Member in Focus
How New Zealand is driving its premium, quality message around the world
By Richard Siddle
VINEX talks to Chris Yorke, global marketing director for New Zealand Winegrowers, on a strategy that has brought brand owners, wine producers and growers together for mutual success.
In all walks of business there are those companies, businesses and brands that are forever seemingly out on a full on PR drive, maximising any opportunity to get a plug here, or a mention there. The business version of turning up to the opening of an envelope.
Then there are those organisations that quietly get on with doing what they know is right, and rack up just as much, if not more success, but in a lot more subtle, dignified and respected way.
Which very much describes the approach that New Zealand, and in particular its trade association, New Zealand Winegrowers, takes. It is very much in keeping with the quality and style of wine it makes. Just a little bit more quality, a little more class, a wine producing country that is operating, mostly, just a little higher up the price ladder of the international wine market.
It is a strategy that is more than working. Over the last 20 years the New Zealand wine industry has achieved average annual export growth of 17% a year, according to the New Zealand Winegrowers annual report.
It has long had a target to NZ$2 billion of exports by 2020 and is well on track to do so with a record performance in the year to June 2017, with exports now at NZ$1.66 billion, up 6%.
What makes New Zealand’s performance even more impressive is that it is achieving those sales at the more premium price points, and is increasingly able to show that it can go almost toe to toe with France and Italy, two of the oldest and most established wine nations in the world, on value sales in most of its key export markets.
Chris Yorke, New Zealand Winegrowers global marketing director, told VINEX it is only too aware that if it is to continue to drive such value growth, then it is critical it maintains and builds on its reputation as a country that produces quality, relevant and in demand wines.
Booming US sales
It is a position that has seen it enjoy considerable success in what is now a key market for its wines, the United States and Canada. In fact the US has been its strongest growing export country, with sales now through the NZ$500m barrier, up 12% year-on-year, and accounts for 30% of all exports by value. It now sits behind only France and Italy in value sales.
“We have doubled our sales in the US over the last five years,” said Yorke. “It’s been quite phenomenal growth.”
The challenge, though, he added, is distribution and being able to really crack the three-tier system.
But the consumer response in the US to New Zealand has been very encouraging. “It’s driven by Sauvignon Blanc. The US wine drinker really seems to understand our messages around Sauvignon Blanc. We can then work Pinot Noir on the back of that,” he explained.
Its success in the US has been similar to what it has achieved in the UK, added Yorke, where it was initially the bigger brands that helped provide a platform for New Zealand in general, on which smaller producers have been able to build on. Effectively New Zealand Sauvignon Blanc has now become the brand, he stressed.
“It is the consistency and quality of New Zealand wine that US consumers trust, even if they don’t recognise the winery or producer,” said Yorke. He felt the US was ready for what he called a “second wave” of activity and success for New Zealand where both brands and smaller producers can widen their distribution and reach across more states.
The bulk of its sales currently lie in California, Texas, Florida and the Eastern Seaboard.
“There is still a move in the US from beers and spirits to wine where New Zealand can really benefit.”
Whilst Australia, its closest wine competitor, can only recently boast about signing a Free Trade Agreement with China, New Zealand can claim to be the first developed country in the world to do so back in 2008.
It means New Zealand is arguably further down the line than other countries in maximising its position in China, particularly in appealing and talking to younger wine drinkers, claimed Yorke.
He said New Zealand’s reputation for quality, but slightly premium wines, played well with the growing 25 years and above professional wine drinker. This is the new generation of engaged wine lovers who are not buying wine simply to show off to their friends and peers, or for gifting, like older, more traditional Chinese wine drinkers.
Instead they want to buy wine to drink and to share with their like minded friends. “The 25 plus age group are buying wines for how they taste, that’s been a big shift in recent years,” he said.
It means it is better placed to be more adventurous with its promotional work in China. For example, it recently ran a women only wine tasting, to tap in to the big professional female working community, that have good disposable incomes to spend on products such as wine. “It worked really well and we were able to create what was seen as an awesome event,” said Yorke.
New Zealand Sauvignon Blanc is also being recognised as an ideal partner for Chinese cuisine, particularly in key regions in the south and coastal cities.
“It’s why we very much see China not as a dumping ground for wine, but where we want to target our premium wines,” added Yorke.
UK is still key
Despite its success in the US, the UK still accounts for more wine exported by volume, with 74 million litres in the year to June 2017. Its value sales, though, are smaller at NZ$389m. Bulk wine also has a bigger share of voice in the UK market.
The UK, not helped by a weaker pound, saw its export values rise by just 2%, despite strong volume growth of 27% up to June 2017.
To the future
For all its current success there is also very much a firm focus on where New Zealand needs to be going over the next 10, 20, 30 years and beyond, stressed Yorke.
“We only have 0.1% of the world’s wine production, yet, we know Marlborough is almost full in terms of planting any more vines,” he explained.
“So we are looking very closely at how we manage that. It is why we do so much work in hosting annual summits on Sauvignon Blanc and Pinot Noir. We need to promote all our regions to the world.”
He pointed to all the work being done around vineyard management and how producers can work together to better understand how they get the maximum return from a vineyard.
“Over the next five to 10 years we will see a lot of changes in New Zealand. We are in no way resting our laurels. It is not in our nature. We are always looking at how we can do things better rather than look back on what we have achieved.”