Vintage 2024: Marlborough
"I'm just kind of pinching myself that the weather is so good," says Pernod Ricard's New Zealand Group Winemaker Jamie Marfell, as he approaches what will likely be his first Easter off in 34 years.
You've said the word 'surplus' has no place in Marlborough wine. Why?
New Zealand's Sauvignon Blanc story is a textbook example of the ups and downs that happen with exponential growth in a new industry. Despite a seemingly insatiable demand from our export market, we are tormented internally by negative sentiment around markets turning sour and oversupply. From September to December 2022, we exported 126 million litres of wine, annualising to 175% of average production over the previous decade. This was due to our export markets lifting in market inventories, so they did not run out because of Covid-impacted shipping. These record shipments lifted exports to an all-time high of $2.4 billion for the year ended June 2023. That cannot be matched in the near term because we do not grow enough. From September to December 2023 the year-on-year comparisons shown in New Zealand Winegrowers (NZW) export report showed reductions of 25%, as 'in market inventories' corrected to 'just-in-time'. Although inevitable, these reductions were interpreted by most of our winegrowers as a sign that our markets were tanking and we would move into oversupply. This thinking did result in a collapse of bulk wine pricing.
As a student of wine, particularly Sauvignon Blanc, my forecast back then was one of a shortage emerging prior to vintage 2025 following a low 2024 harvest. Global sales momentum continues to lift demand. We do not have the land to increase supply as we have in the past. Last November I shared my thought in a paper considering our long-term average production, seasonal swings in supply, and continuing growth in value per litre.
Most growers will be aware of this season's slow growth due to a cold dry spring. Poor flowering, continuing dry, and a far from ideal berry cell division has worsened the outlook. As a grower of Marlborough Sauvignon Blanc, I lowered my already low expectations for vintage 2024 based on yield estimates. I now expect a national vintage of 230 million litres, 22.5% down on 2023. This, together with what is left in tanks for 2023, will not be enough to maintain exports over the 18 months from January 2024 at the rate we have exported during the 18 months to December 2023. Export market demand for our wine has moved beyond our ability to produce. I am surprised that more people in our industry have not realised this and do not seem to understand just how much wine they need in tanks to maintain their current supply.
How are companies responding to market shifts?
Many people interpreted the wine export data to mean that export markets had shifted negatively. In fact the reason our export markets bought forward and upped their inventories is because they value our product so highly. It's a fair bet that the markets did not buy Australian Shiraz or Italian Prosecco forward like they did New Zealand Sauvignon Blanc. Back here some panicked at what was they thought was bad news. The bulk price collapsed. Some companies have clearly used the negativity to lower their grape pricing, while other companies understand the need for supply and have maintained reasonably stable grape pricing. The polarity of grape pricing this year is astonishingly wide.
What's the outlook as you see it?
The outlook is great for New Zealand wine as a whole and we now see Sauvignon Blanc lifting interest in other varieties from New Zealand. However, we have to be careful about starving the market for a period when we run out of Sauvignon Blanc, before vintage 2025 comes on stream. The outlook for individual companies is varied. We will not have enough Sauvignon Blanc for them all to execute their market ambitions. Nearly half of our Sauvignon Blanc supply is through growers, and it is clear to me that loyalties are being tested.
What's the secret to Marlborough Sauvingon's success?
Globalisation allows anyone, anywhere, to drink what they like in the glass, rather than what has been grown for centuries in local vineyards. Marlborough Sauvignon Blanc is not a short-term trend. It is part of a global change in drinking preference that has been 50 years in the making, and one where our offering excels. NZW's recent Market Pulse webinar hit the nail on the head - people are drinking our Sauvignon Blanc because they like the taste and see it as great for every occasion. What Oz Clarke said so long ago still stands today: "There had never before been a wine that crackled and spit its flavours at you from the glass."
To read more of Paul's analysis on export data and sales trends, email him at This email address is being protected from spambots. You need JavaScript enabled to view it.
