Exports surged to NZ$2.4bn (£1.14bn) in the 12 months to 30 June 2023, which represents the largest one-year growth in the industry’s history.
Clive Jones, chairman of New Zealand Winegrowers, said, ‘The New Zealand wine industry is now the most export-focused of all the world’s wine industries, with close to 90% of sales occurring outside our home market. The $450 million growth in export value in the past year testifies to the strong consumer demand for New Zealand wine in key markets, particularly Sauvignon Blanc.
‘Performance of other styles struggle to match this pace, but in export markets and at home, our range of highly distinctive wine styles is a critical contributor to our reputation as a producer of the first rank.’
Exports were up 19% in terms of volume and 23% by value, which suggests that wine lovers are prepared to pay a premium for quality New Zealand wines. The United States remained the country’s largest export market, as sales increased by 25% to NZ$870m in the past year. Further growth is expected over the next 12 months, and forecasts suggest that it could soon become a billion-dollar market.
Winemakers also welcomed a new free trade agreement between the UK and New Zealand, which removes several technical trade barriers on wine shipments. They hope that a similar agreement with the EU will come into force in early 2024.
However, it will be difficult for Kiwi producers to maintain current levels of growth over the coming year. The country’s overall harvest was down 6% in 2023 compared to the previous year, largely due to the impact of Cyclone Gabrielle. Production in Gisborne was down 43% year-on-year due to the cyclone, while Hawke’s Bay was also impacted, albeit to a lesser degree.
‘Climate change is clearly one of the key major challenges facing our sector,’ warned Jones, who added that budbreak and harvests are now occurring earlier each year. It threatens to impact the distinctive characteristics and flavours of New Zealand’s wines, which have underpinned its success in export markets.
To address the challenge, winemakers are researching new planting material and vineyard growing systems to increase productivity and to meet the challenges of a climate-altered world.
The return of inflation has been another headwind, as well as rising excise duties and increasing water costs, so there are plenty of challenges facing the industry.
On a brighter note, tourism numbers have rebounded, providing a significant boost to many small wineries, which heavily depend on visitors. Open borders have also eased the labour shortages which plagued the industry during the Covid-19 pandemic. New Zealand Winegrowers remains confident that sales will continue to grow over the next decade, supporting more jobs and ultimately creating a more sustainable industry.