Philip Gregan says growers and wineries need to continue to build on the basics that have got us to where we are today. NZ Winegrowers

New Zealand Winegrowers CEO, Philip Gregan, has encouraged winemakers and grapegrowers to think more long term and to focus on where they are going and how they are going to get there.

The Covid-19 pandemic, supply challenges, rising inflation and, most recently, the devastation from cyclones Hale and Gabrielle are an understandable distraction from taking a long-term view, but wine producers needed to extend their vision and keep the momentum going on a global success story that goes back more than 30 years.

Wine exports, which were negligible three decades ago, are now over NZD $2 billion per annum, with domestic wine sales reaching NZD $400-$500 million each year. There are more than 40,000 hectares of producing vines and employment is more than 7,000 full-time staff, with thousands more in service sectors and the distribution and retail trade.

“Looking forward, our growers and wineries need to continue to build on the basics that have got us to where we are today. That means continuing to invest in the production of premium, sustainable wines that reflect and represent that distinctive environment in which they are produced. And to resonate with our consumers, how producers do that will be important.

“Consumers, and regulators, are going to demand increasing levels of detail about industry production practices. This has been a long-term trend, and it shows no signs of easing; on the contrary, demands are increasing. Recent moves towards fuller ingredient and energy labelling on wines are indicative of this.

“Our industry’s ability to grow the domestic market will be limited by the small size of the market (just 5 plus million people in total) and intense competition for the consumers’ dollar. While this market may be small, it is still very important—in fact, more than 300 wineries sell only in the domestic market. While the overall market may be constrained, there are growth opportunities, whether it be the return of high-value overseas tourists, the revitalisation of the on-premise trade or the growth of the zero/low alcohol market.

“We need to look after our reputation to ensure our producers are valued by their local communities as an asset worth keeping and protecting.

“Offshore there are undoubtedly significant opportunities that will be the major driver of growth and change in the industry, just as they have been in recent years.

“Export growth has been steady over a long period (despite the occasional ups and downs). In 1999 exports were NZD $125m and they reached NZD $1b in 2009. The NZD $2b mark was reached a decade later in December 2020, and for June year end 2023, MPI is projecting NZD $2.4b. With continuing demand, and expansion of the vineyard area, it seems that NZD $3b of export is now on the horizon.

“It is easy to think about the future based on evolution of current trends, as I have done here. More challenging is to think about the game-changing events that are revolutionary. Half a century ago, the first grapevines in the modern Marlborough wine industry were planted. This revolutionary act fundamentally altered the trajectory of our sector. I wonder if, in another 50 years, growers and wineries will look back to 2023 and be able to identify a similarly game-changing event.”