Growers aim at premium red sales

The New Zealand wine story needs to have credibility beyond sauvignon blanc.

Hawkes Bay winegrowers are joining forces to try to change New Zealand's image as a one-and-a-half trick pony on the international wine stage.

The vast bulk of New Zealand's wine exports are sauvignon blanc, with a sideline in pinot noir.

Hawkes Bay's increasingly impressive fuller-bodied reds, including Bordeaux-style cabernet/merlot blends and syrah, hardly rate an export mention.

As the country's second-largest wine-producing region next to Marlborough, and with red wine accounting for 50 per cent of its production, Hawkes Bay is gearing up to meet that challenge.

The New Zealand wine industry is at a crossroads. It has attained the long sought-after benchmark of $1 billion in exports but is facing a large oversupply problem, with dumping of bulk wine on the international market undermining New Zealand's status as a premium wine producer.

Bulk exports are currently running at 23 per cent of the total, where historically they have been about 5 per cent.

The industry acknowledges that New Zealand must aim for the premium end of the market because it cannot compete on price or volume.

In the year to June, New Zealand exported 113 million litres of wine - 91.5 million of that was sauvignon blanc and 6.2 million pinot noir.

A mere 1.9 million litres was merlot, 1 million was cabernet or merlot blend, syrah accounted for 155,000 litres, and just 14,000 litres of cabernet sauvignon left our shores.

More than one-third of Hawkes Bay's wines are cabernet/merlot blends, so there is a huge export opportunity there if it can convince the world that New Zealand's name is also associated with good, fuller bodied reds.

John Hancock, CEO of Trinity Hill, near Hastings, says New Zealand still has an "ordinary" reputation for reds. "[That's] not the case any more. We really have to work very hard to remove that view."

For the first time Hawkes Bay marketed itself jointly overseas in September at the New Zealand Winegrowers Spring New Release Tastings in Sydney, Brisbane and Melbourne

With the help of New Zealand Trade and Enterprise funding, Hawkes Bay Winegrowers executive officer Lyn Bevin presented a group of 10 Hawkes Bay reds at the events - three merlots, three syrahs and four Bordeaux blends.

The body plans to follow this up by presenting Hawkes Bay as a regional story at the New Zealand in a Glass 2010 events in Melbourne, Sydney and Brisbane in February.

A third move will be to add Melbourne and Sydney to the itinerary for its Hot Red Hawkes Bay expo held each year in Auckland, Wellington and the South Island.

Why hadn't this been done before?

As one of the first wine regions in the country Hawkes Bay had a great deal invested in the domestic market, Hawkes Bay Winegrowers chairman Rod McDonald says.

"We have been slow to get into the export market."

In the past few years there has been a general recognition that the New Zealand wine story needs to have credibility beyond sauvignon blanc, and proving that we can do things across the spectrum creates depth, he says. "By telling these regional stories ... we're going to raise our profile as a serious player, as a wine producing country."

McDonald is also CEO and chief winemaker at Matariki Wines, a member of the Gimblett Gravels Winegrowers Association, which has been working to put its 800ha appellation west of Hastings on the world map.

It has run a series of blind tastings pitting Gimblett Gravels blends against the best of Bordeaux, with astonishing results.

At the event in London in February, top wine commentators ranked two Gimblett Gravels wines in the top six - the 2006 Sacred Hill Helmsman and Newton Forrest Cornerstone, $50 and $42 a bottle respectively.

This was alongside the likes of Chateau Lafite Rothschild, at $2715 a bottle, and Chateau Mouton Rothschild, $1880.

At a similar event in San Francisco held by Gimblett Gravels member Craggy Range, US wine critics ranked five of the Kiwi wines in the top six.

The wine writers may have been surprised by the results but did not consider themselves hoodwinked.

Michael Schuster, writer for Britain's Decanter magazine, who took part in the London tasting, says these sorts of events are "useful and interesting" but are designed to create headlines rather than an opportunity to detect the subtle differences.

"By themselves I don't think they can support the proposition that the best Gimblett Gravels can claim to rival the best of Bordeaux."

The Gimblett Gravels members were aiming to make a point, he says, which they achieved.

The trick now is to build on that point.

Nicholas Buck, sales and marketing director for Te Mata Estate in nearby Havelock North, says a lot of the most serious international press commentary about New Zealand wines has come in the last couple of years, and only now is there recognition that certain regions in the country are home to certain wine styles.

And that's not surprising, he says. Fuller-bodied reds take time in every regard - they are slow in the vineyard, slow in the winemaking process, and then people cellar them for five to 10 years.

But "finally the message about quality is starting to percolate through".

Te Mata and Craggy Range are two of the wineries involved in a project to promote selected New Zealand wines at the "ultra premium" end of the American wine market.

Americans do not currently see New Zealand as a producer of high-end wines, and the project aims to change that by marketing the best of our best to top restaurants, hotels, retailers and wine critics.

It has received government funding, allowing it to go further than industry body New Zealand Winegrowers would have been able to.

American-New Zealander Mike Spratt owns Destiny Bay Vineyards on Waiheke Island and is chairman of the Waiheke Island Winegrowers Association, which is marketing itself in a similar way to the Gimblett Gravels group.

He has voiced strong feelings about the positioning of New Zealand wine, saying the industry is "not over-producing, it is under-marketing".

He points out that the export price per litre for our wine has not risen in a decade - in June it was $8.80 a litre, a similar level to June 2000, although New Zealand Winegrowers says the figure has been affected recently by the high New Zealand dollar.

Nevertheless, Spratt believes the dumping of surplus stock has been disastrous.

The only salvation will be small, artesan producers, he says.

"They're not going to be tied to New Zealand because the New Zealand brand is tarnished in terms of its reputation as a premium brand."

RIPE FOR MORE HOMAGE

What you need is a top Hollywood director to take a shine to your wine.

Steven Spielberg, left, who collaborated on the upcoming Tintin movie with New Zealand director Peter Jackson, developed a taste for Trinity Hill Homage syrah while in New Zealand.

So much so that he has pre-ordered five cases of the next vintage, Trinity chief executive John Hancock says.

As a result distributors in the United States are reporting increased interest in the Homage range, which costs about $120.

It's this kind of profile that helps in the process of chipping away at a market, Hancock says. "At the end of the day it's about getting glasses in people's hands."

WHAT THE CRITICS SAY

Michael Schuster, wine writer for the UK's Decanter magazine, says he could tell the Bordeaux wines in the London blind tasting because of their "overall completeness", not because the Hawkes Bay Gimblett Gravels wines were very different.

He says the New Zealand wines had the telltale signs of coming from younger vines - "a comparative lack of mid-palate density of texture and complexity, followed by finishes that were less persistent, and less resonantly rich in flavour and aroma".

But their performance is remarkable "considering that the youngest vines in the clarets are probably 30 years of age, whereas the oldest Gimblett vines are a bare 13", he says.

And given their relative prices the Gimbletts are great value for money.

Harvey Steiman, San Francisco-based editor-at-large for Wine Spectator, says for Americans who are aware New Zealand makes red wine, pinot noir is it.

When it comes to Bordeaux-style blends, California is the prime competitor to Bordeaux, he told the Business Herald. "Everything else is competing against them."

That is what New Zealand is up against, "especially since [it] is so strongly identified with sauvignon blanc and pinot noir".

"Add to that the difficulty in making cabernet and merlot in Hawkes Bay that doesn't taste too green to American palates, and it's a struggle."

Steiman believes Hawkes Bay can be more successful in the US with its distinctive peppery style of syrah, but volume will be a problem.