NEW ZEALAND DRINKS

As one of Australia’s nearest and most beloved neighbours, New Zealand has always occupied a special place in our hearts and minds – and, it seems, our palates. With a stellar reputation already for wine, New Zealand has also become well known in the Australian market for its spirits, RTDs and cocktails (and beer, but that’s a topic for another piece).

It’s therefore interesting to explore just how well these alcohol-based products have been doing in the Australian market, and to see what trends might be emerging in the years to come.

There is certainly a timeliness to this, particularly for the New Zealand wine industry. According to research undertaken by New Zealand Winegrowers (NZW), the country’s national organisation for the grape and wine sector, the industry received quite a battering in 2021. This was due not only to COVID-19 but also a reduced harvest and lower export volumes, as well as domestic sales reaching their lowest levels for almost two decades. Fortunately, the 2022 harvest delivered, with strong export growth forecast for the coming year, particularly in North America, and domestic sales are expected to rebound.

NZW data has shown that Australia is the third largest importer of New Zealand wine, after the United States and United Kingdom. Unsurprisingly, the region of Marlborough and its favoured grape Sauvignon Blanc account for the greatest volume of wine made (76 per cent) and exported (86 per cent), in both cases at a rate 10 and 20 times more than the nearest contenders (Hawke’s Bay at 7.8 per cent, and Pinot Noir at four per cent) respectively.

“Since the beginning of the pandemic there has been a shift in white wine back to Marlborough Sauvignon Blanc, with consumers returning to brands/styles of wine they know and trust,” said Brand Ambassador for Giesen Wines, Dan Chorley.

Research by IRI MarketEdge showed that 69 per cent of all wine imported into Australia came from New Zealand, declining by only five per cent in the year ending 3 July 2022. In off-trade channels in Australia, New Zealand wine accounts for 10 per cent (by volume), with 58 per cent of this volume being priced at $15 or more, compared to 24 per cent for Australian-origin wine.

-Maurice Melis CEO Global Endeavours Australia

Spirits have also been performing well, although there is stiff competition for gin in a crowded market, according to Global Endeavours Group CEO, Maurice Melis.

“We’ve had steady growth in both our wine and spirits-based brands, particularly gins and vodkas. In saying that, we have noted what seems to be a maturing of the gin category after a few years of very solid growth,” said Melis.

Interestingly, figures from Stats NZ, New Zealand’s official data agency, show that of the total volume of alcohol produced in New Zealand (up to the end of 2021), beer fell 0.3 per cent, wine fell five per cent, while spirits rose 12 per cent.

The Australian drinks market sees robust competition across all price points from both domestic and overseas-based producers. Other than those from New Zealand, drinks from Spain, United States, Chile and Argentina are all also experiencing solid growth.

As the data above shows, Sauvignon Blanc is still the most popular grape variety in New Zealand, with IRI MarketEdge’s research showing that it accounted for 72 per cent of all wine imported into Australia from across the Tasman. This significantly dwarfs the next contenders: Pinot Gris at 10 per cent and Pinot Noir at five per cent, which both experienced declines.

New Zealand drinks, in particular, enjoy a strong profile in the Australian market for several specific reasons.

As Melis said: “New Zealand provenance holds brands in good stead in the Australian market, likely due to the clean and pure image New Zealand has. Consumers align with a feeling of ‘natural, from the source’ which may bias their choice over beverages from other overseas markets.”

With consumers looking for ‘better for you’ options, yet still wanting to enjoy the taste of cocktails and spirits, the popularity of no and low alcohol options continues to increase.

“Giesen Group ... are the only producers selling non-alcohol [New Zealand] wine in Australia and have had great success. Our Giesen Pure Light Range (Sauvignon Blanc, Pinot Gris and Merlot) newly released at six per cent ABV (down from nine per cent) has also been well received with consumers looking to moderate their alcohol intake without completely abstaining,” said Chorley.

Constellation Brands also has skin in the nonalcoholic game with its New Zealand wine label, Kim Crawford, seeing great potential for the category in the country.

“Kim Crawford Sauvignon Blanc 0% is now heading into the market ... to capitalise on the market need for great tasting no-alcohol wines, ideal for when you want to be part of the occasion, without indulging in alcohol,” stated a Constellation Brands spokesperson.

In terms of what we can expect next from our friends across the ditch, it has been predicted that the popularity of no and low-alcohol drinks will continue, as will convenient serves.

“We have noted an increasing number of ‘better for you’ drinks, i.e. low calorie, low/no alcohol,” said Melis.

“We only see these trends continuing in the near to mid-term. The popularity of ready-made cocktails in cans is definitely increasing e.g. Batched Premium Cocktails 230ml.”

Piquette, a low-alcohol, fizzy drink made by adding water to grape pomace and then fermenting it, is also becoming increasingly popular, according to constellation Brands.

-Glen Murphy Australia Pacific Regional Director New Zealand Trade & Enterprise

“Piquette wine will play an integral role in the emerging and evolving low alcohol wine category,” said a Constellation Brands spokesperson.

The Australian thirst for all things Kiwi has recently been sated with an initiative by New Zealand Trade & Enterprise (NZTE). The group’s Made with Care campaign brings together food and drinks (both alcoholic and non-alcoholic)from 42 New Zealand-based brands, showcasing what the country’s industries can offer to Australian consumers in line with the latest trends.

“It is clear that our Australian consumers feel just strongly as we do about supporting sustainable food and beverages and nurturing and protecting the world around us,” said NZTE’s Australia Pacific RegionalDirector, Glen Murphy.

With this continued interest from both sides of the relationship, it seems likely that New Zealand drinks will continue to feature heavily on the dining and picnic tables of Australians as we approach the Christmas and summer holiday period.

New Zealand vineyard area per variety (2021):

• Sauvignon Blanc -63.8 per cent

• Pinot Noir -13.9 per cent

• Chardonnay -7.5 per cent

• Pinot Gris -6.75 per cent

• Merlot -2.58 per cent

• Riesling -1.48 per cent

• Other varieties -3.99 per cent