Not enough wine to go around: Wine companies to prioritise customers

Morgane Solignac | Stuff Apr 29 2021

A dearth of grapes this vintage has forced a family-owned winery in Marlborough to turn down a new customer in Europe. But it’s not just the smaller operations struggling. One of the biggest players in the global drinks industry, Pernod Ricard, is also reporting it is unable to meet the global demand for Marlborough wine this year, in particular sauvignon blanc, due to the region’s low yield.

One estimate puts the take of sauvignon blanc grapes down 30 per cent against long-term averages, due to early frosts and cool weather during the flowering season.

A Pernod Ricard Winemakers spokesperson said the company was in talks with its partners to determine how it should prioritise supply for customers “in the context of the strong ongoing global demand for the sauvignon blanc category”.

The volume shortage meant the family-owned Marisco Vineyards had to walk away from a deal in Germany to make sure it could supply its long-time customer base.

Marisco Vineyards general manager sales and marketing Siobhan Wilson said the winery, which employs about 80 people, didn’t want to sacrifice one market for another.

“The key focus for us this year is to look after the partnerships we’ve developed over the years … We have a long-term contract with annual supply conversations starting around January-February, which is tricky as vintage happens [March-April].

“So I have to take what our customers would like versus what we have got coming in.”

Marisco started blending this week, so it would have a full picture of what was available, and when, in the next couple of weeks, Wilson said.

New Zealand Winegrowers chief executive Philip Gregan said Aotearoa hit a record-breaking $2 billion in New Zealand wine exports at the end of last year.
“Exports to our key international markets have increased beyond expectations over the past 18 months, and we saw an increase of 19 per cent for the first four months of the new export year (July to October 2020), at the same time in 2019.

“We are already seeing supply and demand tension as a result, and we expect that many wineries will face tough decisions on who they can supply in their key markets over the next year,” Gregan said.

And while increased demand and reduced supply might push up prices, Wilson said they had to be careful.

“We are not just going to put the price up because it is in short supply, because next year what happens if we have a bumper vintage, and we’ve got plenty of wine, do you then discount it?

“What is important when you are selling wine, and when you are building a brand, is a consistency of quality and price.

“So, we all have a responsibility to ensure that we sell at a good price and the right price,” Wilson said.

Ongoing labour shortages, due to the closure of New Zealand’s borders and the restricted number of RSE workers, had also piled pressure onto wine companies.

Wilson said they had challenges coming at them every day and a short vintage was just one of them.

“We have got massive challenges in Marlborough getting wine shipped offshore because of the shortages of boats coming in, the restriction of space … and it is all the result of the pandemic.

“At Marisco Vineyards we are really resilient, my team have been working for me for a long time, and they have experienced many challenges over the year, so we just deal with it.

“The key thing is the communication with our customers and being really honest with them about the situation,” she said.

Coronavirus: New documents show strict wine industry protocols during lockdown

Maia Hart | Mar 29, 2020 | Stuff.co.nz

Strict vintage rules include workers living off-site having to send a photo to their COVID-19 manager of their “daily-routine” to show they are staying socially isolated.

If wineries are in doubt about the best practice during the COVID-19 lockdown, they must “assume everyone has the virus”.

Documents posted to the New Zealand Winegrowers website on March 26, shows the advice given to wineries during the COVID-19 outbreak.

Wineries with more than 20 staff must have a dedicated COVID-19 manager, who had “absolute authority over any procedures involving staff or potential staff interactions”.

Records are to be kept for each person working in the winery, which includes living arrangements and who they are in contact with.

Workers living off-site must send a photo to their COVID-19 manager of their “daily-routine” to show they are staying socially isolated. In some cases, workers had been moved into isolated accommodation, which included caravans on site.

As the production and processing of beverages are considered an essential service, the wine industry has been cleared to work through the lockdown.

Start and finish times in the wineries were to be staggered to ensure different teams did not cross paths.

“Rest breaks” also needed to be staggered to reduce the number of people in one place. Workers were encouraged to take breaks outside, while “observing distancing rules”.

NZ Winegrowers chief executive Philip Gregan said last week the increased safety protocols had meant harvest was slower than previous years.

“If they are going to continue operating then there will be some slow down. At the end of the day that’s what the industry has to expect if they want to continue to operate,” Gregan said.

