HE WORLD, ND T NEW OU ZE AR AL • A S ND E IN IS R W E L N A O N W IO N T E P D E C F X O E R S I T T I S R E O X F C E D P E T N I O W N O A N L E W R I S N I E D S N • A A L R A O E U Z N W D E T N H , E D L W R O O R W L D E , H N T E D W N Z U E O A R L A A • N S D E I N S I R W E L N A O N W O I N T E P D E F C O X E R S I T NEW ZEALAND WINEGROWERS ANNUAL REPORT 2014 OUR VISION AROUND THE WORLD, NEW ZEALAND IS RENOWNED FOR ITS EXCEPTIONAL WINES OUR MISSION TO CREATE VALUE FOR OUR MEMBERS OUR PURPOSE TO PROTECT THE COMPETITIVE POSITION OF WINE FROM NZ TO SUPPORT THE PROFITABLE GROWTH OF WINE FROM NZ OUR ACTIVITIES ADVOCACy / RESEARCh / SUSTAINABILITY / MARKETING CONTENTS NEW ZEALAND WINEGROWERS ANNUAL REPORT 2014 2 CHAIRS’ REPORt 14 SuSTAINABILITY 30 INDUSTRY BOARDs 6 2014 REPORT CARd 16 MARKETINg 31 INDUSTRY ORGANISATIONS 17 List of visitors to New Zealand 7 BIOSECURITY POSTER 19 User pays events summary 32 NEW ZEALAND 2013/2014 wINEGROWERS’ kEY 8 ADVOCAcy CONTACTS 20 WINE AwARDs 10 RESEARCh 20 Air New Zealand Wine Awards 2013 11 Key initiatives and results 20 Bragato Wine Awards trophy 12 Projects funded, research results 2013 reports, articles, fact sheets published over 2013/2014 21 STATISTICS 13 INFORMATION 21 New Zealand wine industry RESOURCES key performance indicators 22 Summary: 13 Surveys, publications and New Zealand wine reports 23 New Zealand Winegrowers membership 24 New Zealand producing vineyard area 25 New Zealand vintages 26 New Zealand wine exports by market 28 New Zealand wine exports by variety 29 Wine imports into New Zealand CHAIRs’ REPORT WE ARE ALL WINEGROWERS of 2012. Both export value and volume experienced a 10% uplift Wine is an iconic New Zealand A PREMIUM as overseas sales earned an product. It attracts high spending REPUTATION IS THE unprecedented $1.33 billion f.o.b. tourists. It enjoys an extraordinary FOUNDATION OF and neared 190 million litres. The export growth rate year-on-year. NEW ZEALAND WINE’S average value per litre remained It is New Zealand’s leading shelf- ICONIC STATUS. steady at $7.11 for all wine and stable, consumer-ready product, $8.32 for packaged wine; a solid placing the name of our country performance given the deadweight and its regions on the lips of of continued high currency levels. millions of consumers worldwide. Australia remains the leading A premium reputation is the export destination accounting for foundation of New Zealand wine’s 53 million litres or 28% of total iconic status. It is the reason that signalling confidence that there is export volumes. Exporters to this consumers are willing to pay still a greater market for our wine market are well aware that some more on average for New Zealand than we have been able to supply producers in that part of the world wine than for almost any other to date. would like to see WET rebate country’s wine. Without those entitlements changed; but that can willing consumers, wine production The “two-speed” growing season only happen in accordance with in New Zealand is not an economic got off to a rapid start but slowed Australia’s international obligations. proposition. in the lead-up to vintage with a run of fine but cool weather in most North America and Northern The reputation of the New Zealand regions allowing for good flavour Europe are where the fastest wine industry is inextricably bound development. Late rains brought growth is happening; USA to the reputation of our country as the season to a close, but quality experienced growth of 16% in a whole. Benefits and risks to the is generally of a high standard the past 12 months and the hub good name of New Zealand are with some standout regions and markets of the Netherlands and benefits and risks to the good name varieties. Germany were up 25% and 52% of New Zealand wine. respectively. China and Hong Kong, New Zealand Sauvignon Blanc is a on the other hand, have slowed As wine moves closer to becoming must-have category in restaurant considerably but the potential in a $2 billion top-5 New Zealand and retail listings the world over. these markets is undiminished. export industry, the need to Little surprise then that, at 310,000 support its reputation with tonnes, it represented 72% of the In the domestic market the story increased investment and stronger total harvest in 2014. Pinot Noir was different. While the total protections becomes ever more increased production 15% to 36,500 market continued to hover around pressing. tonnes with significantly larger 90 million litres, New