New Zealand wine exports rise in value but face supply challenges
Exports also enjoyed an increase in price per liter, with the September quarter 2021 average value up 4% from September 2020.
Volumes, however, fell 3% due to a reduced harvest. A total of 370,000 tonnes of grapes were harvested during the 2021 vintage - down 19% on last year’s crop.
New Zealand wine exports have continued to grow in value terms, despite the impact of the pandemic. Record exports hit $2bn last year.
“The ongoing demand for New Zealand wine has proven that the distinctive flavours, quality and sustainability of our wines increasingly resonate with consumers around the world. It is encouraging to see that during these uncertain times, consumers continue to choose a premium product they know that they can trust,” says Philip Gregan, CEO of New Zealand Winegrowers.
With a smaller harvest in 2021, however, wine producers now face a balancing act in keeping up with demand.
“Successfully managing the market impacts of the resulting supply constraints is a key focus for many in the New Zealand wine industry. Wineries are having to make tough decisions over who they can supply in their key markets,” said Gregan.
Increasing production costs, the on-going effects of COVID-19 on the border and markets, and strained supply chains, have continued to impact growers and wineries as well.
COVID-19 has greatly impacted the supply chain over the past year, and shipping products continues to be a concern.
“Like every industry dependent on sea-freight, the ability for New Zealand wineries to ship products to market has been greatly impacted, as transport costs more than double and shipping reliability plunges," noted Gregan. "Unfortunately, this is a worldwide problem without any quick fix.”
The projected labour shortage and unavailability of skilled workers due to the ongoing closure of New Zealand’s borders remains a challenge, as these workers play a vital role in enabling the industry to meet the critical seasonal work peaks.
“With ongoing uncertainty at New Zealand’s borders, our industry is working hard to attract new people to our sector, to ensure we have the personnel in place to bring in the 2022 crop, to make our premium wine, and complete winter pruning. The recent decision to allow quarantine free travel for RSE [Recognised Seasonal Employer] workers is positive, and we continue to work with government to ensure that they are aware of the impact labour shortages will have on our members if they are not able to attract the workforce they need.”