National MP for Kaikōura Stuart Smith said he understood why people were concerned at this time, but wineries had to meet the standard set, or they would shut.

Machine harvest in the Awatere Valley, Marlborough on March 24.

He said the message to wineries had been “very clear”.

“This is a privilege. But it comes with responsibility, and that responsibility is to not spread the disease.

“I think people are trying to do the right thing, across all of the essential businesses, they’re doing their best.”

Smith said he understood MPI had already visited wineries and other essential businesses in Marlborough.

A spokesperson from Pernot Ricard Winemakers said the health and wellbeing of team members and the community continued to be “the number one priority” through the evolving COVID-19 situation.

With more safety procedures in place, the harvest is happening slower than normal.

“In addition to the extensive cleaning, hygiene and social distancing measures we already had in place; we have implemented additional health and safety requirements at all of our sites that are currently operating to ensure that we meet the Government’s standard, with immediate effect,” the spokesperson said.

“We are committed to doing everything we can to keep our employees, their families and friends, and our community safe and stop the spread.”

By 5 pm on March 27, businesses should have registered with the Ministry for Primary Industries (MPI) on the “Register for Safe-Practice”.

New Zealand Food Safety deputy director-general Bryan Wilson said MPI then verified if safe practices were in place.

  • COVID-19: NZW response

Vintage 2019: NZ Winegrowers

Small but stunning. A wonderfully warm summer has contributed to a superb vintage for New Zealand’s wine regions, with 413,000 tonnes of grapes harvested during Vintage 2019. Although smaller than anticipated, the quality of the harvest is being touted as exceptional from top of the North to bottom of the South Island.

Photo by Alissa Miller, Market Development Manager, Greystone Wines

New Zealand Winegrowers CEO Philip Gregan says a high-quality harvest is good news for the industry as export growth continues, with an increase of 4% to $1.78 billion over the last year. “We have an international reputation for premium quality and innovation. Every vintage is different, but winemakers are excited about the calibre of wine that will be delivered to the bottle and we are confident 2019 vintage wines will be enjoyed by consumers around the world.” However Vintage 2019 is the third smaller-than-expected harvest in a row, so volume growth is expected to be constrained. “Smaller vintages in 2017 and 2018 meant wineries had to work to manage product shortages, and many of our members hoped for a larger harvest this year.

Another smaller-than-expected vintage will mean more supply and demand tension overall.” says Mr Gregan. Wine is New Zealand’s sixth-largest export good, and New Zealand wine is exported to more than 100 countries.

New Zealand wine industry plans for Vintage 2017 after Kaikoura Earthquake

Media Release, New Zealand Winegrowers

new-zealand-wine-industry-plans-for-vintage-2017-after-kaikoura-earthquake58466ec39f416
Philip Gregan, CEO of New Zealand Winegrowers.

The New Zealand wine industry is busy planning for the upcoming vintage after taking into account the impact of the recent Kaikoura earthquake. “We have completed our survey of the impact of the earthquake on our members, ” said Philip Gregan, CEO of New Zealand Winegrowers. “It is clear there was some wine loss as a result of the earthquake, but it amounts to only a little over 2% of Marlborough’s total production. While this is frustrating, this is not a major concern as vintage 2016 was a near record one. This means there is plenty of wine available to continue our market growth.”

As expected the major impact on wineries has been to storage tanks. “Many wineries, both small and large have escaped with no damage at all, but in others, damage to tanks has occurred. Our initial estimate is that 80% of tank capacity in Marlborough is undamaged, but around 20% has been impaired to some extent. These numbers may change as the process of damage assessment continues. ”The priority for wineries with damaged tanks is to repair or replace the tanks they need to have in working condition for vintage 2017.”

“The process of tank repair is already underway but it is going to be a big task which will continue for many months. We have been liaising with affected wineries, engineers, tank manufacturers, the government and the Marlborough District Council to ensure there are no unnecessary impediments to that process proceeding as quickly and safely as possible.”

“Marlborough produces well over 200 million litres of wine each year with over 80% of this destined for export markets. Despite the obvious damage to transport links, we are not aware of any particular issues affecting the movement of wine out of the region at the moment.

We are working with various transport operators, ports and the government to identify and address any issues should they occur.”