Days of cheap Kiwi wine are over, says New Zealand wine chief

The New Zealand wine industry has gladly gone back to the days when demand far outstripped supply and it could concentrate on producing quality, premium wine, and get away from the cheap wine market, according to Philip Gregan, chief executive of New Zealand Winegrowers.

Gregan was speaking to this week in the middle of a world tour that is taking him to all New Zealand’s key markets around the world. His message, he said, has been the same wherever: “We have returned to where we in 2008.”

What happened between 2008 and 2010 when New Zealand went through three boom vintages, resulting in a glut of wine on the market, and the start of the sub £5 New Zealand wine category in the UK, was a “quirk”.

Gregan was quite clear those wines will no longer be available and the category can get back to pushing up its price point, which, he said, according to latest Nielsen figures, sits at around £7.28.

““The market has got to get used to that. Cheaper wines will disappear from the New Zealand wine category,” he added. “That pricing was the exception that proved the rule.”

The challenge, he admitted, was to get the trade to see the New Zealand category for what it is now.

“New Zealand never has been and never will be a low cost wine producing country. It is not sustainable at lower prices. We are back on track in building up our premium wines.”

He conceded New Zealand had lost some ground in the UK in volume terms, but he was “very optimistic” about the future.

In particular he sees further growth for what is “the very exciting story of Pinot Noir” and the development of different styles from different regions.

He is also confident that New Zealand Chardonnay can have a new lease of life. “We need to do a better job in telling that story and there is no reason why we cannot be equally successful with New Zealand Chardonnay as we have with other varieties.”

Gregan said New Zealand Winegrowers would continue to concentrate on promoting its wines in the UK direct to consumers by supporting the major consumer wine shows. “It is what we call our ‘glass in hand’ strategy. If people can taste New Zealand wine then they go on to buy it, write about it or recommend it.”

He said it was committed to continuing with its annual standalone trade tasting in January and would not be interested in linking up with a number wine country, like with last week’s Beautiful South tasting. “Our annual tasting is very important to us and we would not look to replace it with a combined tasting.”

New Zealand Winegrowers does not currently expect to be at next year’s London Wine Fair, but stressed “never say never” and he was interested to see how the new show at London’s Olympia works.

Whilst the overall trends for New Zealand wine might have returned to where they were in 2008, the industry is a very different animal. In 2008 New Zealand produced 285,000 tonnes of grapes, in 2013 that had reached 345,000.

The boom years saw the value of New Zealand’s wine exports 33% to 1.2 billion New Zealand dollars since 2008. Its market in China increased ten times over, to 2.2 million litres.

He said it was working hard to build its share in North America, across both the US and Canada, in the short to medium term. “And then longer term, China.”

It also, he said, needed, to be stronger in the northern European and Continental European wine markets.

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