“While the world has changed in 2020, what has not changed is people’s love for New Zealand wine,” says New Zealand Winegrowers, noting the industry had to deal with a Level 4 lockdown during harvest and was planning for a ‘worst case scenario’ for the industry with ongoing COVID-19 disruption.
New Zealand’s largest export markets for wine are the US, UK and Australia: exporting to more than 100 countries in total. It represents New Zealand’s sixth largest export good.
Export driven industry
The milestone comes in the year that New Zealand celebrated its 200th anniversary – making it a relatively young wine producer when compared to European wine giants which have been producing wine for millennia.
Until the 1980s, New Zealand’s wineries primarily served the domestic market. Today, it is powered by exports. In 1990, exports were worth $18m NZD ($12.61m USD), in 2010 they were at $1.04bn ($0.73bn USD, and have now reached $2bn ($1.4bn USD) in 2020.
In 2020, strong export performance saw an increase of 19% for the first four months of the new export year (July to October), on the same time in 2019.
And New Zealand Winegrowers says the premium reputation of New Zealand wine has translated to real value in its major markets: with wines from the country either the highest or second highest priced wine category in the US, UK, Canada, and China.
“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,” said Clive Jones, chair of New Zealand Winegrowers.
“While Sauvignon Blanc remains our flagship export, consumers are continuing to explore the diverse range of wine varieties we produce, with Pinot Noir remaining our second most exported variety, and Rosé and Pinot Gris becoming increasingly popular.”
The impact of Covid-19 on the industry has been mixed, as different parts of the industry face a range of opportunities and challenges. The increasing costs of production and a potential labour shortage have also added pressure.
“Exports to our key international markets have increased beyond expectations this year, but on the other hand, wine businesses that sell predominantly through on-premise and wine tourism have experienced significant challenges," notes the organisation. "Encouragingly in the domestic market, we are seeing people continue to buy and support local.”
New Zealand Winegrowers has already noted that the outlook for the industry is challenging, with ongoing unknowns from the pandemic, but remains confident it will be able to rise to the challenge. This may include re-thinking certain dimensions of the industry - such as re-thinking its workforce (many workers normally come in from overseas) and re-imagining wine tourism. As with other industries, digital is becoming increasingly important for telling the story behind New Zealand wine to potential export destinations.
“Ultimately, how New Zealand wine is perceived by the consumer in a post-COVID world will depend on the core fundamentals that research tells us have underpinned our success to date: our reputation, our commitments to sustainability, and the diversity of our offering,” notes New Zealand Wine Growers.