New Zealand's Wine Industry Thrives in 2023 Despite Challenges

Published 2023년 8월 1일

In 2023, New Zealand's wine industry showcased remarkable resilience and growth, despite facing challenges such as adverse weather conditions and rising production costs. The sector witnessed a substantial 25% YoY increase in wine export value, amounting to USD 2.4 billion. Although Cyclone Gabrielle caused damage to vineyards, particularly in regions like Hawke's Bay and Gisborne, the industry's reputation for crafting premium, high-quality wines continued to attract growing international demand. The United States emerged as the top destination for New Zealand wine exports, with Sauvignon Blanc being the most produced variety. Despite fluctuations in production volumes for some varieties, the industry is expected to flourish further, driven by rising demand and prices. Factors such as New Zealand's status as one of the Great Wine Capitals, the introduction of an official wine map for Marlborough, and the return of international wine tourists post-COVID restrictions are poised to bolster the industry's growth in the coming years.

Released in early July, New Zealand's annual vintage statistics revealed that wine export value reached USD 2.4 billion in the year up to May-23, marking a 25% year-on-year (YoY) increase. However, this growth occurred despite a 6% decline in harvest yields due to unfavorable weather conditions. Cyclone Gabrielle hit the North Island of New Zealand in early February, causing torrential rain, high winds, and landslides. Regions like Hawke's Bay and Gisborne, known for their vineyards, declared a state of emergency due to extensive damage to infrastructure, homes, and crops. In Hawke's Bay, around 25% of the vintage was lost, with nearly 300 hectares (ha) of vineyards impacted by floodwater and silt, and an additional 140 ha completely destroyed. The region is now in the process of recovering from the cyclone's impact.

The wine industry has shown resilience despite facing challenges such as unfavorable weather, rising production costs, and a scarcity of skilled workers. Furthermore, the drop in production volume and rising costs did not hinder the increase in export value, which was boosted by a surge in sales value due to growing international demand. Despite producing just 1% of the world's wine, New Zealand's wine industry has established the country as the world's sixth-largest wine exporter by value, thanks to its reputation for crafting low-volume, high-quality wines with premium pricing. As a result, these sought-after wines cater to enthusiasts worldwide who seek exceptional flavors and characteristics in their wine choices.

New Zealand wines have achieved significant global recognition, increasing their demand. Wines are exported to various countries, with the United States (US) being the top destination holding a substantial market share. New Zealand's Sauvignon Blanc has gained immense popularity in the US due to its unique flavors and high quality. However, in 2023, there was a slight decline in popularity, with a 6% decrease compared to the record-breaking sales in 2022. The United Kingdom and Australia follow closely, while Canada and Germany also show considerable demand. Additionally, New Zealand wines have found success in Asia, particularly in Japan and China.

In the 2023 vintage, New Zealand's wine production reached an impressive total of 501 thousand metric tons (mt) tonnes. The leading contributor to this production was the Marlborough region, which accounted for a significant 78.62% of the market share, with a harvest of 393.87 thousand mt. However, Marlborough experienced a 5% decrease in production compared to the previous year. Following Marlborough, other notable regions included Hawke's Bay, with 38.41 thousand mt, showing a 4% YoY decline. Central Otago contributed 11.995 thousand mt, reflecting a 5% YoY drop. With a production volume of 11.47 thousand mt, Nelson saw a modest increase of 6% YoY. Lastly, North Canterbury contributed 11.09 thousand mt, experiencing a notable 13% YoY increase in its wine production.

New Zealand’s 2023 Grape Production

Source: 2023 Vintage Survey

In 2023, New Zealand's top-produced wine variety was Sauvignon Blanc, with a production volume of 378.3 thousand mt. However, there was a 4% decline in its production compared to the previous year. Other notable varieties included Pinot Noir, which saw a production volume of 30.53 thousand mt, experiencing a 12% YoY. Pinot Gris followed with 26.1 thousand mt, showing a 14% YoY drop. Chardonnay had a production volume of 22.53 thousand mt, with a significant 24% YoY reduction. Merlot witnessed a marginal increase of 0.21% YoY, reaching a production volume of 9.09 thousand mt, and Riesling had a production volume of 6 thousand mt, reflecting a slight increase of 0.19% YoY.

New Zealand’s 2023 Key Varieties

Source: 2023 Vintage Survey

Despite facing various challenges during the 2023 season, the New Zealand wine industry has experienced a positive year. While production volume decreased, the industry achieved an impressive 25% YoY increase in export value, thanks in part to the growing popularity of New Zealand wines. The rising demand and prices indicate a promising outlook for the industry. Additionally, New Zealand's recognition as one of the Great Wine Capitals of the world and the introduction of an official wine map for Marlborough are expected to boost the demand for their wines further. Moreover, the return of international wine tourists post-Covid restrictions is set to provide much-needed support to smaller wineries heavily dependent on cellar door sales in the remaining months of 2023. With these factors in play, the New Zealand wine industry is anticipated to continue thriving in the coming months of 2023 and exhibit a compound annual growth rate (CAGR) of 4.39% until the year 2027.

For a detailed analysis of the New Zealand wine market, read the Wine Report: New Zealand 2023 on Tridge's website.