OCTOBER 2026
M A R L B O RO U G H S U P P LY T R E N D S & N Z W I N E I N D U S T RY OV E RV I E W
JOHN WILSON +64 27 837 3420 | john.wilson@jpew.co.nz | www.jpew.co.nz
U N D E R S TA N D I N G T H E C U R R E N T L A N D S C A PE The purpose of this commentary is to share insights on global demand, supply from Marlborough, Sauvignon Blanc carryover inventory levels, and surplus\deficit positions. Over the last 6 years the trading landscape for NZ wine has undergone structural changes due to many factors that are often interrelated. They include consumer consumption, customer purchasing patterns, regulation and compliance, and agricultural variability. All within a period of high inflation (domestic and key export markets) that has placed pressure on cashflow and profit margins. Managing the volatility and uncertainty within this changing landscape becomes complex in an agri-based industry, with long lead times, and limited agility due to the annual supply intake. The inflationary impact on wine consumers, domestic and export customers, and New Zealand winegrower businesses is not to be underestimated and remains persistent (refer to appendix). The adverse inflationary impact on operating margins over this period has resulted in leadership, ownership, and strategy change from leading NZ wine businesses, this is expected to continue. This change in strategy includes future supply plans which have impacted grape growers throughout New Zealand. As an outcome of the strategy resets there are positive signs, particularly in the US wine market with consumer led strategies, resulting in premium NZ wine brands leading the dollar value growth within the retail wine category. Adding to the complexity, NZ wine businesses have become two or three tiered (not on size) depending on the ownership structures, product portfolio positioning, ability to leverage category trends, and management of working capital levels. Not all wine businesses face the same challenges. One constant throughout this change has been the wine consumers preference for white wines and lighter styles like the unique taste of New Zealand Sauvignon Blanc. Premium wine positioning in the future is important and dependent on quality wine and positive taste experiences with new and existing consumers.
KEY INSIGHTS: 1. To achieve a demand supply balance (equilibrium) the Marlborough V27 grape supply target is 315k tonnes (this is inline with V24) then increasing to 360k tonnes in V28. The V27 reset vintage is required due to the V25-26 surplus inventory levels that will be sold in F27-28. Alternatively, this supply target could be smoothed to a 338k tonne average in V27 and V28. 2. Since 2021, global sales volume of NZ wine has plateaued, with annual sales ranging between 307 to 356ml. In 2022 the decline in domestic sales of NZ wine has countered the export sales growth. The combined effect is a 0.8% compounding annual growth rate (CAGR) between 2021-2026. 3. The gap between export volume and value increases as value gains from packaged wine exports are eroded from the decline in value of bulk wine exports. Total export MAT value in August 2026 is $2.1b, -1.4% below a year ago and inline ($2.1b) with two years ago. Over the same two-year period export volume has grown from 274ml to 304ml, an increase of 11% or 30ml. This plateauing in revenue is illustrated by the diverging $ per litre rates between packaged and bulk wine exports. 4. The changing landscape of grape production is highlighted with the growth in Marlborough over the past decade. In V16 Marlborough contributed 74% of total NZ tonnes growing steadily to 81% in V26. This % is expected to increase in the future. 5. The Sauvignon Blanc surplus position in July 2026 is 76ml. The vintage mix of this surplus is V25 44ml and V26 32ml. This surplus is the additional inventory held in wineries above the 10% carryover inventory required in July 2027. This surplus recognises the 42ml carryover inventory from previous vintages up to V24 that was sold in F26-27. If profitable sales volume growth cannot be achieved to reduce the surplus, then reset vintage(s) are required to lower future supply to eventually achieve the demand supply balance (equilibrium). Note: MAT = Moving Annual Total. This is the sum of the last 12 months. CAGR = Compounding Annual Growth Rate is the year on year % growth between two periods . Carryover inventory = volume sold from July the year after vintage. Financial year (FY) is based on a 30th June year end.
M A R L B O RO U G H S U P P LY T R E N D S The V21-26 period averaged 359k tonnes from a wide range of vintage yields (minimum 270k to maximum 410k tons). This step change in supply (compared to V14-20) is a result of producing hectares increasing by +9% (+2,720 ha) combined with exceptional growing conditions in V22,23,V25 resulting record harvests. Growing conditions limited supply in V21 and V24. This also occurred in V25 and V26 for different reasons due to unharvested grapes and the introduction of lower yield caps and GSA terminations. V21-26 followed a relatively stable period between V14-20 where the average harvest was 307k tonnes from consistent yields across all vintages except for V15. Throughout this period demand was undersupplied resulting in grape price appreciation and investment in vineyard development (+4,901 producing hectares). We have introduced a vintage target for vintage 27 and 28, this includes all sub regions and grape varieties from Marlborough. It is demand led calculating the Marlborough supply required to achieve an equilibrium with demand. The balancing of supply with demand is important for price stability, improved operating cashflow, and profit delivery. As a historic marker the V27 target is marginally above V24. This reset vintage is required due to the V24-26 surplus inventory levels that will need to be sold in F27-28. Alternatively, a reset could be smoothed over V27-28 averaging 338k tons per vintage.
