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New Zealand Winegrowers Annual Report

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200 YEAR END JUNE NEW ZEALAND WINEGROWERS ANNUAL REPORT Wine Institute of New Zealand Incorporated The wine industry can take a lot of confidence from the past year. It was a record breaker: 500+ wineries, 50+ plus million litres in exports and dramatically improved domestic sales. This represents a major step up, even from the rapid growth of the past decade. Brian Vieceli, Chair, New Zealand Winegrowers. 1 CONTENTS 2 HIGHLIGHTS 3 CHAIR‘S REPORT 13 MARKETING REPORT 16 AIR NEW ZEALAND WINE AWARDS 2004 17 SUSTAINABLE WINEGROWING NEW ZEALAND® 18 INDUSTRY INFORMATION 2004/2005 20 STATISTICAL SECTION 20 Summary New Zealand Wine 1995–2005 21 Grape Growers & Wineries 1995–2005 Wineries by Category Wineries by Region Grape Growers by Region 22 New Zealand Producing Vineyard Area 1997–2007 By Grape Variety (hectares) By Region (hectares) 23 New Zealand Vintages 1995–2005 By Grape Variety (tonnes) By Region (tonnes) 24 New Zealand Wine Exports by Market1995–2005 25 New Zealand Wine Exports by Variety 2001-2005 26 New Zealand Wine Exports Year End June 2005 27 Wine Imports Into New Zealand 1995–2005 By Country of Origin By Product Type 28 Wine Imports Into New Zealand Year End June 2005 30 MEMBERSHIP LISTS 30 WINERIES YEAR END 2005 43 GRAPE GROWERS YEAR END 2005 51 INDUSTRY BOARDS 52 INDUSTRY DIRECTORY 2 HIGHLIGHTS New Zealand’s 500th Winery Marketing New Zealand Wine In 2005 we welcomed the 500th winery into This year saw the largest ever generic the New Zealand wine community, while the marketing programme run by New Zealand number of growers also continues to increase. Winegrowers, with over 150 wineries involved in a NZ$4.5 million campaign Total Sales Reach New Heights in key export markets. Total sales of New Zealand wine reached Communicating the 96 million litres, a new industry record - more than 40% higher than the previous peak. New Zealand Wine Story Exports for the first time exceeded domestic After 18 months in production, 2005 sales, accounting for 53%. saw the release of the inaugural New Zealand Wine CD Rom. The CD Rom Exports Exceed 50 Million Litres constitutes an invaluable information At June year-end exports reached 51 million resource and communication tool for wineries litres – an increase of 64% on the previous and their export market representatives. record of 31 million litres set last year. The value of exports was $435 million, up 44% Continued Innovation on last years’ total of $303 million. The past year has seen the continued implementation of the largest ever wine WET Rebate research project, the Sauvignon Blanc At New Zealand Winegrowers’ urging, Flavour and Aroma project, worth $14.5m successful negotiations between the New over 6 years. Zealand and Australian Governments led to the Australian Government extending a tax Sustainable Winegrowing rebate of up to $A290,000 per annum for New Zealand each New Zealand exporter selling into The roll out of the SWNZ winery programme the Australian market. met with a very positive response this year, with numbers increasing by 68% from International Agreement Ratified 30 to 51, representing nearly half of our The World Wine Trade Group (WWTG) total wine production. Vineyard membership Mutual Acceptance Agreement on of the scheme increased to 431 members, Oenological Practices has been ratified by covering 11,593 hectares. Parliament. This enables New Zealand wines to freely enter key markets such as the USA and Canada without further certification of winemaking practices, potentially resulting in significant savings for wineries. 3 2 NZW 2005 500th winery Exports exceed 50 million litres Record total New Zealand Wine sales of 96 million litres CHAIR’S REPORT Stepping Up New Zealand’s grape and wine industry Post-harvest nerves were quickly dispelled, Driving growth was the increased availability stepped up this year. Buoyed by the record however, by the extraordinary growth in of Sauvignon Blanc. Sauvignon Blanc exports 2004 vintage, total sales reached new exports over the past year. For the first time jumped 84% in volume and now account for heights, our 500th winery opened its doors ever, New Zealand exported more than it 71% of total exports. Sales of other varieties and exports represented over 50% of total sold on the domestic market in terms of also rose strongly - Pinot Noir exports were sales for the first time. both volume and value. Instead of being up 62%, Merlot/Cabernet up by 35% and Chardonnay up by 27% - indicating positive NZ WINE EXPORTS BY VOLUME AND VALUE 1995-2005 market response to these wines. Growth was strong across all of our 60 Export Volume 500 key markets, driven by buoyant consumer Export Value 450 demand. Sales increased by over 50% in 50 400 es r the world-leading UK market. Exports to 40 350 300 Australia rose 73% and the USA were up 30 250 79%, confirming the importance of these 200 markets to our future. In smaller markets Millions of Lit 20 150 Millions of NZ$ FOB growth was also strong, particularly in 10 100 50 Canada and continental European markets. 