Winepress February 2011

WINEPRESS Issue No. 200 / February 2011

Economic Future

Pre Vintage Check

Predict Brix

Chinese Market

Photo: Jim Tannock

The Official Magazine of

www.wine-marlborough.co.nz

In this issue...

Regulars

Features

3

8

4 7

Editorial

Tasman Crop Protection Met Report Marketing Matters

25 SWNZ Update

News From Home and 28 Away

Printed by: Blenheim Print Ltd. T: 03 578 1322 WINEPRESS is printed with vegetable oil based inks on elemental chlorine free paper which is sourced 100% from well managed forrests and manufactured under ISO 14001 Environmental Management Systems.

All indications are we are heading towards an early vintage, thanks to the warmer than average temperatures recently, plus the heavy train in December. Bunch numbers are up and berry weight could also be up – again a result of the weather.

p12

15 Vintage Pre Check for

27 Wine Happenings

All correspondence including advertising / associate memberships / change of address to: Wine Marlborough PO Box 511, Blenheim 7240 T: 03 577 9299, F: 03 577 9298 E: admin@wine-marlborough.co.nz www.wine-marlborough.co.nz

Vintage 2011

Wineries

Well before those first grapes start arriving, wineries need to have checked all the equipment they will require during vintage. This month Marc Taylor from Vitis (NZ) Ltd gives a run down on what you should be doing now, to be fully prepared for the upcoming vintage.

18 Generation Y-ine

Sanna Stander was born and bred in Stellenbosch, South Africa, the country’s leading wine region.

Yet becoming a winemaker was more an accident rather than a calculated decision. Now settled in Marlborough, Sanna is more than happy with the way fate played a role in her career choice.

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22 Preparing For Your

Annual Bank Review

It’s not something any of us like having to do – but annual bank reviews are now part and parcel of business. Tim McKendry, has 15 years of banking experience behind him, (and is now a Certified Practicing Accountant) and gives some insight into what banks are looking for during that review.

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02/2011 WINEPRESS

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Ravensdown

- helping you grow now and into the future Ask us about:

• Soil testing • Leaf testing • Fertigation products • Lime • Gypsum • Agrochemicals • Fertiliser • Travel Dollars

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02/2011 WINEPRESS

The Official Magazine of Wine Marlborough

Martin Burrows Account Manager Marlborough/Kaikoura 021 900 216

Darryl Wilkins Sales Manager Upper South Island 021 900 371

Matthew Powell Store Manager Marlborough 03 577 9861

Produced by:

From the Editor

Wine Marlborough Free to all levy paying members Associate Members: $77 +GST Editor: Tessa Nicholson 16 Bank Street

We are already well on our way into the New Year and vintage is looming extremely fast. The perfect weather conditions over the past few months mean it could well be one of the earliest vintages since 2006.

Which means there is a heap of work going on out there in the vineyards and in the

Blenheim

wineries as they prepare for the onslaught of fruit. Crop thinning has been the order of

T: 021 709 571

the day as berry weight and bunch numbers are above average. And the rain we had

E: tessan@xtra.co.nz

in December which set the vines up for the long haul of growth, has also led to a great

If you wish to make contact with any member of the Wine Marlborough Board, the following are their email addresses.

deal of leaf plucking.

As we head into this all important vintage, the message from NZW has been loud and clear. Keep the yields to manageable levels, and wineries don’t take more fruit than you can sell. Keeping yields down within the vineyard is not just about supply and demand. It is also about quality. The fruit that comes off the vine, will determine the

Dominic Pecchenino: nzyanks@xtra.co.nz

quality of the wine we sell to the world.

Anna Flowerday: ajflowerday@xtra.co.nz

happening out there in the vineyard? How is the global economy coping and what

Blair Gibbs: blair@spyvalley.co.nz

emerging Chinese market? Plus some important advice for anyone about to undergo

James Jones: james@starborough.co.nz

It is easy to get drawn in to doom and gloom, but 2011 holds some amazing

Ivan Sutherland: ivan@dogpoint.co.nz

those – with a quality vintage being the catalyst to start the ball rolling.

These are all issues we cover in the first edition of Winepress for 2011. What is does the immediate future hold? How can we ensure we make the most of the their annual bank review. opportunities. We need to make sure we are in a position to take full advantage of

Ben Glover: ben@witherhills.co.nz Peter McLeod: peter.mcleod@pernod-ricard-nz.com Ruud Maasdam: ruud@staetelandt.co.nz

TESSA NICHOLSON tessan@xtra.co.nz

Clive Jones: cjones@nautilusestate.com Richard Rose: kvl@silkweb.net.nz Guy Lissaman: glissaman@xtra.co.nz

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Met Report Table 1: Blenheim Weather Data – December 2010

December 2010

December LTA

Period of LTA

Deviation from December or % of LTA 2009

GDD’s for: Month - Max/Min1 Month – Mean2

252.7 237.6

209.4 (1996-2009) 121% 206.0 (1996-2009) 115%

222.0 211.3

Growing Degree Days Total Jul – Dec 10 – Max/Min Jul - Dec 10 – Mean

595.6 620.1

535.1 585.0

(1996-2009) (1996-2009)

111% 106%

513.0 558.6

Mean Maximum (°C) Mean Minimum (°C) Mean Temp (°C)

23.0 13.3 18.2

22.3 11.0 16.7

(1932-1980) (1932-1980) (1932-2000)

