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106934 NZW Annual Report 2006

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2006 WINE INSTITUTE OF NEW ZEALAND INCORPORATED NEW ZEALAND GRAPE GROWERS COUNCIL INCORPORATED B NEW ZEALAND WINEGROWERS ANNUAL REPORT YEAR END JUNE C www.nzwine.com Contents 2 HIGHLIGHTS 3 CHAIR‘S REPORT 13 MARKETING REPORT 16 AIR NEW ZEALAND WINE AWARDS 2005 17 BRAGATO WINE AWARDS 2005 18 RESEARCH REPORT 19 SUSTAINABLE WINEGROWING NZ® 20 INDUSTRY RESEARCH & INFORMATION Summary New Zealand Wine (1996-2006) 22 21 STATISTICAL SECTION Grape Growers and Wineries (1996-2006) 23 Wineries by Category Wineries by Region Grape Growers by Region New Zealand Producing Vineyard Area (1998-2008) 24 By Grape Variety (hectares) By Region (hectares) New Zealand Vintages (1996-2006) 25 By Grape Variety (tonnes) By Region (tonnes) New Zealand Wine Exports by Market (1996-2006) 26 New Zealand Wine Exports by Market (Year End June 2006) 27 New Zealand Wine Exports by Variety (2002-2006) 28 Wine Imports Into New Zealand (1996-2006) 29 By Country of Origin By Product Type “New Zealand is remarkable in that, with both the North and the South Islands Wine Imports Into New Zealand (Year End June 2006) 30 to choose from, it can succeed with almost any grape variety.” Stephen Spurrier, Decanter, UK, August 2006 31 INDUSTRY BOARDS 32 INDUSTRY DIRECTORY D 33 INDUSTRY MEMBERSHIP LISTS 1 34 WINERIES YEAR END 2006 47 GRAPE GROWERS YEAR END 2006 3 4 Highlights Chair’s Report NEW SALES RECORD REVISED RESEARCH STRATEGY MOMENTUM Despite these pressures, industry projections While export growth was impressive, the For the first time ever sales exceed A revised research strategy is New Zealand’s grape and wine industry and surveys show confidence that sales will increase is not as marked as last year. A key 100 million litres for the June year end, established which will guide industry continues to gather momentum. Export continue to grow, driven by exports of factor was the smaller 2005 vintage which with total sales of New Zealand wine research activities in future years; earnings in excess of half a billion dollars, Sauvignon Blanc. This is very encouraging, constrained availability of core products. but leaves no room for complacency. reaching 108 million litres. while the New Zealand Grafted sales of more than 100 million litres, and the Export volumes tailed off towards the end of Grapevine Standard, which will assure harvest of a record vintage demonstrate solid To fulfil forecasts, the industry will need the year as some producers ran short of key EXPORTS EXCEED $500 MILLION the provenance of vineyard planting growth over the past year and strong to accelerate efforts in marketing and 2005 wines, but picked up again once the Exports of New Zealand wine surpass material has been developed and is being prospects for the future. innovation without losing sight of the 2006 vintage started to come on-stream. a record $1/2 billion at June year end, implemented by consultants Nimmo-Bell. This growth is even more impressive given integrity and quality that sustain the with sales of 57.8 million litres valued the challenges the industry faces in the form New Zealand wine proposition. On this basis, SUSTAINABLE WINEGROWING at $512 million. This is an increase of of currency fluctuations, inexorably climbing the New Zealand grape and wine industry EXPORTS BY MARKET YEAR END JUNE 06 18% in value and 12% volume on the NEW ZEALAND taxes, a tough retail environment and rising can keep building the momentum to achieve $1.5 billion in sales at profitable prices previous year. A major international review of input costs. Pressures on profitability are by 2010. Sustainable Winegrowing New Zealand, easily overlooked by those who view the By Volume VINTAGE 2006 the industry sustainability programme, industry from the outside, but these pressures STRONG EXPORT GROWTH 185,000 tonnes of grapes are harvested in is completed by consultants Outsourced are very real and ever-increasing for those on Driving growth this year was a solid sales New Zealand's largest vintage, providing Environmental, Australia. the inside. the opportunity for significant export performance in international markets. Exports growth in the year ahead. REVISED DOMESTIC & EXPORT STANDARDS grew by 12% in volume and 18% in value to Wine Regulations 2006 are promulgated, reach record levels of 58 million litres earning MARKETING OF NEW ZEALAND WINE setting revised domestic and export $512 million this year. Wineries join the New Zealand Wine standards for the industry. These will generic marketing and events be implemented over the next year. programme in record numbers and NZ WINE EXPORTS BY VOLUME AND VALUE 1996-2006 contribute to a campaign in excess of HONORARY LIFE MEMBER $NZ4.5 million. Margaret Harvey MW is made an United Kingdom 38% 70 600 U.S.A. 25% Honorary Life Member in recognition Export Volume 60 of her services to development 500 Australia 23% Export Value 50 of New Zealand wine sales in the es Canada 3.5% r 400 United Kingdom. 