Zealand wine harvests in all South Island regions. sales slipped an estimated 6% as Ultimately, every stakeholder in the Chardonnay, Pinot Gris and Merlot wineries continued to prioritise industry shares an interest in and all increased production 7-8% on export markets. a responsibility for the premium the back of strong demand. reputation of New Zealand wine. It is the factor that unites growers, STOCKING UP ON THE MOVE regions, boutique operations and The highly successful sales year left large corporates under a single Strong sales have made wine a star stocks needing replenishment and banner: it is what makes us all performer. Wine exports now earn even greater demand forecast. A winegrowers. more foreign exchange for New bountiful vintage was needed to fill Zealand than butter, fin-fish the tanks and 2014 delivered. or kiwifruit. BOUNCE-BACK At 445,000 tonnes, the harvest Wineries took full advantage of the The impetus of the 2014 vintage will may seem a drop in the ocean glorious 2013 vintage to bounce very likely take wine to around $1.5 compared to our competitors; but back from the supply constraints billion in exports during the next it was a record for New Zealand, 2 CHAIRS’ rEPORT year. Current growth estimates will Partnerships with MPI, MFAT and VINTAGE 2013 (BY TONNES) see exports climb to $2 billion in NZTE have been invaluable in 450 exports by the end of the decade, helping wineries to get into, and get placing wine firmly among the New to grips with, new markets. But the 400 Zealand’s top 5 traded goods on key that has ultimately unlocked 350 current figures. those opportunities is the premium 300 reputation of New Zealand wine. NDS) A Throughout the post-GFC years, 250 wine has consistently outperformed Confidence in those efforts is the government’s Business Growth demonstrated by a lift in vineyard 200 Agenda. Wine can claim many and infrastructure developments in (THOUS TONNES 150 achievements since 2008: the past 12 months. The industry is on the move once more. 100 export volumes have more than 50 doubled; With full tanks and the possibility 0 that some stocks will be carried 05 06 07 08 09 10 11 12 13 14 export value has increased by forward, it is worth repeating the YEAR 60%; caution from last year’s report. Increases in productive capacity export returns have grown by should be based on a clear-eyed VINTAGE 2014 (BY VarIETY) 8% per annum on averages assessment of market demand. against a national average of 2%; Wineries need to undertake careful and realistic planning of future a direct contribution to GDP of production and make decisions around $700 million annually; that account for growth across the whole industry in the longer-term. wine tourists spent more than $814 million annually; REPUTATION, REPUTATION, REPUTATION more than 7,700 people have been directly employed on a full All this investment would count for time basis. very little without the reputation SaUVIGNON BLANC 72.2% RIESLING 1.4% PINOT NOIR 8.5% SyraH 0.5% that New Zealand wine has built up CHARDONNay 6.7% GEWÜRZTraMINER 0.5% PINOT GRIS 5.6% CabERNET SaUVIGNON 0.4% Throughout this period, investment over the years. MERLOT 2.5% OTHER 1.6% has focussed predominantly on building markets. Growers The past 12 months have seen some and wineries have relentlessly challenges to brand New Zealand pursued new opportunities in the and hopefully some lessons changed commercial environment. learned. From the > “New Zealand’s successes are undeniable; with industry and export growth galloping ahead year after year… Behind the scenes the New Zealand industry has been focused on exporting wine of high quality rather than trying to lure fans with very cheap prices — as several other countries have done.” DAVID LAWRASON, WINEALIgn.COM, CANADA, JulY 5, 2014 CHAIRS’ rEPORT 3 CHAIRs’ REPORT 2014 WINES BY EXPORT VALUE > perspective of the wine industry, 1400 these challenges have underscored the fact that everyone who trades 1200 on our national reputation has an obligation to look after it. 1000 COMMITMENT TO ) A PREMIUM REPUTATION 800 Quality and integrity should never be in question. Customers need IS A POWERFUL UNIFYING MILLIONS 600 FORCE FOR THE WINE Z$ ( to be able to rely on the New N Zealand name. To break that trust INDUSTry. 400 is to undermine the basis of our reputation and our national brand. 200 05 06 07 08 09 10 11 12 13 14 Now that news and opinions about YEAR products can gain the attention of millions in seconds, there is no margin of error.