+0.7°C +2.3°C +1.5°C

22.5 11.8 17.2

- -

0

Ground Frosts (<= -1.0°C) 0

Air Frosts (0.0°C) 0

0.6 (1932-1980) 0.1 (1986-2010) 0 0

(1932-1980) (1986-2010)

-

Sunshine hours 224.9 Sunshine hours – lowest Sunshine hours – highest Sunshine hours total – 2010 2415.2

246 179.1 321.2 2443

(1935-2000) 1992 1974 (1935-2000)

91%

264.2

99%

2476

Rainfall (mm) 131.6 Rainfall (mm) – lowest Rainfall (mm) – highest Rainfall total (mm) – 2010 825.4

47 0.8 124.0 647

(1930-2000) 1934 1984 (1930-2000)

280%

19.8

128%

610

Evapotranspiration – mm

155.1

139.0

(1996-2009)

112%

138.1

Avg. Daily Windrun (km)

271.7

309.1

(1996-2009)

88%

305.3

Mean soil temp – 10cm

19.6

17.5

(1986-2009)

+2.1°C

18.6

Mean soil temp – 30cm

20.5

19.0

(1986-2009)

+1.5°C

19.4

GDD’s Max/Min are calculated from absolute daily maximum and minimum temperatures GDD’s Mean are calculated from average hourly temperatures

1 2

December 2010 weather Temperature and growing degree-days December 2010 mean temperature of 18.2°C was the warmest since 2005, which recorded a very warm mean of 18.5°C. December 2010 became the 9th warmest December on record for Blenheim, for the 79 year period 19322010.

As a consequence of the warm temperatures in December 2010 the growing degree-days were also well above average (Figure 2). The warm weather coincided with the main flowering period of Marlborough Sauvignon blanc and also meant that flowering progressed slightly faster when

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compared to December 2009. However, flowering duration was nowhere near as fast as it was in December 2005. Readers may remember that the 2006 harvest was very early. This was due in a large part, to the fact that flowering in December 2005 began early and was completed in about seven days, whereas flowering duration of Sauvignon blanc is normally 15 to 17 days. Monitored Sauvignon blanc vineyards in Marlborough were at 50% flowering on a similar date as in 2010 as they were in 2007 and 2008 and about a week later than in December 2005.

Rainfall December’s rainfall total was 131.6 mm or

The Official Magazine of Wine Marlborough

280% of the long-term average. This was in marked contrast with December 2009 which recorded only 19.8 mm. December 2010 is now the wettest December on record for Blenheim, for the 81 year period 1930 – 2010. Up until the 15th December only 1.8 mm of rain had been recorded, i.e. 129.8 mm was recorded in the final 16 days of December 2010.

The high rainfall in the second half of December broke a long dry spell that began on 1 October 2010. In the two and a half months from 1 October until 15 December 2010 only 52.8 mm rain was recorded.

Sunshine December sunshine at 224.9 hours was 21.1 hours lower than the long termaverage. At first glance you would think that this was due to the high rainfall in the second half of December. Surprisingly, the first 15 days of December with almost no rain only recorded 97.8 hours sunshine, whereas the final 16 days of December recorded 127.2 hours sunshine, as well as 129.8 mm rain. The days on which no rain fell in the latter half of the month recorded near to maximum daily sunshine, whereas the first half of the month had quite a lot of overcast days without any rain.

Soil Moisture Soil moisture in the topsoil (0-35 cm) at the Grovetown Park weather station was only 14.1% on 15 December, very close to its minimum value. With the high rainfall, topsoil moisture was boosted back to close to field capacity by the end of December. However, warm summer temperatures and wind soon dry the topsoil out again, as indicated in the summary for January.

Annual Statistics for Blenheim 2010, compared to the long-term average Sunshine Total sunshine for 2010 was 2415.2 hours or 99% of the long term-average. Nelson recorded 59.5 hours more sunshine than Blenheim in 2010, with a total of 2474.7 hours. However, as you have probably

Figure 1: Blenheim monthly rainfall for 2010 compared to the long-term average

read in the newspaper, Whakatane took out the title as sunniest town in New Zealand in 2010, recording 145.9 hours more sunshine than Blenheim. There must be a good Tui ad in that result.

Rainfall Total rainfall for 2010 was 825.4 mm, or 128% of the long-term average. This total was 215.4 mm higher than the 610 mm recorded in 2009. 2010 became the fifth wettest year on record for Blenheim and the wettest since 1995, which has the highest total on record at 1003.4 mm.

Considering that total rainfall for 2010 was well above the long-term average, (+178.4 mm) it is amazing that seven months during 2010 recorded less than average rainfall (Figure 1). Three of those months recorded less than half their normal rainfall (February, April and October). Three months recorded very high rainfall (May, June and December).

Temperature Blenheim’s mean temperature for 2010 was 13.7°C, 0.9°C above the longterm average of 12.8°C. 2010 is now the second warmest year on record for Blenheim (Table 2) for the 79 years 1932 – 2010 and the warmest since 1998, which recorded a mean temperature of 14.0°C.

Table 2: 10 warmest years on record for Blenheim for the 79 year period 1932-2010 Year

Temperature and rank

1998 13.95 1st 2010 13.71 2nd 1990 13.64 3rd 2005 13.61 4th 1999 13.59 5th 2001 13.58 6th 1970 13.50 7th 1962 13.46 8th 1981 13.45 9th 2007 13.41 10th It is interesting to note that of the ten warmest years on record for Blenheim that six of those years have occurred since 1998. A report appeared in the media recently showing that globally, 2010 tied with 2005 as the warmest year since records began in 1880. Globally, the ten warmest years on record have all occurred since 1998. Natural or manmade warming, that is the big question!

