New Zealand's wine sector must reduce reliance on Sauvignon and boost sustainability, says report
The New Zealand wine industry needs to enhance its reputation by evolving its sustainability activities and lessen its dependence on Sauvignon Blanc by undertaking research into other grape varietals, according to a strategic review undertaken by Pricewaterhouse Coopers (PwC).
“We spent time understanding and looking at the role that NZW plays in the industry, the levers that NZW has and what the priorities should be,” said PwC spokesman Patrick Lyons. He claimed there were three main factors that needed to be addressed. Firstly, New Zealand’s wine industry’s reputation should be enhanced.
“Once you get on the wrong side of a reputational issue it becomes very, very difficult with the wider public to get back on side again,” said Lyons. In practical terms, PwC report says there needs to be “significant evolution” of the sustainability activities via NZW and its member.
“The position of the New Zealand wine industry as sustainable adds to the reputation of the New Zealand wine industry both with consumers and retailers and internationally. Making sure that is enhanced is a huge industry priority.”
A second issue addressed by the report is the need for the industry to respond better to changing market dynamics, and given its heavy reliance on one grape- Marlborough Sauvignon Blanc - New Zealand needs to look into new wine styles. The report highlighted that New Zealand has the highest of one prime varietal of any wine producing country in the world, accounting for nearly three quarters of New Zealand’s total production in 2017.
“When you look at that across a number of key markets, there are changing dynamics in certain countries and being able to respond to those is critical to the on-going success of the industry,” said Lyons.
The New Zealand wine industry also needs to consider spending more on its marketing activities, according to Lyons. “The marketing activity needs to be revitalized to keep it fresh and innovative so it continues to be effective in those markets. When you think about NZW’s marketing spend of about $3 million, it really is a drop in the ocean when you think about other broader marketing budgets.”
Another factor addressed by the report is how to manage and mitigate risks to profitability, and having up to date research on pests and diseases is a vital component of this, as is research on climate change and building resilience, and research on reducing input costs.
“Make sure the benefits of that research is shared with the wider industry. Only through that will you get the benefits across the industry,” Lyons said, adding that everything within the report has to be underpinned by maintaining quality and distinctive wine styles.
In response to the report, New Zealand Wine’s deputy chair Clive Jones said that sustainability emerged from the review as one of the most critical areas, particularly in terms of retaining reputation. “Sustainability has got to become part of every conversation we have across all of our activities,” he said. “Not only in the sustainability group itself, but in marketing, advocacy and research.”
- New Zealand’s wine industry – some facts
- New Zealand produces 400,000 tonnes of grapes a year or 310 million litres
- 413 million bottles of New Zealand wine are sold a year - which equates to nearly 2.5 billion glasses
- There are 67 million glasses of New Zealand wine sold every day, 283 million glasses sold every hour, 5,713 glasses every minute or 79 glasses of New Zealand wine sold every second of the year.
- Consumers world-wide are spending over $7 billion on New Zealand wine a year.