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NZ Winegrowers Annual Report 2019

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NZ Winegrowers Annual Report 2019 NEW ZEALAND WINEGROWERS INC ANNUAL REPORT 2019 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 New Zealand Winegrowers Inc Annual Report 2019 01 Chair’s Report 02 02 Advocacy 10 03 Research 16 04 Sustainability 24 05 Marketing and Events 28 06 Information Resources 42 07 Financials 44 08 Statistics 46 09 Directory 54 1 01 CHAIR’S REPORT This year the Board Evolving for the Future completed its strategic The strategic review report concludes review of the wine that our focus as an industry needs to be on enhancing the industry’s industry — its first since reputation and sustainability 2011. We engaged credentials, responding to changing Pricewaterhouse Coopers market dynamics, and managing and to help us dig deep into a mitigating risks to profitability, all underpinned by maintaining quality, wide range of questions. distinctive wine styles. The process, and their So what have we done as a result report, provided us of the review? and all members with a First, it’s your review, so we shared wealth of usable insights it with you. We visited all the main into the state of our wine regions in October to present sector, challenges and the report and its finding to members, opportunities. and again last month we toured the regions to explain decisions taken so far, and how it will be implemented. One of our key goals for this strategic review was to produce a study of the industry and its future that is usable for you today. If you have not read the report, I strongly recommend that you do. It’s all in digestible bites at nzwine.com/members under Reports & Statistics, with separate chapters on Sustainability, Supply, Demand, Regions, Research, Celebrating 2 Excellence, Technology, Regulation, Since then, the Board and Another key industry dynamic Business Models, and Supply Risks. management have worked examined was land availability in hard to prioritise and plan Marlborough, our largest winegrowing Next, we confirmed New Zealand effective implementation of region. The report concludes that Winegrowers’ existing vision – that the review’s outcomes. there is approximately 5,000 hectares around the world New Zealand is of commercially viable, productive renowned for its exceptional wines – The strategic review report noted land remaining in Marlborough, and but updated our purpose statement the continued steady growth of PwC’s modelling suggests the region to better reflect why we exist: to the industry, and identified a range may near supply capacity limits protect and enhance the reputation of challenges and risks that need by around 2028. This implies that of New Zealand wine; and to support to be addressed to maintain that Marlborough wineries will increasingly the sustainable and diversified value trajectory, and ensure all members need to focus on value enhancement growth of New Zealand wine. have the opportunity to benefit. and productivity, while maintaining This year’s export results again reflect The Board then took some quality. New Zealand Winegrowers’ the industry’s strengths, with total initial steps: research efforts will support this drive. VINEYARD GLADSTONE export value for the year ended June • We responded to members’ 2019 up 6% on the previous year to Over the whole country, New feedback about how to celebrate $1.83 billion and volume up 5% to 270 Zealand’s producing vineyard area our industry’s successes by million litres. The average price per grew this year by 600 hectares developing a new New Zealand litre was up 1% on the previous year to or 2% — to 38,680 hectares, with Wine of the Year Awards to $6.74 per litre, with packaged wine up each of Hawke’s Bay and Marlborough recognise a broader range of 2% at $8.55. The UK and USA led the recording growth of over 2%. achievements within our sector; and growth, with value growth outpacing Sauvignon Blanc, Chardonnay, volume growth in both markets. Pinot Noir and Pinot Gris recorded • We sharpened our focus on the largest vineyard area growth. communicating directly to Based on plantings yet to come members usable developments into production, we estimate total and trends through the Bragato growth in productive vineyard area to Conference, Grape Days, Spray continue at around 1% for at least the Days, and other channels. next two years. 3 CHARDONNAY AND SPARKLING SYMPOSIUM 2019 SPARKLING AND CHARDONNAY Implementing the Strategic As a result of the strategic review Review outcomes we are: The risk with any organisational Developing and publishing KPIs for review is that the findings simply sit New Zealand Winegrowers, and health on the shelf. Your Board is determined indicators for the industry as a whole that the investment in the strategic review will deliver measurable results Ensuring diversity is showcased for the benefit of members. We across all our activities formed an implementation committee of the Board to guide and monitor the Revamping the New Zealand implementation of decisions taken by Winegrowers management structure the Board, and to report on progress to better reflect the importance of to the Board and members. sustainability We developed a five year budget forecast for New Zealand Offering greater, and clearer, support Winegrowers, and approved a new to regions budget for the 2019/2020 year that will begin to give life to the Expanding the focus on domestic changes. We acknowledge that the wine tourism, while stopping most 10% levy increase this year will cause levy-funded activity in Australia pain for some, but as a levy payer myself, I can assure you that the Refocussing activities in Advocacy, Board has scrutinised carefully all Environment and Research and existing and proposed expenditure, and will continue to do so. We Continuing to offer timely and consider the increase is necessary relevant information. if New Zealand Winegrowers is to The Board will continue to report deliver at least the same level of to members on initiatives and service to members as it has in the changes that New Zealand recent past, while also delivering the Winegrowers is undertaking as a strategic review outcomes. result of the strategic review. 4 Strength through agreements will make clearer the our regions kinds of support and efficiencies that we can provide to regional One of the industry’s strengths associations — including governance is the diversity of its regions, and training, accounting support, website the mix of varieties, styles and and IT support, membership database stories they contribute to our overall access and training, and one free New Zealand wine offering. This place at key NZW events. finding came through strongly in the strategic review. But we also More emphasis on our regions was heard that regions would appreciate also part of the new format for the more engagement with the national New Zealand Wine Awards, first held body, and more support for regional in November. As our single annual administration, and more clarity over industry celebration, the event now our respective roles. provides more opportunities to celebrate the uniqueness of each We discussed this with regional Chairs region and its wines, the achievements at a recent Regional Membership of our emerging leaders from the Council meeting, and have agreed a Young Viticulturist of the Year, number of steps to make this a reality. Young Winemaker of the Year, and New Zealand Winegrowers’ new the New Zealand School of General Manager Sustainability role Winegrowing, and to recognise will be given specific responsibility for other achievements. This year we oversight of the relationship between were pleased to honour three new NZW and each regional body, and Fellows, recognising the outstanding we will make sure we attend more contributions to New Zealand regional association meetings. New winegrowing made by Jane Hunter, six year relationship agreements Mark Nobilo and Ivan Sutherland. This with each region will match the year’s Wine Awards promises to be six year mandate of New Zealand an even broader recognition of our Winegrowers from its members under collective achievements. our levy orders. And in addition to providing for regional funding, those 5 WAIPARA HILLS WAIPARA Bragato Research Institute Climate change Winegrowing is a very low net emitter (BRI) of greenhouse gasses. In fact it is Potential impacts of climate change precisely the kind of low-carbon, This has been an exciting year of are some of the most significant high value land use the Productivity consolidation and progress for unknowns facing our industry, Commission said New Zealand New Zealand Winegrowers’ wholly- which is why BRI has a major would need to expand if it is to owned national grape and wine climate change programme under achieve a sustainable low emissions research centre — the Bragato way. The first phase — completed this future. Assuming the Bill becomes Research Institute. year —modelled climate scenarios law, we will be watching carefully for nine winegrowing regions and As recommended in the strategic to ensure it is implemented in a presented those finding to members. review, we expanded the independent way that recognises winegrowing’s The next two phases will explore depth on the BRI Board by sustainability advantages, and meets the impact of different climate appointing two of New Zealand’s the needs of
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