Frosts Blenheim recorded 35 ground frosts during 2010, the lowest number on record for the 79 years 1932 – 2010. 60 ground frosts were recorded in 2009.

January 2011 Weather Temperature The mean temperature of 18.1°C was 0.2°C above the long term average.

However, the overall mean temperature for January, being fairly close to average hides the fact that the temperatures fluctuated quite markedly during the month. The first and last weeks of the month were quite hot. The second week was very cool and the third week was close to average.

1 - 8th Jan 19.7°C was 1.8°C above average 9 - 16th Jan 15.6°C was 2.3°C below average 17 - 24th Jan 17.7°C was 0.2°C below average 25 - 31st Jan 19.7°C was 1.8°C above average The average daily maximum temperature for January was 23.0°C; 0.6°C below the long-term average.

The average daily minimum temperature for January was 13.2°C, which was 1.2°C above the long-term average; i.e. when looking at the whole month, daytime temperatures were slightly cooler than average, but night-time temperatures were warmer than average.

Soil moisture and evapotranspiration With the high rainfall in December 2010, soil moisture in the top soil (5-35 cm) at the Grovetown Park weather station was at 34% (fairly close to its maximum of about 37%) at the start of January 2011.

Although 40.2 mm rain was received during January, soil moisture had still dropped to 20% by the end of the month.

Potential evapotranspiration is a calculated measure of moisture losses through direct evaporation from the soil and through transpiration by plants.

Evapotranspiration levels are always high during the summer months, accounting for high moisture losses from the soil.

Total potential evapotranspiration during January 2011 was 154.5 mm. This was 3.8 times the rainfall received. For a pasture or lawn to continue to grow rapidly over the summer it needs to receive a similar amount of water as is

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Table 3: Blenheim Weather Data – January 2011

January 2011

GDD’s for: Month - Max/Min1 Month – Mean2

January LTA

Period 0f LTA

Deviation from or % of LTA

January 2010

251.8 240.0

246.8 (1996-2009) 238.6 (1996-2009)

102% 101%

262.6 242.4

Growing Degree Days Total Jul 10 – Jan 11 – Max/Min1 847.4 Jul 10 - Jan 11 – Mean2 860.1 Sep 10 – Jan 11 – Mean2 807.4

781.0 (1996-2009) 823.6 (1996-2009) 766.9 (1996-2009)

108% 104% 105%

775.2 801.0 728.8

Mean Maximum (°C) Mean Minimum (°C) Mean Temp (°C)

23.6 12.0 17.9

(1932-1980) (1932-1980) (1932-2000)

-0.6°C +1.2°C +0.2°C

23.6 13.3 18.5

Ground Frosts (<= -1.0°C) 0

0.1 0

(1932-1980) (1986-2010)

- -

0

Air Frosts (0.0°C) 0

0 0

(1932-1980) (1986-2010)

- -

0

Sunshine hours 222.6 Sunshine hours – lowest Sunshine hours – highest Sunshine hours total - 2011 222.6

261 165.2 335.3 261

(1935-2000) 1971 1957 (1935-2000)

85%

220.9

85%

220.9

Rainfall (mm) 40.2 Rainfall (mm) – lowest Rainfall (mm) – highest Rainfall total (mm) - 2011 40.2

50 0 167.0 50

(1930-2000) 1978 1985 (1930-2000)

80%

40.6

80%

40.6

Evapotranspiration – mm

154.5

137.3

(1997-2010)

113%

131.9

Avg. Daily Windrun (km)

262.7

281.1

(1996-2010)

93%

256.1

Mean soil temp – 10cm

19.0

19.0

(1986-2010)

Equal

20.1

Mean soil temp – 30cm

20.2

20.8

(1986-2010)

-0.6°C

21.3

1GDD’s 2GDD’s

23.0 13.2 18.1

Max/Min are calculated from absolute daily maximum and minimum temperatures Mean are calculated from average hourly temperatures

Figure 2: Growing degree days for Blenheim: days ahead (+) or behind (-) average using average hourly temperature data and long-term average 1996-2009 The graph shows the cumulative GDD difference between the season and the longterm average total

being lost through evapotranspiration.

This helps to explain why pasture or lawns dry out very rapidly during summer months without regular watering, additional to rainfall received.

Growing degree-day update Figure 2 updates the growing degreedays at the end of January 2011 in relation to the long-term average and other recent seasons. The starting point is 1 September rather than 1 July. The 2010/2011 GDD line is highlighted in bold red to make it stand out from the other lines. The 2010/2011 GDD line rose fairly consistently from 12 November 2010 through to 7 January 2011 with the warm weather. The latter part of January has had a couple of downward and upward blips associated with the temperatures described above. At the end of January 2011 the GDD line is slightly up on where it was at the beginning of January. The fact that the 97/98, 05/06, 07/08 and 10/11 GDD lines are at a very similar point at the end of January does not mean that grape maturity in each of these seasons is at the same stage of development. As you will probably be aware, the stage of maturity at this point in the season is largely determined by the timing of bloom and also crop load.

At the time of writing this article on the 1st February I anticipate that Veraison of Sauvignon blanc in 2011 will be slightly ahead of 2007, 2008, 2009 and 2010 but behind the early 2006 season. If the warm weather continues during February and into March, Marlborough could experience the earliest harvest since 2006.

