While Covid-19, geopolitical tensions and rising tariffs are weighing heavily on wine exports in most key exporting regions across the globe, New Zealand wine exports continue to perform strongly, according to a new Rabobank report.
In its Q4 Wine Quarterly report, Rabobank said global demand for New Zealand wine continued to rise.
"In the eight months to August 2020, we've seen really strong growth in New Zealand wine exports with the volume of exports increasing by 10.7 per cent and the value by 9.7 per cent in comparison to the same period last year," Rabobank wine analyst Hayden Higgins said.
New Zealand producers had benefitted from increased home wine consumption, driving strong retail demand in key markets, Higgins said.
"The rise in home wine consumption as a result of Covid-19 is supporting an increase in bulk wine exports, particularly to the UK and Europe."
This trend towards bulk wine purchases had also benefitted New Zealand in the US, Higgins said.
"[The US is] our largest market for wine exports - with sales of Kiwi wines to the US increasing by 20 per cent by value and eight per cent by volume during the first half of the year."
Sauvignon blanc sales continued to make up the lion's share of New Zealand's wine exports, Higgins said.
"To August 2020, sauvignon blanc exports were 261 million litres - up 13 per cent year-on-year, and making up 88 per cent of total exports.
Exports of the 2020 sauvignon blanc vintage were also running ahead of the same time in 2019, with shipments of this year's vintage commencing in May 2020, Higgins said.
Global export trends
New Zealand's wine export growth was particularly notable given the Covid-19 environment, which had seen lower volume and value export sales among many of the world's major wine-exporting countries, Higgins said.
Listen to Jamie Mackay interview Hayden Higgins on The Country below:
"The pandemic has created massive challenges for the wine industry, mainly due to the difficulties facing the on-premise channel – with a significant reduction in consumption in restaurant and hospitality venues due to the coronavirus pandemic – and, for many wine exporters across the globe, sales momentum established in recent years in key markets such as the US and China has stalled or even reversed."
Other than New Zealand, Argentina was one of the few major wine-exporting nations that has increased the volume of wine export sales in 2020, Higgins said.
However, Argentina's sizeable increase in wine sales volumes - up 48 per cent for the period Jan to July 2020 - had been achieved at a drastically-lower average per litre price, and the value of its export sales over the same period had actually fallen by two per cent, Higgins said.
