Taking the pulse of the New Zealand wine consumer

Despite a drop in export shipment performance, New Zealand wine continued to grow and "significantly" outperform the wine category at point-of-sale in both value and volume in its top two markets - the United States and United Kingdom - last year, says New Zealand Winegrowers (NZW) Intel and Insights expert Richard Lee.

Speaking in a February NZW webinar on brand health, Richard dissected results of the 2023 IWSR consumer research on the category health of New Zealand Wine from a consumer perspective, commissioned by NZW and conducted in the US, UK, Australia, and New Zealand markets in late 2023. In introducing the webinar, NZW General Manager Brand, Charlotte Read, noted that the “treasure trove” of data behind the report and webinar showed that while exports have declined as a result of supply chains stabilising, “we do not have a problem at the consumer level”.

In the US market, scan data from early February shows New Zealand Wine is “very much in positive territory” up 7.1% in value growth over the last 12 months, “strongly ahead of the total wine market” which was down half a percent, Richard says. In the past quarter, including the Christmas trade, New Zealand wine remained “very strong”, up 6% in value terms, against a -0.5% change in the market. In terms of volume, New Zealand wine was up 3.5% for the year, while the category was down 4.3%.

Meanwhile there’s a good story around brand health, including the conversion of ‘potential buyers’ to ‘loyal buyers’, lifting the latter from 31% to 36% between 2022 and 2023. There’s an enormous reservoir of ‘potential buyers’, with that 30% – who had not yet bought New Zealand wine but were aware of and remained open to purchasing it – equating to 26 million regular wine drinkers in America. “That’s a significant number in terms of potential growth down the track,” Richard says, noting the additional potential of the 19% of regular wine drinkers as yet unaware of New Zealand wine. “New Zealand wine has done very well in the US. But the exciting thing for me is that we are not done yet. There’s an awful lot of potential for future growth in this market according to these numbers.” There’s also a shift in the New Zealand wine buyer profile, skewing younger with a significant increase in LDA (legal drinking age) to 34-year-olds (23% to 33%). And there’s a larger proportion (20% to 24%) of the ‘Generation Treaters’, a younger consumer segment, mainly Millennials, who are more frequent and adventurous wine drinkers, Richard says. According to IWSR, ‘Generation Treaters’ account for around one in 10 ‘Regular Wine Drinkers’ in the US and, more importantly, around $1 in $5 of wine spend. “Younger consumers will be the ‘breadwinners of tomorrow’, replacing ‘baby boomers’ as a key success factor in the future growth of New Zealand wine,” he says.

Scan data from the UK also shows a sector in good health, with New Zealand wine continuing to track well ahead of the UK wine market on value and volume growth rates, on both an MAT and quarterly basis, versus 2022. However, like the US, the quarterly growth rates tracked slightly behind the year-long performance. Value growth for New Zealand wine was 8.8% compared to 2.7% in the market at large, and in the past quarter was 7.6%, compared to 4.1%. In terms of volume growth, the 12-month period saw growth of 6.5% compared to the market at -2.7%, with the past quarter up 2.3%, compared to the market at -3.9%. “This is a very positive result in what is a significant market for us,” Richard says. “In terms of wallet behaviour, there’s no sign of New Zealand wine falling off a cliff.” In the UK market, ‘From a place I trust’ was one of the top three associations for New Zealand wine, up significantly on the previous year.

Sales in Australia and New Zealand were comparatively less buoyant, with scan data from Australia showing value growth of 1%, compared to the market’s -0.8%, while volume growth was slightly below the category, at -1.7% compared to -1.2%. “But again it’s not a train smash,” Richard says. In New Zealand, Australia made gains of 5.7% in value while growth of domestic wines declined by 0.7%, compared to a modest 0.4% value growth gain for the category. Despite that drop, New Zealand wine’s market share and brand health remained strong, with the three top brand image associations of taste, trust and brand remaining stable, “which is good”. In both Australia and New Zealand there was a slight shift in demographic profile, with an increase in the proportion of female drinkers.

Richard says a consistent theme across the markets is that New Zealand has a very strong association with sustainability. At this stage that’s a “hygiene” factor in wine purchasing decisions, falling below many other motivations, but he expects that to change over time. In the New Zealand market sustainability jumped as a buying trigger between 2022 and 2023, which may reflect the influence of Cyclone Gabrielle. “My hypothesis is that as climate change becomes much more front and centre in people’s everyday lives, I would expect sustainability and environmental factors to become far more important as a driver of sales.”

Richard says the 148-page report, along with the data rich excel sheets behind it, is an invaluable resource for wine companies wanting to understand markets, consumers, and varietal trends. “This resource should be your first stop.”

Find Unlocking Insights; Taking the Pulse of the New Zealand Wine Consumer on the members section of nzwine.com