NEW ZEALAND WINEGROWERS INC Annual Report 2020 200 Years Celebration Te Whare Ru¯nanga, Waitangi WITHER HILLS Vision Around the world, New Zealand is renowned for our exceptional wines. Mission To create enduring value for our members. Purpose To protect and enhance the reputation of New Zealand wine. To support the sustainable diversified value growth of New Zealand wine. Activities Advocacy, Research, Marketing, Environment COVER PHOTO: NZW 200 YEARS CELEBRATION, TE WHARE RUNANGA, WAITANGI NEW ZEALAND WINEGROWERS INC Annual Report 2020 Chair’s Report 02 Advocacy 06 Research 12 Sustainability 16 Marketing 20 Financials 29 Statistics 32 Directory 40 Chair’s Report NZW 200 YEARS CELEBRATION Perhaps more than any other year in recent times, this was a year of two halves. During the first half of the year the thriving New Zealand wine industry In New Zealand, we were privileged industry celebrated its past, and where - every second of everyday - to be able to complete our grape looked ahead with optimism. The 80 glasses of its distinctive wine are harvest as “essential businesses”, but second half reminded us just how sold somewhere in the world. the effort and stress involved in doing unpredictable the world can be, how so safely was high. Our total 2020 crucial it is to plan for the unexpected, A milestone was reached in February, harvest of 457,000 tonnes reflects and react with agility when the with the opening of the Bragato the near perfect growing conditions unexpected arrives. Research Institute’s Research Winery. experienced in most of the country, This new facility provides us a base and a 2% increase in planted area In September we celebrated the from which to set the national to 39,935 hectares. The successful 200th anniversary of the day on research agenda, trial world-first harvest was good news for growers which the very first grape vines technologies, conduct commercial who have only one opportunity each were planted into New Zealand trials, and connect educators and year to generate the income to carry soils, by Reverend Samuel Marsden students to science and industry. Our them through the next 12 months. at Kerikeri in the Bay of Islands. major levy-funded research projects Over 100 winegrowers and others focus on sustainability (through our For wineries, the impact on sales commemorated the milestone with an vineyard ecosystems pest & disease of the lockdown and the COVID-19 event at the Waitangi Treaty Grounds project), diversification (through our response has been highly variable. and a ceremony at the historic Stone lighter wines project) and quality Positively, for those wineries whose Store at Kerikeri, where a new vine (through our Pinot Noir project). focus is on supermarket and ‘big’ was planted to mark the beginning A potential new project to develop retail channels, sales have increased. of the next 200 years. new more resilient Sauvignon Blanc This reflects the positive reputation vines is under development. that New Zealand wines have with This was a chance to acknowledge consumers and retailers. many of the industry’s pioneers, But these positive notes cannot and reflect on the difficult journey obscure the turmoil that the COVID-19 For other wine businesses the story is from colonial outpost through six coronavirus pandemic has inflicted more challenging. Physical distancing o’clock closing, to painful economic since it hit the world. measures have either halted or reforms, and ultimately to a significantly slowed on-premiseu 2 “Despite the challenges of the past 12 months, in the year ended 30 June 2020 our industry managed to achieve record exports totalling $1.92 billion, up 6% on last year.” BRAGATO RESEARCH INSTITUTE NEW RESEARCH WINERY RESEARCH INSTITUTE BRAGATO 3 consumption in many markets, but online sales have surged, whilst closure of the border has cut-off the flow of overseas visitors to cellar doors. For those New Zealand wineries whose markets and channels are focussed on tourism or on- premise, sales and orders have fallen significantly. Some of these impacts were tempered by a brief rise in domestic New Zealand tourism, with regions close to major centres now catering to a surge of Kiwis exploring their own backyard. But the reemergence of community transmission means regions more dependent on tourists will be hurting, and we have initiated some economic research to better understand the likely impacts MARLBOROUGHNZ.COM on smaller wineries, and what government support may be needed. government officials. They made it Board decided to fund the coming It is too early to say how the shock clear that the way individual members year’s Sustainable Winegrowing of a pandemic will alter consumers’ were responding, and the way New Zealand (SWNZ) costs from habits, but many are likely to reflect New Zealand Winegrowers (NZW) was levy funding, which highlights the on their values and priorities and leading the wine sector response, was importance the Board places