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Alongside the opportunity of an abundant NZ WINE EXPORT GROWTH BY MARKET vintage, the industry faced a number of challenges. In particular, a strong New Zealand dollar, rising costs and 120% Volume Value increased taxes placed industry 100% owth profitability under pressure. Gr t 80% r Nevertheless, export projections and vineyard 60% surveys indicate a real confidence that sales 40% will continue to grow in coming years. If the entage Expo forecast growth is to be sustainable, it is rc 20% Pe crucial the industry maintains its focus on 0% innovation, learning, quality and co-operation. UK USA Australia Canada Others With these values as a platform, the industry can look forward to the next step up: sales in excess of $1.5 billion dollars at profitable oversupplied at year end, many leading prices by 2010. wineries have once again found themselves without enough wine to satisfy demand. Extraordinary Exports By June year end, exports had reached 51 Following the record 2004 harvest of 167,000 million litres – an increase of 64% on the tonnes, there was some uncertainty about our previous record of 31 million litres set last ability to sell such greatly increased volumes. year. The value of exports was $435 million, up This is understandable given we were in new 44% on last years’ total of $303 million. These marketing territory – moving from being are landmark achievements for an industry allocators to active marketers of branded that exported just 8 million litres, less than New Zealand wine. one third of its domestic sales, a decade ago. 3 2004 2003 NZW NZ wine exports exceed NZ wine export value exceeds 30 million litres, $250 million dollars for the first time. valued at over $300 million. Wine Act 2003 enacted. CHAIR’S REPORT While export volumes and values were very Domestic Success positive, prices and hence profitability were In parallel with the resounding success in Although producers in all size under pressure. The average value of exports fell to $8.46 per litre - $1.27 or 13% lower export markets, New Zealand wine enjoyed categories enjoyed higher domestic than the June 2004 year. Reduced prices were its best sales year for over a decade on the sales, large wineries experienced the largely the result of the high value of the New local market. Domestic sales of all wines greatest increase. However, since Zealand dollar against key currencies, notably grew to over 80 million litres in 2004/05. imports of bulk wine have declined, the US dollar, and the introduction of more New Zealand wines accounted for 45 it appears a significant proportion of competitively priced brands. Nevertheless, million litres (rising 24% on last year) or the increase for these companies will New Zealand retained its position as the 55% market share. Again, sales benefited be substitution of New Zealand wine country with the highest average sale price from the improved supplies of wine from for imported bulk wine in lower price for wine on the UK market. vintage 2004. point products. The large 2004 vintage gave some companies the opportunity to explore NZ WINE SALES IN DOMESTIC MARKET 2000-2005 new product ranges and price points 50 in overseas markets. Typical of such 45 innovations were the first sizeable bulk 40 35 shipments of New Zealand wine for some es r 30 years. There have been some industry 25 concerns regarding this practice. However 20 moves to increase the accessibility of Million Lit 15 our wine to foreign customers should 10 be welcomed so long as the key elements 5 0 of New Zealand’s premium market 2000 2001 2002 2003 2004 2005 positioning are maintained. The decline in bulk wine imports has UK AVERAGE PRICE (OFF PREMISE) SOURCE: ACNIELSEN, MAT June 2004 & 2005, Off Trade Value produced an overall decrease in total imports. Additionally for the first time 3.79 Total 3.76 2005 in a decade bottled wine imports 3.97 2004 USA 3.96 declined, albeit marginally, in the 3.65 face of increased competition from Spain 3.65 3.72 New Zealand wine brands. South Africa 3.70 5.93 New Zealand 6.29 3.39 Italy 3.35 2.51 Germany 2.47 3.95 France 3.91 3.68 Chile 3.75 4.23 Australia 4.31 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7 Price per bottle (UK Pounds) 4 NZW 2002 2000 NZ Winegrowers commences operations in March, following NZ wine export 19.2 million litres, valued at NZ$168.6 million.
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