Fran O'Sullivan and Alexander Speirs: Wine industry booms again

New vines have been mostly limited to Marlborough. Photo / File

The New Zealand wine industry is firmly on the rebound after a torrid period following the Global Financial Crisis, where winegrowers' returns plummeted despite an overall growth in export volumes.

Wine exports reached record highs again last month, earning almost $1.4 billion for the calendar year - an 8.2 per cent increase from 2013.

Crowe Horwarth's resident wine expert, Alistair King, says that strong performances aren't just limited to the international market. "The domestic market is also improving a lot, and for wineries over the October, November, December period which has just passed, they've put up some of the strongest sales seen for a number of years. That will lead to some growth in jobs, but we're more likely to see that translate to higher salaries paid.

"We have seen an increase in planting as well, particularly around the Marlborough region - but nationally, there hasn't been a massive uptake in further planting to grow jobs. What we've really seen is more consolidation of vineyards and wine businesses, making for stronger businesses going forward."

Collaboration and consolidation stand to be significant factors as New Zealand winegrowers seek to diversify their export portfolios - particularly with change afoot in our largest wine export market.

Australia has been the major focus for New Zealand wine over the past decade, with exports growing from $122.4 million in 2006 to $380.9 million in 2014.

During that period, exporters have had access to a tax-rebate scheme that the Australian Government is looking to abolish. Coupled with the fall of the Australian dollar and a general cooling down of their economy, this makes for tougher exporting conditions.

Despite that, New Zealand Winegrowers CEO Philip Gregan remains bullish about our long-term prospects in Australia.

"I don't think that the rebate is the reason why we've been successful in Australia," says Gregan. "Our companies have benefited certainly, but I don't believe that the changes to the tax rebate will fundamentally alter our success in Australia at all.

"Australia has been an astonishing success for New Zealand wine over the last 10 years or so. The reason for our success in Australia has been that our wines appeal to Australian consumers and we don't expect that to change."

With a steady-as-she-goes approach prescribed for Australia, attention is also turning to North America as the United States continues to grow as a prime wine export market.

In 2014, wine exports to the United States grew 16 per cent to $328 million - surpassing the United Kingdom, this year at $318 million, as the second largest market for New Zealand wine.

"It's a very competitive market and we've got to continue to build. It's a big, challenging market spread and alcohol products are highly regulated within the market," said Gregan.

The key to unlocking further value in the United States - which stands to potentially become the largest market for New Zealand wine - is continuing to invest in a strong base for marketing and sales, and improving brand recognition and reputation.

"We need to really push New Zealand as being one of the premiere places for producing wine around the world, because simply, there are worldwide consumers prepared to pay a premium price for these products," says King.

Driving that message home will take a consolidated effort from both industry and government, with King hoping to see one New Zealand brand exported to the world.

"It's not only about NZTE, but about Tourism NZ as well. It's a combination of the different sectors that make New Zealand up pushing that message hard overseas."