Winegrowers. Despite the logistical challenges, exports have remained strong during the pandemic. NZW figures show exports increased 5.6% year on year to 286.5 million litres in the 12 months to June 2020, marking the 25th consecutive year of export growth. Exports then shot up by 19% year on year in the next four months – July to October 2020 – meaning that annual export values have now smashed through the NZ$2 billion (US$1.44 billion) barrier for the first time.

“This milestone reflects the appreciation that the world has for New Zealand wine, and reinforces our international reputation for distinct, premium and sustainable wines,” says Clive Jones, chair of New Zealand Winegrowers.

New Zealand generally commands a premium compared to most other countries in export markets. For example, it is either the highest or second highest priced wine category in the US, UK, Canada, and China – o en vying with France for top spot. “We are optimistic that demand for New Zealand wine will continue to grow in the year ahead, and then it will become a question of whether our supply can meet that demand,” says Jones.

Kelly at Yealands reports that exports have been “really strong in all key markets” over the past year. “The UK in particular has seen our forecasts exceeded since the middle of last year, with Yealands Sauvignon Blanc in the UK and US growing significantly ahead of the New Zealand Sauvignon Blanc category,” he says. “We’re seeing continued export growth in 2021 and look set for another record month at the end of March. We did have to navigate the channel switch of sales to retail and online as a result of consumers’ increased at-home consumption, with the closure of on-premise business globally due to Covid-19 lockdowns, but overall we’re seeing the NZ wine category outperform the total wine category in almost all markets.

“The UK continues to look promising and exceed our initial forecasts, and we anticipate that on-premise channels in the UK, US, Canada and across Europe will begin to recover across the course of this year as the Covid-19 vaccines are rolled out in these markets and businesses can begin to reopen.”

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He hopes the rm’s new State of Flux range, featuring a Sauvignon Blanc produced using concrete egg fermentation and an unoaked Chardonnay, can continue to generate momentum in key markets, while Yealands is also starting to experiment with alternative varieties such as Grüner Veltliner.

Craggy Range has not fared quite so well due to its reliance on the on-trade. Around 70% of its export business goes through the on-trade, “so obviously we had a challenging time initially when major markets locked down, especially the UK and US”, says Drummond.





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