New Zealand on coronavirus wine strategies: ‘The outlook may be challenging – but as an industry, we will get through it’
The industry is powered by exports, and despite the challenges of the past 12 months, New Zealand’s wine industry saw record exports for the year ended June 30, 2020: totalling $1.92bn ($1.3bn USD), up 6% on last year. Domestic sales were around $500m ($339m USD).
But looking forward, New Zealand Winegrowers acknowledge the industry will have to re-think the international dimensions of the industry and become more self-sufficient. This includes re-thinking its workforce; re-imagining tourism activities, and coping with difficult global economic scenarios.
New Zealand 2020 vintage ‘nothing short of exceptional’
Despite the impact of the coronavirus pandemic on vineyard and winery processes, New Zealand has enjoyed ‘near perfect’ growing conditions. It reported a 2020 vintage ‘nothing short of exceptional’.
New Zealand was moving into Alert Level 4 – the highest alert level with a nationwide lockdown - just as vintage 2020 kicked into full speed in March.
“In New Zealand, we were privileged to be able to complete our grape harvest as ‘essential businesses’, but the effort and stress involved in doing so safely was high," says New Zealand Winegrowers.
“Our total 2020 harvest of 457,000 tonnes reflects the near perfect growing conditions experienced in most of the country, and a 2% increase in planted area to 39,935 hectares. The successful harvest was good news for growers who have only one opportunity each year to generate the income to carry them through the next 12 months.”
For wineries, the impact of lockdown and COVID-19 has varied enormously, says New Zealand Winegrowers.
“Positively, for those wineries whose focus is on supermarket and ‘big’ retail channels, sales have increased. This reflects the positive reputation that New Zealand wines have with consumers and retailers.
“For other wine businesses the story is more challenging. Physical distancing measures have either halted or significantly slowed on-premise consumption in many markets, but online sales have surged, whilst closure of the border has cut-off the flow of overseas visitors to cellar doors.”
Wine is New Zealand’s sixth largest export good, with product exported to more than 100 countries. The US is the largest export market, followed by the UK, Australia, Canada and Germany. But exports are not the only international dimension to the industry.
A number of workers come in from overseas – this year they have been limited by border restrictions. Similarly, tourism is a huge industry for the country and wine tourism has also had a large role to play in selling the story and image of New Zealand wine.
“For those New Zealand wineries whose markets and channels are focussed on tourism or onpremise, sales and orders have fallen significantly,” says New Zealand Winegrowers.
“Some of these impacts were tempered by a brief rise in domestic New Zealand tourism, with regions close to major centres now catering to a surge of Kiwis exploring their own backyard. But the re-emergence of community transmission means regions more dependent on tourists will be hurting, and we have initiated some economic research to better understand the likely impacts on smaller wineries, and what government support may be needed.”
As with other industries, digital is becoming more and more important for telling the story behind New Zealand wine.
“COVID-19 impacted the way we told the New Zealand wine story to trade and consumers, and kept our own members informed. Many promotional events have needed to be cancelled, and with borders closed, our international visitor programme has been suspended. To meet members’ needs in this changed environment, we have responded with a refocused marketing effort, including digital options such as webinars and a more targeted suite of information.
“As we look to the future it is clear that, for the short term at least, our sector is going to need to be more self-sufficient in terms of personnel, as access to offshore workers will be limited by border restrictions. With winter pruning nearly complete, our focus is the workforce for vintage 2021. We are working with government agencies to attract new workers to our sector to ensure we have the personnel in place to bring in the 2021 crop.”
‘The outlook may be challenging – but as an industry, we will get through it’
Looking forward, New Zealand Winegrowers acknowledges the likelihood of disruption from border closures or restrictions. But it remains positive about the future of the industry.
“We will be forced to re-think parts of our workforce, re-imagine our tourism activities, and cope with what seems likely to be a global recession. For some grape and wine businesses, the outlook may be challenging.
“But as an industry, we will get through it. By investing in the New Zealand wine category, by focussing on good business practices, with good leadership and by keeping our eye on the fundamentals of our past and current success – our reputation, our diversity and our sustainability - we will build a strong foundation from which to continue to grow, and expand the global presence of New Zealand wine.”