Rob Agnew Plant & Food Research

The Met Report brought to you by Tasman Crop Protection

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The Official Magazine of Wine Marlborough

Marketing Matters Currently we are in the thick of rolling out our regional treasure, The Marlborough Wine Festival, and refining our big plans for 2011 to take advantage of the rugby world cup and other events.

Planning is no different to any other

business plan and strong event

in the glass opposition from Police

task; with repeated performance you

experience can achieve, Wine

was welcomed (albeit deemed by us

hone your ability and the easier and

Marlborough was delighted to be the

as unnecessary) but further proactive

more accurate your planning becomes.

recipient of a NZ Lotteries Commission

support is to be encouraged for our

With this being the 28th repetition of the

Grant for the event which we will stage on

industry in these challenging times.

Marlborough Wine Festival our plans

the 6th October. More information will be

Wine Marlborough will support other wine

are formed and refined by accurately

distributed about this event to all wineries

related Rugby World Cup initiatives in

capturing the process that has often

in due course.

ways we can add value, even if this is

rested in our participants and committees

Skipping the Marlborough Wine

simply in communications to our wineries

heads. Our aim is to document the

Weekend, last held in October 2009,

around ways to get involved. Keeping

innovations and improvements in a

was debated for some time in light

those who need to know about your event

manner that would be easy for a new

of a packed work schedule, but this

informed, is critical to get space in what

person to pick up. Does your business

valuable wine trade, media and high end

will be an extremely saturated national

follow a similar process or an even better

consumer focused event was considered

calendar of events and activities.

one?

too important to skip. Latching on to

I always welcome your feedback and

For us there have been many refinements

these key influencers right after the

suggestions.

and much thinking to work out our

final of the Rugby World Cup, exciting

strategy around the RWC and our

and educating them, showcasing our

Phone: +64 3 577 9299

events. Finally, we have settled on

stunning region and showing them our

Mobile: +64 21 831 820

rolling out one core rugby activity with

confidence in Marlborough is a key that

an event modelling the Wine Festival at

will help all our industry participants.

Brancott Vineyard and targeting up to a

Dates for this are 27/28 October 2011.

maximum of 4,000 attendees. You are all

Marlborough needs more high

encouraged to attend as well. This key

calibre events throughout the year to

date is 6th October 2011. A look at the

continuously attract people here. We

game schedule will point to this being a

need the support of our council, volunteer

key transition date from the games in the

groups and other parties to make this

South Island and Wellington to the games

happen. Meetings are happening with

further north. We think the timing is right.

our new council and their support of the

As a witness to what an accurate

Blues, Brews & BBQ’s and ourselves

Email: marcus@wine-marlborough.co.nz

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Vintage 2011 Predictions The unusually warm December, plus rain after flowering, are propelling Marlborough towards one of its earliest vintages in five years. Those conditions have also affected yields.

The earliest vintage on record in

were still occurring, leading Mr Agnew to

be around 13% above the long term

Marlborough was in 2006. It was so

predict an earlier than average vintage.

average.

early, hand picking began on February

“The latter half of December and the first

“We predicted an increase in Sauvignon

15, while the research monitored blocks

week of January were very warm, so the

Blanc bunch numbers due to the warm

of Sauvignon Blanc were harvested

growing degree days are in line with the

December conditions in 2009 and the

between March 15 and 30 within the

2005/2006 harvest. And the 2006 harvest

feedback from viticulturists was our

Wairau region and on April 06 in the

was one of the earliest on record.”

estimate appeared to be accurate.

Awatere – in some cases four weeks

Admittedly the yields were slightly below

“But the update following flowering,

earlier than the previous year.

average in 2006, but Mr Agnew says

bearing in mind we had one of the

Chances are the 2011 vintage will be

given the amount of crop thinning that

warmest Decembers on record, suggests

up there with those early harvesting

has taken place in Marlborough this year,

our bunch weights will also be above

dates, which can be put down to the

the yields could be lower.

average.”

extraordinary conditions experienced in

“Certainly 2011’s vintage looks likely to

The two spells of heavy rain on

the region prior to Christmas. Plant and

be the earliest since 2006 –the biggest

December 21 and 28 have slightly

Food Research scientist Rob Agnew,

influence on that will be the intensive

confused the data though he says.

who is also responsible for Vinefax, says

crop thinning that is happening.”

“We know that water stress shortly after

the growing degree days have been

As well as warmer than average

flowering is a controlling factor in berry

above the long term average since mid

temperatures during December, the

sizes.

November.

region also endured two of the wettest

A lack of rain leads to smaller berries.

“It has been a slightly interesting season

days of 2010. Two major storms a week

Rain after flowering tends to lead to

though in terms of Sauvignon Blanc. Bud

apart, saw nearly 20% of the annual

bigger berries. So this year we might end

burst was slightly later than any of the

rainfall fall in parts of Marlborough.

up with reduced berry numbers because

previous five years. So initially we were

Dr Mike Trought says the high

of the rain, but the berries themselves

expecting flowering would also be late.”

temperatures, the rain and the conditions

might be bigger.”

The late bud burst followed one of

in December 2010 all indicate yields will

Mike points out though, as with all

the wetter winters the region has

be above the long term average.

models especially predictive ones, the

experienced. But right on cue, the sun

“The model uses temperature data that

“ground truth” is absolutely essential.

began to shine just in time for flowering.

has been defined over the period of

There is nothing like getting out there

“The warm temperatures started on

December and January to initially predict

and conducting your own vineyard yield

November 12 and since then it has

bunch numbers and then bunch weights.

assessment as there has been a level of

continued to remain warm, with the

It utilises eight years of data from various

variation throughout the region.

result being an earlier than anticipated

sites on the Wairau Plains.”

