Subscriber login Close [x]
remember me
You are not logged in.

Demand for NZ wine continues to grow as supply is squeezed

Published:  10 November, 2021

International demand for New Zealand wine continues to grow as export value reached $599M in the first quarter of the new export year, up 9% on the previous year.

New Zealand Winegrowers (NZW) said that demand for New Zealand wine is also reflected in an increase in price per litre, with 2021 September quarter average value up 4% from September 2020.

The quality of the 2021 vintage was described as "exceptional" throughout New Zealand’s wine regions, although the harvest was smaller than hoped for, with 370,000 tonnes of grapes harvested during the 2021 vintage - down 19% on last year’s crop.

It said this reduced supply is reflected in the decrease in volume of exports, with YTD September 2021 exports down 3% on the previous year.

“The ongoing demand for New Zealand wine has proven that the distinctive flavours, quality and sustainability of our wines increasingly resonate with consumers around the world. It is encouraging to see that during these uncertain times, consumers continue to choose a premium product they know that they can trust,” said Philip Gregan, CEO of NZW.

“Successfully managing the market impacts of the resulting supply constraints is a key focus for many in the New Zealand wine industry. Wineries are having to make tough decisions over who they can supply in their key markets.”

In addition, the group said that increasing production costs, the on-going effects of Covid-19 on the border and markets, and strained supply chains, have continued to impact growers and wineries.

The projected labour shortage and unavailability of skilled workers due to the ongoing closure of New Zealand’s borders remains a “key concern”, as these workers play a vital role in enabling the industry to meet the critical seasonal work peaks.

“With ongoing uncertainty at New Zealand’s borders, our industry is working hard to attract new people to our sector, to ensure we have the personnel in place to bring in the 2022 crop, to make our premium wine, and complete winter pruning,” Gregan said.

Wine businesses that sell predominantly through the on-premise and tourism sector continue to experience significant challenges.

“Domestically, restrictions on operations of hospitality businesses are a major stress point for wineries dependent on that sector. Cellar doors have been hit hard by the collapse in international tourist numbers, as well as the impact of current restrictions on regional travel. Positively, we have seen more New Zealanders visiting cellar doors, but there are long, lean periods outside of the traditional Kiwi holiday period.”