40 Netherlands 2% 300 30 Ireland 1.5% 200 Millions of Lit 20 Japan 0.5% Millions of NZ$ FOB 10 100 Germany 0.5% 0 0 Others 6% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 “For a country of scarcely 4 million souls, New Zealand has created an outsize stir in the wine world. 20 It's happened so quickly, and on such a globe-spanning scale, that it begs credulity.” 06 Matt Kramer, The New York Sun, USA, February 2005 2 3 5 7 2006 2005 2004 2003 Total sales of more than 500th winery. Exports exceed 50 million litres. NZ wine exports exceed NZ wine export value exceeds 100 million litres and export earnings Record total New Zealand wine sales 30 million litres, $250 million dollars for the first time. in excess of half a billion NZ dollars. of 96 million litres. valued at over $300 million. Wine Act 2003 enacted. 6 Sauvignon Blanc exports set the pace, Initial assessments indicate that quality Pinot Noir volumes reached a record 12% of GROWING LOCAL SALES reach 30,000 hectares by 2010. International is very good to excellent in most regions. the total harvest, anticipating ongoing growth growing 18% on the previous year. Industry momentum received a further boost investment at all levels of the industry shows At present, 72 out of every 100 bottles Weather conditions were extremely in exports of this variety. An additional 121% from local sales, which reached 50 million litres the positive view of growth potential is not of New Zealand wine sold overseas are favourable as the fruit ripened, carrying of up-and-coming Pinot Gris was harvested in the year to June 2006 – their highest level just a local phenomenon. Sauvignon Blanc. through to harvest. The average yield this year. Production of domestic favourite in two decades. With increased competition Anticipating and addressing challenges in the was 8.4 tonnes per hectare – in line with Chardonnay fell by 9% due to smaller crops Pinot Noir bounded ahead, with exports from New Zealand wines, sales of foreign operating environment is essential if these recent years. of this variety in Gisborne and Marlborough. gaining 55% to take over from Chardonnay as wines remained unchanged from the previous confident projections are to be fulfilled. the second most exported variety. Merlot and The varietal mix continued to align Increased production levels were welcome in year at 35.9 million litres. As a result, our Many of the challenges the industry faces the Cabernet/Merlot blends also continued to itself with export demand. For the first the boutique regions of Wairarapa, Nelson, domestic market share increased to 58%. are familiar, but their effects become more expand their sales, with international sales time ever, more Sauvignon Blanc was Central Otago, Canterbury and Waipara, Availability of the larger 2006 vintage is likely pronounced as the industry increases in scale. growing by up to 26%. harvested than all other varieties which had all experienced smaller harvests in to further boost local sales at the expense of Some will be new; consequences of the combined. Production of Sauvignon 2005. Tonnages were up in the major regions industry moving into uncharted territory. Demand continues to be strong in all major imports in the coming year, while the overall Blanc grew by over 50%, reinforcing of Marlborough and Hawke’s Bay as well, markets. UK consumers bought 4% more market is expected to grow 4%-5%, a similar its importance as the engine of with Marlborough harvesting 40% more Perhaps the biggest challenge confronting New Zealand wine this year, despite a slight level to recent years. New Zealand wine exports. than last year. growers and wineries is the industry’s own downturn in total wine consumption there. LOOKING AHEAD success. The fact the industry’s fortunes have The United States now accounts for a quarter been on the rise for some years creates the Another record-breaking sales year indicates of all New Zealand wine sold offshore, with impression they will continue in this way NZ PINOT NOIR EXPORT GROWTH 2000-2006 New Zealand wine is extending its reach in export volumes up 11%. Shipments to indefinitely. The risk is that people lose sight of national and international markets. Looking Australia grew very positively, up 35%. the hard work and careful planning that have towards the future, key statistics show real This is especially good news given the WET 4.5 provided the impetus behind our achievements. confidence that the industry’s current impetus (Wine Equalisation Tax) rebate that applies 4 to our sales into Australia. will carry us much further. In this context, a sharp surge in vineyard 3.5 plantings based on speculation rather than Increased production from vintage 2006 will fuel VINTAGE 2006 3 sound understanding of industry dynamics es r export growth, building upon the momentum would present a potential risk for the future.
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