“People also need to remember that

flowering for Sauvignon Blanc.”

Back in May and June last year, Mike

the predictive model is based on data

By mid January the warm temperatures

was predicting the 2011 yield would

collected. Once temperatures rise

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The Official Magazine of Wine Marlborough

outside of the data figures, which is

earlier. The vines have just gone mad,

Sauvignon Blanc yields.

happening this season, the information

and there has been a fair bit of leaf

“With Sauvignon Blanc the berry bunch

may not be as accurate.”

trimming done.”

weight reflects the berry numbers.

A great deal of fruit thinning has been

Conditions during the past two months

Whereas with Pinot Noir the bunch weight

undertaken throughout the province,

will play an important role in next year’s

is a function of the changes in berry

as growers and companies strive to

vintage as well and Mike Trought says

weight, not berry numbers. The reason

ensure they don’t produce more than

predictions are the yield will again be

seems to be that non fertilised Sauvignon

can be sold as

Blanc berries just

wine. Mike says

abort, whereas

all growers need

in Pinot Noir

to be out in the

it becomes a

vineyard checking

seedless grape

constantly and

and you get

talking seriously

more hen and

with their wine

chicken.”

companies.

Which for wine

In terms of how the

makers could be

vines are coping,

just what they

viticulturists agree

want, in terms of

the rainfall in

flavour intensity

December has

in the resulting

set them up for

wines.

the long haul into

But as with all

vintage.

predictions,

“They are green,

nothing is

strong and healthy

guaranteed.

so it will allow them

Weather plays

to push through to

a major role in

the end of the season,” says Mike Croad,

above the long term average. It would

determining the final harvest and there is

Villa Maria’s Marlborough Viticulturist.

take a major cold snap next flowering to

still some way to go before vintage 2011

“It has also been a less windy year than

impact on those predictions.

is done and dusted. In the meantime,

normal and that is helping the vines – as

“With the temperatures in December 10

everyone spoken to said it is important

the moisture isn’t being sucked out of the

well above average, for bunch numbers

for growers and wineries to stay in

ground or the vines themselves. I would

to drop next vintage it would take a

constant communication, to ensure the

say we could be seven to 10 days ahead

decidingly cold flowering to lower those

quality of the vintage is right up there with

of the average season – but who knows

numbers – something like a once in 40

the high summer temperatures we have

there is still a very long way to go.”

year cold period.”

experienced so far.

“The rain had a huge effect on

It is not just Sauvignon Blanc yields

growth, it has been phenomenal,”

that look like being above the long term

Wine Marlborough Chairman Dominic

average. Mike says Pinot Noir crops

Pecchenino says. “Growers who had

also seem to be higher than normal. The

anticipated they would be lifting wires

research that has been undertaken in

after Christmas were actually having to

recent years has shown there are some

get out there and get them lifted much

differences between Pinot Noir and

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The Global Economic Recovery One of the major issues facing the New Zealand wine industry in the past two years has been the world-wide recession. While experts believe the worst is now over – one forecast organisation is predicting a bumpy road to recovery.

John Ballingall, Deputy Chief Executive

past the worst, so we are on the upswing.

spending has been exacerbated by

of the New Zealand Institute of Economic

But New Zealand households are

massive austerity measures taken by the

Research,(NZIER) says while the global

deleveraging and not spending much.

government.

recovery has begun, there are risks

There has been a big drop in per capita

“Five hundred thousand jobs are to go in

associated with it that will have major

income and that leads to a decrease in

the public sector over there. Government

implications for a small country like New

consumer demand.”

departments which employ a lot of your

Zealand.

Supporting that statement, John says the

customers, are having their budgets cut

“The good news is we are past the very

average spending of New Zealanders

by 25% and benefits are being cut.”

bottom of the trough when (NZWine’s)

has dropped significantly in the past two

John says things are even worse in

key global markets combined, shrank

years.

the US, mainly due to the fact the

by about two and a half percent in the

“Each New Zealander on average is

government’s reaction to the downturn

midst of the recession. We are gradually

spending about $45 less per week than

has been to pump money into the

climbing back into positive territory, but

they were. Spread that across four million

economy.

it won’t be until about 2012 that we get

people and you can see that is a huge

“But at some stage they have to stop,

back to anything like normal in those

amount of money that has been sucked

they can’t keep throwing money at this

key markets. Even then we will wobble

out of the retail sector and is being used

recession. When they stop Government

around an average of about three

to pay off debt.”

spending there is a real risk that the US

percent. So it will be a slow recovery and

So if the domestic market can’t grow,

could dip back into recession again.

it will be a bit bumpy.”

wine companies have to concentrate

They have printed NZ$750 billion to put

He says the economic recovery is patchy,

on exporting. Currently our three largest

into the banking system in an effort to

meaning countries are recovering at

export markets are Australia, the UK and

stimulate demand. That is over five times

different speeds.

US.

the New Zealand economy.”

Added to that, the domestic market,

He describes the UK as being in a

Due to the seriousness of the economic

whilst slightly more positive, is also not

“real mess”. Hit hard by the recession,

issues in the US, John says there are

out of the woods.

consumers aren’t spending, preferring

risks associated with expanding our

“Our view is the New Zealand economy is

instead to pay off debt. That drop in retail

market there.