on may adjust their purchasing decisions precisely what they were looking for. SWNZ and our commitment accordingly. Ultimately, how to sustainability. New Zealand wine is perceived by the Similarly, although we set up a Safe consumer in a post-Covid world will Harvest Hotline which could be used Similarly, the strength of our regional depend on the core fundamentals that by the public or members to report winegrower associations is important research tells us have underpinned our any potential breaches of COVID-19 to the diversity and sustainability of success to date: our reputation, our measures or issues with workers, our industry. We are holding more commitment to sustainability, and the we were pleased that each of the regular meetings with regional diversity of our offering. issues reported had a satisfactory chairs, and believe these improved explanation, or was readily and relationships between NZW and the Our reputation was enhanced by willingly resolved. regional associations will help ensure the exemplary way winegrowers more effective collaboration on key responded to the COVID-19 crisis, Recognising the financial strain industry issues. which cemented our place within brought by COVID-19, the NZW government circles as an industry that Board made the decision to lower COVID-19 impacted the way we told can be relied on. During the Alert this coming year’s levy rates back the New Zealand wine story to trade Level 4 & 3 periods, we had regular to where they were before last and consumers, and kept our own calls with Ministers and senior year’s 10% increase. In addition, the members informed. Many promotional 4 “Our reputation was enhanced by the exemplary way winegrowers responded to the COVID-19 crisis.” NZW 200 YEARS CELEBRATION events have needed to be cancelled, people irrespective of gender. We current success – our reputation, and with borders closed, our held our first Young Leaders’ Forum to our diversity and our sustainability international visitor programme has bring together and challenge twenty - we will build a strong foundation been suspended. To meet members’ winegrowers from around the country, from which to continue to grow, and needs in this changed environment, and both our Young Winemaker of expand the global presence of we have responded with a refocused the Year and Young Viticulturist of the New Zealand wine. marketing effort, including digital Year Competitions are attracting an options such as webinars and a more excellent calibre of contestant. In conclusion I want to acknowledge targeted suite of information. the sterling efforts of our CEO and Despite the challenges of the past staff particularly during the period As we look to the future it is clear 12 months, in the year ended 30 June of Covid lockdown and subsequent. that, for the short term at least, our 2020 our industry managed to achieve The initial effort to ensure we could sector is going to need to be more record exports totalling $1.92 billion, operate as essential businesses self-sufficient in terms of personnel, up 6% on last year and domestic sales followed by the constant flow of as access to offshore workers will be of around $500 million. information to help ensure the safety limited by border restrictions. With of members and their staff during winter pruning nearly complete, Looking forward it seems likely that vintage was no small task. Working our focus is the workforce for New Zealand’s borders will be largely from home, reduced hours, reliance vintage 2021. We are working with closed for the coming year. We will on zoom meetings and the absence government agencies to attract new be forced to re-think parts of our of the “water cooler” conversations workers to our sector to ensure we workforce, re-imagine our tourism applied additional pressures and that have the personnel in place to bring activities, and cope with what seems they have shepherded our industry in the 2021 crop. likely to be a global recession. through in these circumstances deserves all our appreciation. We are fortunate we already have For some grape and wine businesses, programmes in place to support the outlook may be challenging. But Their challenges and those of the our New Zealand based workforce. as an industry, we will get through Board are by no means over, but our This year we held the Women in it. By investing in the New Zealand reputation, diversity and sustainability Wine mentoring programme for the wine category, by focussing on put us in good stead to navigate the second year, and due to popular good business practices, with good turbulent waters ahead. demand added a NZW mentoring leadership and by keeping our eye programme, available to all young on the fundamentals of our past and 5 Advocacy Protecting members’ Our Advocacy activities focus requirements and support measures ability to produce, on guidance for members, wine were clearly communicated market and sell standards, government engagement, to members.