Source: NZWG annual reports (surveyed tons) and NZWG Vineyard Report (producing hectares), predictions for 2026-2028 within the NZWG Vineyard Report are based on data collected from NZW members in the 2025 Biosecurity Vineyard Register. Supply Target tonnes are from JPEW Advisory Ltd and are indicative only.
KEY POINTS: • Since V23 this step change has placed the wine industry in an oversupply position resulting in downward pressure on Sauvignon Blanc grape prices. • Producing hectares in V27-28 may not include vineyard removal and mothballing. Lower producing hectares in V27-28 would not change the supply tonnes target but would increase the target tonnes per hectare. • Focus is on Marlborough supply as it contributes to +80% of total NZ tonnes and 90% of total Sauvignon Blanc tonnes which also contributes 80% of total NZ tonnes.
N Z W I N E G LO B A L S A L E S T R E N D S Through multiple factors the demand landscape changed in 2021. Before this period NZ wine achieved consistent growth over many decades. Since 2021 NZ wine demand has plateaued, with annual sales ranging between 307 to 356ml. In 2022 the decline in domestic sales of NZ wine has countered future export sales growth. The combined effect is a 0.8% compounding growth rate (CAGR) between 2021-2026. Despite the levelling of sales volume between 2021-2026 there has been a high level of volatility which is illustrated in the moving annual trend (MAT) lines in the bottom chart. This volatility has arisen from multiple factors including demand surges, constrained supply, and over supply. This volatility and uncertainty has made it more difficult to predict the future which is challenging for an industry with long lead times, agricultural risk, and lower agility due to the annual harvest. Wine consumption trends continue to evolve as consumers moderate purchasing behaviour due to moderation (health and lifestyle) and economic pressure on purchasing power (affordability). A K-shaped dynamic is emerging with wine consumption as the “drink less but better” trend drives consumption in the premium end of the wine category (trading up) and price conscious consumers seek value at lower prices (trading down). This dynamic has created tiers within the NZ wine industry which are dependent on where each wine business is positioned to meet the evolving consumption trends.
The forecast in the chart above assumes FY27 volumes will remain at the same level as the previous year as the inventory surplus needs to be sold. The lower FY28 sales volume reflects less bulk wine exports sold as distressed sales.
Source: New Zealand Winegrowers reports: NZ Domestic Market Reports and NZ Wine Export Reports to July 2026. Forecasts are from JPEW Advisory Ltd
E X P O RT T R E N D S : T H E VO LU M E A N D VA LU E G A P Export MAT value in August 2026 is $2.1b, -1.4% below a year ago and inline ($2.1b) with two years ago. In the August 2024 – 2026 period the export MAT revenue ranged between $2.01 – $2.19b. Over the same period export volume has grown from 274ml to 304ml, an increase of 11% or 30ml. The weighting of packaging type (bulk and packaged) with export volumes has had an impact on the plateauing of export revenue. Export packaged volume is recovering to levels from two years ago with encouraging signs the recent growth will continue. From this volume trend packaged export revenues have grown from an appreciating $ per litre (refer to the next page). In contrast, all the export volume growth in the last two years has been from bulk wine, combined with a lower $ per litre, resulting in a bulk wine value decline. This dynamic has increased the gap between volume and value as the value growth in packaged wine is negated from the bulk wine performance. Note: export value is in NZD which incorporates gains from a declining NZD (refer to appendix)
Source: New Zealand Winegrowers : NZ Wine Export Reports.
Monitor The short-term export trend is a levelling of volume growth since October 2025. This combined with further lowering of the bulk $ per litre will place pressure on future total export revenue and increase the gap between volume and value.
Source: New Zealand Winegrowers : NZ Wine Export Reports.
E X P O RT R E V E N U E PE R L I T R E T R E N D S The export revenue per litre is monitored to understand the link between the export volume performance by packaging type and the respective $ per litre trends. The objective is to provide insight into how the total export revenue has plateaued in the last two years. This is becoming more relevant as the MAT bulk wine export volumes index above packaged wine export volumes off the back of the declining bulk wine $ per litre. If the bulk wine $ per litre continues to decline it will place pressure on the ability for the total export revenue hold at $2.1b. This could be under pressure in July –December 2026 as the remaining V25 Sauvignon Blanc surplus inventory is sold. In 2027 we expect an improvement in export value as packaged wine volume growth continues within a $10.40 - $10.60 per litre range. The bulk wine $ per litre is expected to improve throughout 2027 as the V25 and V26 surplus inventory positions are reduced. This view is dependent on the NZD remaining low (compared to key foreign currencies) and the V27 supply is managed to align with demand. The lower packaged $ per litre in recent months is worth monitoring to understand if the movement is from market mix and or reflective of the challenging trading environment.