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The Official Magazine of Wine Marlborough

“Their recovery is going to take quite some time, so the overall

Finally John said beware of pundits who claim the recession is

level of demand might be a bit subdued for many years. But

over.

that said it is still a massive market and there is still a lot of

“It is going to be a long, rough road ahead. Demand is going

money to be made there, We just have to realise that it is not

to be weak in a number of our key markets and we can expect

going to be like it has been for the last decade, which has been

some more shocks and bumps along the way. There are three

boom, boom, boom.”

distinct phases of the recession. The crash, when it hit rock

As for Australia, which takes one third of New Zealand’s wine

bottom. The bounce back up when investors thought they had

exports, it has been looking “pretty good.”

made it through okay. And then it has started to drop again,

“We are hugely reliant on Australia for all of our exports. They

which is a case of reality biting. The global equity market

never went into negative growth. In the last 10 years, spending

thought it was going to be alright then they realised that this

has been pretty strong, but there has been a shift in recent

recovery around the world is different to what we have seen in

times. The trend for household spending, which is ultimately

previous recoveries. This may be the new normal for a while

what is going to drive demand for your wine, has eased off.”

yet.”

Just what impact the recent natural disasters will have on the Australian economy is also unknown, although immediately after the Queensland floods the Aussie dollar did drop.

So if these key markets are feeling the pinch, are there new markets New Zealand should be concentrating on?

“Emerging markets like Asia, India and China are cranking along at about 8 or 10% annual growth. There is ultimately some potential within these markets. I understand that wine exports to China whilst at a low level currently, are starting to grow quite quickly. I think there will be a lot of opportunities there, as incomes rise and the middle classes expand their taste.”

As for the issue of the value of the New Zealand dollar, John doesn’t hold out much hope for it dropping in the near future.

“Unfortunately for exporters, the New Zealand economy is a victim of its own success at the moment. Even though we are not going gang busters, relative to the rest of the world, the New Zealand economy looks quite attractive to investors. Our interest rates are relatively high and investors looking to put their money somewhere where they can get a decent return are coming to New Zealand.

“That and the quantitative easing in the US, is going to push down the US dollar and all other currencies will be high against it. So even though we are over-valued against the US dollar and the pound, we don’t see the New Zealand dollar coming down in a hurry. Our best guess is it will stay pretty elevated for a couple of years and then back off to maybe 65 – 70 US cents.

But you need to be budgeting on a dollar that is way higher than it has been in the past decade.”

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Chinese Market Lessons China could well be New Zealand’s saving grace, in terms of providing a massive market for our wine. But as we attempt to secure a foothold in the market place, we need to be aware that there are some cultural differences to understand first.

There is no doubt that China has massive potential in terms of sales, but it might not be as easy selling our product there as we would like to hope. Even one company founded in China has found that just because you produce a quality product, it doesn’t mean consumers will rush to purchase it.

Judy Leissner is the CEO of Grace Vineyards, a family run business set in Northern China in the Shanxi Province.

Founded in 1997, the company now has more than 200 hectares of vineyards spread over three provinces, all based in the mid west. In just 14 years they have gone from nothing, to being one of the most talked about Chinese wine companies in the world.

But the lessons learnt by Grace Vineyards could be important to New Zealand wine companies keen to export there.

Judy says one of the most important lessons she learnt, was not to refer to the company as “boutique.”

“If you are doing business in China, you need to understand one thing. While boutique is a positive word in English, it is not in the Chinese sense. It means a mama and papa shop, where you have no capital. It means you are producing things in your backyard and then selling them out the front. In China they like big.

Big means you have money and therefore quality. When we first began, I would tell

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people we had a boutique winery and nobody wanted to taste the wine. So if you want to market in China – don’t use the word boutique!”

Marketing and selling the product was a major hurdle for the small family company. Another lesson that maybe New Zealand can learn from.

“When I first started selling the wine, we had no brand and no distribution channel. Most of the big brands are state owned, and they were blocking us when we tried to enter a restaurant. I thought maybe we had to do some big advertising, like maybe a billboard next to the highway. But when I checked the price it was ridiculously high, so I thought

The Official Magazine of Wine Marlborough

maybe we need to open a shop. That could become the advertising in itself.”

Which is just what they did. Grace Vineyards opened their first shop five years ago. Now it is not only a shop it is also a wine bar, and that first one has developed into 22 spread across China.

It has been the greatest advertising possible for the company. They have decorated them to stand out from other similar bars, using only black to emphasise the differences and they only sell their own wines. The resulting sales boom was beyond anything Judy could have hoped for.

Once the wines became known to the general wine customer, they also started appearing on restaurant wine lists.

But bearing in mind the average Chinese consumer is totally unaware of wine, what other lessons can we learn from Grace Vineyards? Judy says it is essential to make it easy for the consumer to understand what they are buying. European names such as Gewurztraminer, Cabernet Sauvignon, Cabernet Franc and even Sauvignon Blanc, don’t trip of the tongue easily.

Grace Vineyards are making a variety of European styles over four tiers.

They decided to highlight the tiers and varieties by their labels.

“Not only in terms of looking nice, but also providing a theme for people to recognise. For example our entry level is

all very colourful. Our Reserve wine has an all black label and we have a deep blue colour label as well. So even if people can’t remember the name, they will say they want a black label or blue label. It is easier for them to recognise.”

