We talk to Craig Howard from Marlborough Grape Producers Cooperative in New Zealand
We get the chance to talk to key wine producers around the world and this time we turn to New Zealand and Craig Howard, general manager of the Marlborough Grape Producers Cooperative. We discuss the 2017 vintage and what opportunities there are for New Zealand wine in the global wine marketplace.
How was the 2017 harvest for you in terms of the overall crop?
The official data suggests the wider New Zealand harvest was down around 9% on last year and that is about what we seen in our members’ vineyards. However, we have picked enough fruit to fill our order book, which is nice. In the market, we are seeing good demand for 2017 wine, but as the Cooperative mostly pre-sells each vintage, variances don’t have much of an impact on our business overall. It was a similar position for us in 2016.
What are the big opportunities do you think for NZ in export markets?
The US has been going well for most New Zealand wine companies, potentially at the expense of more traditional markets in the Europe and the UK. We think a trend is starting where the UK is waking up to this fact and is looking to secure consistent supply before it gets moved away from them. Everyone needs to remember that there is not a lot more Marlborough land that is suitable for grapes. Most sub-regions are already fully planted and supply of wine is likely to become more limited in the future, if demand continues to rise.
What are the big challenges you face?
As primary producers, we have to accept what nature provides us on a yearly basis. That's probably a bigger issue to manage, than global challenges that are truly outside our control. Examples of this include Brexit and other world political events that impact on people’s discretionary spend and their ability to buy wine.
How do you see price points in the year ahead - how is currency affecting you?
Asking prices for wine from the 2017 vintage seem to have started out higher than last year, but as most of our wine is already pre-sold, none of this is having much of an impact on our business. Currency is something of a challenge but we hedge a portion and get paid in $NZ for the rest, so hopefully we come out the end of the sales year without too much downside.
What are your key export markets and why?
We have an excellent partner in The Wine Group from California in the US and have been working with them for a few years now. This is a natural fit between their need for large scale, quality, Marlborough Sauvignon Blanc and the Cooperative’s ability to deliver it. We are also developing some new business in Australasia and that is looking promising.
Which countries would you like to do more business in and why?
Ideally we want a geographical spread of buyers to limit risk. Buyers who see value in custom made blends delivered from the vineyard directly to them. We are still looking for the right relationships in the UK and Europe and are following up with some promising leads. After this we will be looking more into Asia where we see some good opportunities for the Cooperative to do business.
What wine are you seeing the most demand for?
Quality Marlborough Sauvignon Blanc seems to remain in demand. The flavour and aromas in the wines from our region seem very hard to match in other wine growing regions of New Zealand and overseas.
How do you see the mix/ratio of varietals grown changing in the years to come?
I don’t think its going to change much in the short to medium term. We have some local producers making some excellent Pinot Gris, Pinot Noir, Chardonnay etc, but the focus remains on Sauvignon Blanc
Is NZ in danger of being seen as a one trick pony with Sauvignon Blanc?
We hear this a lot, but it’s not a bad pony to own. Champagne could also be considered a one trick pony but look at what they are able to achieve price point wise year after year for their growers. The key is to maintain excellent quality and give consumers what they want.
How is bulk wine perceived in New Zealand? It is a good positive way of doing business?
There is mixed feelings about bulk wine within the local industry. The Cooperative is not bothered by any of this as we don’t consider ourselves producers of bulk wine. Our business makes large scale blends of wine for supermarket and distributor buyers-own-brand programs. These wines are customised to what the buyer wants and then shipped in bulk, purely for economic reasons, although it’s also good for the carbon footprint.
Can you explain more?
In most instances in Marlborough, ‘bulk’ is what is left over after a branded company has picked off the best blends from a particular vintage for their labelled bottles and has some wine left over. In a big production year this means more is available than a short year. It’s the most logical way to get rid of the excess, but I imagine it’s hard for buyers to build in-house brands and customer loyalty with year by year variances and mixed quality.
What developments in technology are helping with your wine making and grape growing?
We have outstanding research being done by New Zealand Winegrowers, but we need to be much more pro-active turning the results of this research into tools our growers can use. A good model for this would be the Extension Services offered to growers in the US. I spent some time many years ago working in this area and would like to see this concept in New Zealand. To start this process within the Cooperative, we have recently added a new viticulturist to our team. His mandate is to develop a technology transfer program that aims to put the latest research in the hands of our members. We are also looking at bringing new tools such as drones, computer apps, fertilizer application technology etc into the mix as well.
Looking ahead to five years where you would like your business to be?
Ideally we are working with five to six large buyers in five to six different markets, providing custom made quality buyers-own-brand Marlborough Sauvignon Blanc.
Where do you think the NZ wine industry will be in five years?
We have some excellent passionate people working in our industry. Ideally this continues and our industry become a place the next generation of winemakers and viticulturists want to be.
What keeps you awake at night?
We take the responsibility of running a Cooperative very seriously. Paying our members and owners on time every time is the key to what we do. They are part of our family and the last thing we want to do is let them down.
What do you outside of winemaking? Any favourite hobbies or sport?
Golf is a favourite pastime of the whole team. It’s a pity the skill-set doesn’t match the enthusiasm for the sport!
Please contact the VINEX regional manager for New Zealand for more information on the market and to discuss how VINEX can assist you: