Wine hope shines strong

The wine sector’s efforts to manage oversupply while maintaining a high-quality product have put the industry in a good position to weather a tough couple of years and emerge with plenty of potential to grow again into the future.

Kurt Lindsay, Bayley’s agent specialising in country and viticultural sales says the wine sector has enjoyed a magic growth period for the past few years, with the latest issues of over supply providing a judder bar rather than a roadblock to its continuing advance.

“The good news is that globally there is still demand growth for the sauvignon blanc variety, one of only two that are still experiencing lifts in consumption,” says Kurt.

Incidentally the other variety experiencing growth is non-Champagne bubbly wines like Prosecco.

As an export variety sauvignon blanc also continues to outperform other varieties in the retail arena, particularly in the United Kingdom and United States.

New Zealand sauvignon blanc accounts for half of all sauvignon sales in the UK today, commanding a premium that sits twenty percent above the market average.

Recent off-trade data shows shipments to the UK hit a 10-year high in the past year, selling 13.2 million bottles over last summer season alone.

He takes confidence from having the industry underwritten by large corporate identities that are in the business for the long haul, and are helping manage surpluses by putting tonnage caps in place.

“Another year of tonnage management by all the companies is likely to see the volumes fall into line. We also see more in-vineyard efforts to limit volumes through pruning technique by reducing the number of canes being tied down, helping limit fruit volume for next year.”

For an industry that can count itself only 50 years old in New Zealand Kurt says the ups and downs experienced by any primary sector can seem amplified by its relative youth.

As a sector, wine has had more than its share flipping from tanks emptied by a post-covid surge in demand, to today’s challenges on moving volume vintages through to sale.

“In terms of influence on land values, yes we are down and volumes of sales are also back.

“However, every transaction comes with a different set of needs for both vendor and purchaser, and it is often a case of looking at the transaction more creatively, across all the land use options it may present.”

For sellers with vineyard blocks that are coming out of supply contract the opportunity is there to remove the vines and open the property out to the lifestyle market, depending upon housing and infrastructure on the title.

“It is very much a case-by-case thing, different conversations with different vendors, and having a strategic plan to get the desired outcome for both parties.”