The colour of labels is also important, as certain colours portray a certain image. Red and gold are deemed as prosperous colours and are always associated with festivities. Given 60% of wine sales in China are sold over two holiday periods – Chinese New Year and the Mid Autumn Festival, it pays to take note of the festivity colours.

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In fact the entire Chinese wine industry is growing at exponential levels, something we as exporters need to keep remembering.

Back in 2008, the world’s oldest wine merchant Berry Bros. & Rudd said in their Future of Wine Report, that China would be the world’s leading producer of wine by volume, within 50 years.

So if we want to make our mark, we may need to move quickly.

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™

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The Official Magazine of Wine Marlborough

Vintage Pre Check for Wineries Once vintage begins, there will be no let up for winery staff. No let up either for the equipment, which is likely to be operating anything from 18 – 24 hours a day. This is why pre vintage equipment checks are essential.

One of the major issues facing wineries,

any use since last vintage. They need to

winery service engineers come up against

is the equipment utilsied during vintage

be run up and put through their paces well

during vintage is the lack of critical spare

hasn’t been in use for more than nine

in advance to vintage starting.

parts held by wineries. Particularly when it

months. Marc Taylor, Winery Services

The importance of refrigeration plants

comes to presses, pumps and filters.

Engineer at Vitis (NZ) Ltd, says it is

cannot be underestimated. Marc says it

“These are specialised and mission critical

therefore vital that all gear is checked by

can be easily overlooked, given we tend

items of equipment and you need to have

professionals, well before the first grapes

to treat them a bit like fridges at home.

basic spares on hand to minimise any

begin arriving at the gate.

“When it works, there is no problem. But

downtime if there is an equipment failure.

Every year, he says there are problems

the minute it doesn’t work we start to have

You can’t always rely on all spares being

within the industry that could have been

real issues. It’s the same for wineries.

available the day you need them. Wineries

prevented if a thorough pre check had

Wineries must have their refrigeration

need to carry critical vintage spares,

been undertaken early enough.

plants and air systems checked by the

particularly mechanical seals, press door

“Ideally companies would have begun

contractors, or the plant engineer prior

seals and any vintage critical equipment.

their pre check in January, and even

to the season. If either one, of those fail,

So then if you have a breakdown, the

earlier if it is a large winery. Smaller

it will stop the entire winery’s operation. It

equipment can be repaired with minimal

wineries won’t take as long to check, but

doesn’t bear thinking about.”

down time no matter what time of day or

a lot of the equipment will not have been

So check the refrigeration and also check

week.”

used since vintage last year, it is important

the glycol levels are high enough.

The ideal situation is to buy the spare

to get it up and running well in advance to

“That’s a classic one, because they will

parts required throughout the year, so

ensure if there are any problems, there is

probably get a few leaks during the winter

they are on the shelf well before vintage

plenty of time for them to be repaired.”

season, they weep a bit and we lose a

begins. Otherwise if a part is required

Presses, in particular, need to be run up

little bit of glycol. Because glycol is pretty

during the season, there is a likelihood

to make sure everything is in working

expensive, some wineries will run at a

it will cost a lot more not to mention the

order. The complete operation needs to

lower level, but the minute they have a

down time.

be checked – the pressing sequence,

little leak and they pull that tank back onto

“If we have to fly a part out on urgent

inflation and deflation sequence, including

line at vintage time, it will drop its base

courier from Europe, it is a huge added

onboard CIP stations, all need to be

level. Then all of a sudden you start to

cost.”

functioning correctly.

have cooling issues. So check the chillers,

Check you have enough ground lines

Rotary Drum Vacuum Filter’s play a

check the glycol levels or ideally get your

well in advance. If workers are running

major role once the grapes begin to be

service agent in to do it.”

around looking for a ground line, it is a

processed, and again they won’t have had

The other major issue Marc and other

huge waste of time. Make sure you have

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enough hose tails and seals as well. While

major issues. What can happen is the

Otherwise, because as they are often

these aspects aren’t maintenance issues,

marc rolls up, because there is not a lot

seasonal workers, they do the vintage and

there is still a necessity to ensure there is

of it, it squeezes out very well and dries

then leave. When they leave you lose all

plenty of cellar equipment to cope with the

out very quickly. It rolls up like a cigar

their knowledge and information on how

fruit levels you are expecting.

and that’s like having a steel rod inside

that piece of equipment was performing.

Weather conditions during vintage can

the press. It can tear the membranes out

If you don’t extract that you are in the dark

also impact on how the winery equipment

straight away. So be aware of what your

completely. So basically, wintering is one

copes. Marc says one common problem,

press can do.”

of the most important things to do.”

if the season is shortened due to rain, is

But perhaps the most important thing

The other piece of advice Marc has to give

winery staff tend to overfill presses.

when it comes to vintage equipment is

– is don’t try and do a repair job yourself.

‘That’s a big no no. Please don’t overfill

to ensure it is wintered after the season.

