Declining alcohol consumption hitting New Zealand wine sector
The impact of the declining consumption of alcohol amongst young people is already making itself felt on the New Zealand wine industry, with two wineries recently going into receivership.
Author and wine critic Michael Cooper claims that young people are drinking less or giving up altogether unlike the over 60’s whose consumption is increasing.
Per capita consumption of wine in New Zealand has dropped from 21.5 litres per year in 2009 to 19.2 litres. And the fall in local consumption of New Zealand wine is even steeper, from 13.9 litres per capita in 2009 to only 10 litres per capita in 2018, points out Cooper.
With Vinoptima in Gisborne and Mahana in Nelson, recently going out of business, Cooper believes this is just the thin edge of the wedge. And another threat on the horizon is the legalisation of marijuana which may see some wine consumers viewing it as a substitute.
While local consumption is declining, New Zealand wine exports are increasing in volume and value with growing consumption in China and Russia. But while the overall export value is up, the average value per litre has fallen from $8.85 per litre in 2009 to $6.68 per litre in 2018.
And while the UK is a key market for New Zealand, nearly a third of British consumers (30% of 16 to 25 year olds) avoided all alcoholic beverages, including wine.
Wine is now New Zealand's fifth most valuable export commodity and is on track to generate $2 billion per year in export receipts by 2020, fuelled largely by American demand for Sauvignon Blanc.
"Many small wineries were established during the 1990s by affluent baby boomers, then aged in their 40s," Cooper told Stuff. "Now they are in their mid-late 60s and keen to sell up. The number of wineries in New Zealand peaked six years ago and the industry is facing more and more consolidation. Some of these small wine companies simply close down. Others are acquired by the biggest companies, which are often overseas-owned."