Source: New Zealand Winegrowers : NZ Wine Export Reports.
G LO B A L M A R K E T M I X C O N T I N U E S TO E VO LV E The US market continues to be the lead export market resulting in the August 2026 MAT 96ML. Since the step change in demand from September 2021 the US market MAT has consistently ranged between 85-110ML. Ranked # 2: United Kingdom August 2026 MAT 81ML building back to levels achieved in April 2021. Ranked # 3: Australia August 2026 MAT 47ML is at the lowest level in six years partly due to performance of the domestic wine category and partly due to changes in bottling destinations for NZ wine. The domestic market for NZ wine sales volumes consistently ranks at # 4. Local consumer pride in NZ wine underpins the performance, illustrated by Sauvignon Blanc as the leading still bottle wine variety sold. Export Other markets include Canada, Germany, Ireland, Denmark, Netherlands, Sweden, South Korea, China, Japan, Singapore, and Hong Kong.
Source: New Zealand Winegrowers : NZ Wine Export Reports.
Source: New Zealand Winegrowers : NZ Wine Export Reports.
Since February 2024, Export Other volume growth (+30ml or +60%) has been from Canada (+6ml), China (+6ml), Germany (+6.5ml), South Korea (+3.3ml), Ireland (+1.4ml), and Other Countries (+5ml) The performance in Asia illustrates the benefits of developing distribution into new markets, primarily South Korea and China.
S AU V I G N O N B L A N C C A R RY OV E R A N D S U R P LU S P O S I T I O N S
Source: NZ Winegrower Domestic and Exports reports. NZ Wine Average Grape Price data. JPEW Advisory Ltd provides the forecasts highlighted in yellow.
We wanted to understand how much Sauvignon Blanc was sold from July the year after vintage (V25 carryover = the volume of V25 sold after July 2026). This is referred to as carryover inventory on the basis that a vintage is usually released in May - July the same year as vintage. Our approach was to calculate the Sauvignon Blanc export volumes sold as carryover inventory believing this sample size is large enough to build a picture.
Surplus management is based on the accumulated inventory position at a point in time. We calculate the inventory position at year end (30th June). Balance sheets within wine businesses hold multiple vintages of Sauvignon Blanc at year end, including previous vintages plus the current year vintage. To achieve equilibrium where supply aligns with profitable demand the working capital cycle standard we use is
1%:89%:10%. Meaning 1% of the vintage supply is sold in the financial year of the vintage, 89% of the vintage supply is sold in the financial year after vintage, and 10% of the supply (carryover inventory) is sold in the second financial year after vintage. Note this standard aims to reflect the NZ wine industry trends (covering all business models) not a specific wine business model. In reference to the table above if a “Carryover Inventory % of Total” is above 10% it is captured as a surplus.
The Sauvignon Blanc surplus position at the 1st July 2026 is 76ml. The vintage mix of this surplus is V25 44ml and V26 32ml. This surplus is the additional inventory held in NZ above the 10% carryover inventory required on 1st July 2027. This surplus recognises the 42ml carryover inventory from previous vintages up to V24 that were sold in F26-27.
The majority of the 75ml V25 Sauvignon Blanc carryover inventory will be sold in F27, this includes the 44ml V25 surplus. The impact of the V25 surplus is that less V26 Sauvignon Blanc is required in F27, which creates the V26 surplus on 1st July 2027. It assumes F27 global sales demand is maintained at 349ml. Hypothetically, if F27 global sales demand achieved 381ml, the additional 32ml in Sauvignon Blanc sales would reduce the V26 surplus to zero. The impact of the additional demand would be to increase the V27 Sauvignon Blanc supply forecast (above) by the same amount, from 236ml to 268ml. It illustrates the moving parts and lead times to achieve inventory equilibrium.
If profitable sales volume growth cannot be achieved to reduce the surplus, then reset vintage(s) are required to lower future supply to eventually achieve the demand supply balance (equilibrium). The industry has been managing surplus positions since V23. An equilibrium was almost achieved with V24 however the V25 supply compounded the surplus position. The lower V26 Sauvignon Blanc supply moved in the right direction but is 32ml too high. Wine businesses managing a challenging trading environment are adjusting their demand and supply forecasts to balance inventory, manage debt, improve cashflow positions, and increase profit margins.
A P PE N D I X
JOHN WILSON +64 27 837 3420 | john.wilson@jpew.co.nz | www.jpew.co.nz
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