Tighter market conditions provide new opportunities for New Zealand wines according to the June year end 2012 Annual Report of New Zealand Winegrowers.
‘The vibrant and distinctive qualities of New Zealand wines continue to resonate with consumers in our key markets. In the past year exports value grew 8% to $1.18 billion and international sales volumes have now lifted 79% since 2008. This strong sales performance combined with a smaller 2012 vintage means a changed supply/demand dynamic for the sector in the year ahead’ said Stuart Smith, Chair of New Zealand Winegrowers.
Smith said that total New Zealand wine sales (export and domestic) rose 10% to a record 242 million litres for the June year end 2012, but production from the 2012 vintage was less than 200 million litres.
‘Supply conditions are definitely tighter than at any time since 2007 which is a major turnaround for the sector. This provides the opportunity for the industry to focus on higher priced segments in the year ahead.’
Smith is clear that there are still significant challenges for both growers and wineries. ‘Profitability is a key concern. Lower yields this year have restricted grower incomes while for wineries the challenge will be to maintain shelf space and grow key development markets in a time of tight supply. Returns have also been impacted by the high New Zealand dollar and domestic tax increases.’
Smith said the wine industry has a clear path forward following the Strategic Review of 2011 which is now being actioned by New Zealand Winegrowers.
‘The Strategic Review has provided a clear blue-print for action by the industry and New Zealand Winegrowers. We are now fully into the implementation phase with our new Plan which includes increased focus on sustainability, social responsibility and export growth in development markets. We are confident the Plan ensures the industry will be well-positioned to take advantage of the significant international opportunities that exist for New Zealand wine.’