New Zealand wine industry overview

New Zealand has a global reputation for high quality, well-made wines. But just how significant is the New Zealand wine industry to the NZ economy?

The size of the NZ wine industry

The NZ wine industry had an estimated turnover of NZ$2 billion in 2014, with export earnings making up NZ$1.33 billion of this.

Wine makes an even further contribution to the NZ economy, due to the investment in vineyards and wineries and the plant and equipment that’s needed to operate them.

Internationally, NZ wine generally achieves a premium price in export markets and competes directly with other premium temperate climate countries. The New Zealand wine industry’s key overseas competitors include France, Germany and Chile.

The importance of NZ wine exports

Exports are vital to the success of the NZ wine industry, and Australia and US are they key export markets. (Read more about NZ wine export markets.)

The number one challenge faced by New Zealand wineries is the strength of the NZ dollar (To read about other challenges faced by the New Zealand wine industry, read our wine industry insight.)

How does the New Zealand wine industry compare to other countries?

New Zealand is the 18^th largest producer of wine globally. And whereas Western European wine production has shrunk in the past decade, NZ wine production has increased by 13.5% in the same period.

This chart demonstrates the size of the New Zealand wine industry compared to other countries, in terms of litres of wine produced:

The top 5 global wine exporting countries are France, Italy, Spain, Australia and Chile.

New Zealand wine production levels

The NZ vintage in 2014 produced a record harvest of 445,000 tonnes of grapes. This zapped the previous record by 29%, which was set just the year before in 2013, of 345,000 tonnes.

In the past, record harvests have meant a flooded market of wine, and this oversupply has been an issue. However, for this vintage, it seems that wineries have been better placed to deal with the increased supply and have avoided large inventory levels as overall wine inventory levels were stable.

What is the future of the New Zealand wine industry?

Although the New Zealand wine industry is currently in a robust position, it cannot afford to rest on its laurels.

The Coriolis/NZ Government report of July 2014 (‘What does Asia want for dinner? A drink’) says that the New Zealand wine industry is “still too much of a ‘one-trick-pony’ with an over-reliance on Marlborough Sauvignon Blanc; need to diversify.”

Summary

• The NZ wine industry had an estimated turnover of NZ$2 billion in 2014, with export earnings making up NZ$1.33 billion of this.
• Exports are vital to the success of the NZ wine industry, with Australia and US being the key export markets.
• New Zealand is the 18^th largest producer of wine globally.
• NZ wine production increased by 13.5% in the past decade.
• The NZ vintage in 2014 produced a record harvest of 445,000 tonnes of grapes.
• The New Zealand wine industry is too reliant on Marlborough Sauvignon Blanc.

Sources:

• iFAB 2013 Beverages Review’ – a report from Coriolis for the NZ Government’s Food and Beverages Review, January 2014.
• Vintage 2014: New Zealand wine industry benchmarking survey’ – a joint publication from Deloitte and New Zealand Winegrowers, December 2014.
• ‘What does Asia want for dinner? A drink’ – a report from Coriolis for the NZ Government’s Food and Beverages Review, July 2014.