Latest wine market sale trends, November 2007

30 November, 2007

NEW ZEALAND WINE SALES

Key facts:

• Total New Zealand wine sales for Year end June 2007 - 126 million litres
• 40 per cent domestic share with low annual growth of only two per cent in New Zealand wine
• Export sales are driving total sales growth of New Zealand wine with 60 per cent of sales and annual growth of 28 per cent

TOTAL NEW ZEALAND WINE SALES SPLIT – JUNE YE 2007

DOMESTIC WINE SALES

The growth in domestic demand for local product has flattened in the last 12 months. Sales of New Zealand wine on the domestic market were 51 million litres (June year ended 2007). Total wine imports were 42 million litres.

Key varietal trends are:

• Preference for New Zealand grown Sauvignon Blanc, Pinot Gris, Chardonnay and Pinot Noir over imported wine styles (especially Australian Chardonnay) is maintained
• Sauvignon Blanc is estimated to be 50 per cent of total white bottle sales
• With an increased number of Pinot Gris brands available we are experiencing more competition (lower prices) and expanded distribution into new channels
• Chardonnay and Riesling are the two varieties losing sales to Sauvignon Blanc and Pinot Gris • In the red wine segment there is steady growth in demand for lighter style red wines. Pinot Noir is the highest growth variety in this category. Further stimulus for this variety has come from the recent entry of many more brands at the $20-25 price point (e.g. Rabbit Ranch which is a market leader in grocery in the over $20 price category), coupled with a general increase in Pinot Noir availability.
• Historical red bottle favourites, the Cabernet Merlot blends and Merlot are retaining market share however the fuller-bodied Australian wine styles, Shiraz and Cabernet Sauvignon, are declining in popularity.

Market trends

• Increased availability of New Zealand wine in all distribution channels
• Supermarkets continue to grow and are estimated to have 70 per cent market share of total wine sales. The impact of this growth is continued closure or downsizing of the traditional liquor barn/retail stores.
• Highly competitive pricing and discounting especially by supermarkets, retail liquor stores and internet fine wine sites/email newsletters (www.blackmarket.co.nz, Corporate Direct, www.fwdc.co.nz, www.advintage.co.nz )
• An increasing diversity of alternative varieties (niche demand for New Zealand Viognier and Syrah)
• Other new wine styles being produced include Arneis, Pinot Blanc,Tempranillo, Montepulciano

What’s Hot

Pinot Gris 

Sauvignon Blanc 

Pinot Noir 

Viognier 

Syrah 

Single vineyard wines 

Central Otago Pinot Noir and Pinot Gris

New Zealand Wine Export Sales

Statistics for MAT to September 2007 show total wine exports have grown to 81.2 million litres. Sales of Sauvignon Blanc and Pinot Noir at export far exceed sales of these varieties on the local market.

Sauvignon Blanc continues to dominate exports with 75 per cent of total exports. Annual growth is 35 per cent over the previous year. All key markets report strong growth in this variety.

Pinot Noir, now our second largest export variety, bounded ahead and grew by 42 per cent. This variety is also showing strong growth in all markets.

Chardonnay had growth of 10 per cent, largely due to lower sales for this variety in a number of markets (UK, Germany, Ireland, Japan).

Pinot Gris is starting to show signs of long-term export potential with an MAT growth rate of 115 per cent. This variety however is still only one per cent of total exports.