The globalisation of the wine industry has been a huge advantage for wine producers in New Zealand. Twenty years ago wine producers in New Zealand were rather isolated from the global market, and it wasn’t as popular to find international wines in our local supermarkets. This was common in the ‘New World’ wine producing countries. Although ‘Old World’ countries still dominate in terms of production, it has become far more accessible for smaller wine producing countries to export their wine, and also to ‘make a name for themselves’. ‘New world’ wine producing countries are also faster to adapt to changing trends in the wine-industry. In order for wine producers in New Zealand to be successful they need to “master the tastes of the global market” as consumption of wine in our local market is decreasing.
OIV ‘State of the World’ report
On the 22nd of April 2020 the OIV ( International Organisation of Vine and Wine) released their annual ‘State of the World’ wine sector report.
• The surface area of the world vineyard is estimated at 7.4 mha, stable since 2016
• World wine production is estimated at 260 mhl, a marked decrease, compared to the historically high 2018 production
• World wine consumption is estimated at 244 mhl, marking a +0.1% with respect to the previous year
• The world wine export market has expanded both in volume, estimated at 105.8 mhl (+1.7%), and in value with 31.8 bn EUR (+0.9%)
• First estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 (exception for South Africa and Uruguay)(OIV. April, 2020.)
World Wine Production
The OIV statistics show that the world wine production is down 12% from 2018 (see image). However, it should be noted that the figures of 2018 were a historical high, being the biggest harvest since 2004. The 2019 numbers bring global production back to average levels. Global wine production can vary quite a bit, mainly due to various weather conditions that effect wine production. In a longer perspective, wine production is stable.
Major Wine Producers
The major wine producers remain the same, with the three biggest wine producers being Italy, France and Spain. These countries also had a significant increase in production compared to 2017. This could be due to ideal harvest conditions, and as mentioned the global wine production reached a historical high in 2018.
Impact of Covid-19 in the wine sector
The annual report by the OIV for 2019 was released in April, therefore we will have to wait for more statistical data before it becomes clear how much of an effect Covid-19 has had on the global wine sector.
The OIV expect that there will be an overall decrease in average prices and also a decrease in consumption. Because of this, an overall decrease in profits for the wineries. With the largest consuming countries having been most effected by the pandemic the forecasts do not look good.
We heard during our visits to both Indevin and Wineworks that the export of wine has become far more difficult. This is a global problem but is more pronounced in New Zealand as we are reliant on our export market. These problems with trade, along with the economic recession, may take a while to recover.
As of June 2020 and despite the challenges of the past 12 months, the New Zealand wine industry recorded its 25th consecutive year of export growth(NZ Wine, n.d.)
Summary of New Zealand Wine
- There has not been any dramatic shifts (increasing or decreasing) from 2019 to 2020 in any of the statistical data.
- The producing area has increased by 5,435 hectares from 2011-2020.
- Both export values and export volumes have been steadily increasing since 2011
- It can be noted that consumption and domestic sales of NZ wine is trending down-wards, this could be due to the emergence of craft beers, and other trendy alcoholic beverages competing with the wine market.