Weekend Herald

She’ll be white: NZ sauvignon blanc on a high

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The outlook for New Zealand’s wine industry is bright, following a momentous 12 months that started with the Level 4 lockdown during the

2020 harvest, followed by surprising­ly resilient sales and export results.

The 2020 harvest completed in the lockdown sent our wine market into disarray, according to Mike Laven, Colliers Marlboroug­h director and viticultur­e specialist.

“The industry was expecting a worst-case scenario as the local and key overseas markets descended into lockdown, essentiall­y removing all on-premise sales.

“The reality of the situation proved to be very different. Consumer drinking and shopping habits changed, resulting in increased purchases from supermarke­ts, online, and direct from suppliers for home consumptio­n.

“Sales of New Zealand sauvignon blanc were particular­ly strong as customers found both the taste and retail price point irresistib­le.”

New Zealand Winegrower­s reported that total wine exports surpassed $2 billion in 2020, an increase of 8 per cent from 2019.

Growth was particular­ly solid in the three largest offshore markets, the US, UK and Australia, which collective­ly account for over 75 per cent of New Zealand wine exports.

By the end of 2020, sales in the UK had increased by 14 per cent, Australia was up by 12 per cent and our largest market, the US, was up by

6 per cent.

Andy Poswillo, Colliers Marlboroug­h director and viticultur­e specialist, says strong retail sales are fantastic for the industry, but the year ahead will be challengin­g as producers try to meet increased demand in a low yielding season.

“With global demand for New Zealand wine, especially sauvignon blanc, at an all-time high, wine companies were hoping for a large

2021 harvest to meet the growing supply demands of their hard-won customers around the world.

“Unfortunat­ely, the Marlboroug­h 2021 vintage was significan­tly impacted by early season frosts and inclement weather during flowering, resulting in a lower production year,” Poswillo notes.

“While the conditions ensued exceptiona­l wine quality, production is estimated to be down by 30 per cent from the 2020 harvest.”

“Pruning has now begun on the Marlboroug­h region’s 28,000 hectares of vines, enabled by an influx of some 2500 seasonal workers arriving through the Recognised Seasonal Employer (RSE) scheme.

“At the same time companies are working to manage expectatio­ns as stocks run low of 2020 wine and buyers lobby strongly for their allocation of the limited 2021 supply.

“To keep up with product demand, many producers are looking to secure additional longterm supply through new grape supply contracts, leases or property purchases.”

Laven agrees, noting that robust wine sales have culminated in demand for vineyards, which is outstrippi­ng supply and driving up property values.

“After a slow period during 2018 and 2019, a flourishin­g sales market has flowed into the property sector with vineyard sales bursting into life. Recent property sales have ranged from $150,000 to $320,000 per canopy hectare depending on the location, variety and yield history.

“One example is the sale of Maven Vineyard in Rapaura,” Laven says. “This high-quality property was sold by Colliers in August for $25 million after a competitiv­e process resulted in multiple offers.

“With low deposit rates, recordlow interest rates and what is looking like another stellar run for New Zealand wine, investment in viticultur­e property is shaping up to be an attractive option.”

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