The New Zealand wine industry has consolidated with statistics released from New Zealand Winegrowers confirming a levelling off of recent growth trends. The following table provides evidence of the growth of the wine industry over the past 10 years:
|Development of New Zealand Grape & Wine Industry 2000-2010 (year ended 30 June)|
|Number of Wineries||358||382||398||421||463||516||530||543||585||643||672|
|Producing Vine Area||10,197||11,648||13,787||15,800||18,112||21,002||22,616||22,616||29,310||31,964||33,400|
|Average Yield (tonnes per Ha)||7.8||6.1||8.6||4.8||9.1||6.8||8.2||8.1||9.7||8.9||8.0|
|Average Grape Price ($ per tonne)||1,195||1,396||1,634||1,929||1,876||1,792||2,022||1,981||2,161||1,629||1,293|
|Grapes Crushed (thousands of tonnes)||80.1||71||118.7||76.4||165.5||142||185||205||285||285||266|
|Total Production (millions of litres)||60.2||53.0||89.0||55.0||119.2||102.0||113.2||147.6||205.2||205.0||190.0|
|Domestic Sales of NZ Wine (millions of litres)||39.4||40.4||41.4||42.4||43.4||44.4||45.5||46.4||47.4||59.7||56.7|
|Consumption per Capita (litres NZ wine)||10.6||9.6||8.2||8.6||8.8||11.2||12.1||12.2||11.1||13.9||13.0|
|Export Volume (millions of litres)||19.2||19.2||23.0||27.1||31.1||51.4||57.8||76.0||88.6||112.6||142.0|
|Export Value (millions of NZ$FOB)||168.6||198.1||246.4||281.9||302.6||434.9||512.4||698.3||797.8||991.7||1041.0|
In data provided by New Zealand Winegrowers for 2010, the Marlborough region accounted for some 69.3% of the total production for New Zealand with some 154,671 tonne of Sauvignon Blanc, 11,265 tonne of Pinot Noir, 7,545 tonne of Chardonnay, 4,809 tonne of Pinot Gris and 2,590 tonne of Riesling.
It was thought lower production for the 2010 vintage might help stabilise bulk wine prices however, recent excellent flowering and grape growing conditions through the summer of 2010/2011 indicates a potentially higher than ideal 2011 grape crop. This combined with reportedly lower contract grape supply prices by some wineries for the 2011 vintage is adding to continued viticulture uncertainty in the short to medium term, which will have a negative flow-on effect to grower returns for the coming season.
Adding to the uncertainty and lack of investor confidence in the industry is the recent placing of six Marlborough winery/vineyards into receivership. A number of these are large land holdings developed to viticulture on contoured or unproven viticulture land, making these blocks harder to sell in a climate of limited profitability. Improved profitability for growers in the viticulture industry would help underpin and stabilise the Marlborough viticulture property market.
Properties which have a unique factor about them should continue to hold underlying value better than properties which have limited scope, are poorly presented or are located in unproven viticulture areas.
There have been about six genuine market sales of vineyards since the beginning of 2009 all with grape supply contracts in place, but there are an increasing number of “pressured” sales predominately without grape supply contracts that have been heavily discounted as a result.
The Marlborough Sauvignon Blanc remains a strong brand with a positive reputation in the global market. Sales continue to build, however with the global economy still some way off a full recovery, marketing and selling of our product will be more critical than ever in the next two years.