Get professional help. While it may seem

the presses because you will bugger

What Marc means by that, is checking,

easier to undertake the task yourself,

them. That’s twofold. You will wear the

cleaning, lubricating every item of vintage

the chances of causing more damage is

equipment out a lot quicker and secondly

equipment prior to closing it down. Also

high. The more time your equipment is not

the equipment isn’t built to press full to the

debrief the staff who were operating each

working, the greater the impact on your

top. It is built to hold a certain maximum

item of vintage equipment to determine

business bottom line, especially at this

and minimum load of grapes. Keeping

any faults or issues that may be occurring.

critical time of the year where time equals

within the operating parameters gets

“If you do that, you will know some of the

money.

the best extraction rates and processing

problems that will require fixing before

times. Over filling risks blocking draining

the next vintage. It is quite important

screens and hydrollicking your press.

particularly if you are a larger winery,

“Likewise, never under fill a press. They

because you get to talk to the people

have minimum load levels, and if you have

who have run the equipment and find out

say three or four tonnes to press and you

what problems and issues occurred and

put it in a 15 tonne press, you can cause

maybe even suggested improvements.

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The Official Magazine of Wine Marlborough

New Cellar Hand Course in Marlborough A three way partnership between NMIT, industry members and the Ministry of Social Development, has resulted in a first ever cellar hand training course in Marlborough.

In many ways the recent recession can

coming on board. Not only will each of

slate and train people to our methods

be thanked for the establishment of the

the wineries provide essential training

without the pressure. It gives them the

four week Training to be a Cellar Hand

over the four week period, they will also

chance to gain confidence about what

course at NMIT. Spokesman Jeff Wilson

provide full time employment to the

they are doing before the winery gets

says while the idea had been floated a

course members during vintage.

really busy.”

few years back, there wasn’t really the

The way the course works, is each of the

Eric Hughes from Pernod Ricard says

demand.

15 students will spend the morning at

the partnership gives the company a

“A few years back there were more

NMIT, working on numeracy and literacy

chance to offer something to unemployed

jobs than there were workers, low

and learning the basics of making wine.

Marlburians who have an interest in the

unemployment and a large number

In the afternoons the students will be

wine industry.

of foreigners applying for cellar hand

spread around the three wine companies,

“We see it as investing in the community.

jobs. That has changed recently,

learning how a cellar operates and the

There are people out there struggling

unemployment has risen, particularly

role of a cellar hand during vintage.

to find work and hopefully through this

in Marlborough and the immigration

NZQA standards can be gained by those

course they will be given an opportunity

rules mean it is harder to employ

who don’t already have them, which is a

they might not have had.”

international workers. So the Ministry

vital part of the training.

Deane Caughey from Indevin says they

of Social Development wanted to

Jeff says over the four weeks, each

are looking for future key people in both

support something that would get local

student will work at all three wineries. If

the winemaking and production fields.

unemployed into sustainable work.”

they complete the course, they will be

“This may be a new initiative for our

NMIT saw a gap within the current

guaranteed a position at one of them

industry, but when you compare it with

wine industry related courses on offer,

for the duration of vintage, with the

other industries, we have suffered a

(Certificate in Vineyard Practise and

opportunity of long term employment if it

bit of a void and we are keen to see

Diploma in Viticulture and Winemaking)

is available.

that broached. What we are looking

and was keen to support the

For the three companies involved, the

for is enthusiastic people who want to

development of another tier of learning.

course provides the ideal opportunity to

apply themselves . It’s not about having

“But we knew we needed to have a

train people well in advance of the frantic

previous experience.”

partnership with the industry itself, if it

vintage period.

As a national first, the Cellar Hand course

was going to be successful.”

Anthony Walkenhorst, senior winemaker

attracted strong interest locally, with 25

Three major wine companies were

at Kim Crawford Winery says once the

individuals from all walks of life applying

approached to see if they would be

grapes start coming in, there is very little

for the 15 positions.

keen to support the course, with all,

time to train newcomers.

Indevin, Constellation and Pernod Ricard,

“It will be great for us to start with a clean

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Sanna Stander - South Pacific Cellars

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The Official Magazine of Wine Marlborough

Generation Y-ine Sanna Stander An enthusiastic wine loving uncle, a fantastic week of orientation at University, a love of travel and a wee touch of fate were the impetus for Sanna Stander’s decision to become a winemaker.

At the high school Sanna attended in Stellenbosch, South Africa, students were given a helping hand when it came down to choosing a career. Around age 16 they all had to fill out a questionnaire regarding their likes, dislikes, strengths and weaknesses in terms of subjects.

Once those were assessed the students received a printout of potential careers they might like to look into, prior to them making any future tertiary decisions. In most cases the students would receive a few pages of potential jobs. In Sanna’a case, she got back 40 pages to peruse.

“It had everything from fashion designing – which I am not interested in at all, to accounting which wasn’t quite what I had on my mind either. I just looked at those 40 pages of paper and thought: “what am I going to do with my life?!.”

Possibly because her interest range was so wide. She had studied and done well in a raft of subjects, from languages, to art, to science and maths. Her mother suggested she do law.

“I was good at arguing and was never wrong – in my mind.”

Her father a physics lecturer at Stellenbosch University suggested she think about medicine.

“In the end I applied for medicine. I had this beautiful idea of working in rural Africa with my Landrover, travelling between small communities as an

African, helping sick people.”

But given the competition for medical school, Sanna had to come up with a backup course, in case she missed out.

This is where her Uncle Brin came into the picture.

“He is passionate about wine, and infatuated with Pinot Noir. When travelling overseas he always brought wine back with him. When I was about 16 or 17 he would always get me to sniff and taste the wines. I’m not too sure if I ever got what he was trying to point out though – but I wasn’t going to give up the chance of sipping these wines.”

When Brin found out she had applied for medicine, he wasn’t sure she had chosen the right course.

“He said to me, ‘Do you really want to be a doctor. It’s so boring. Everyone wants to be a doctor. Do you really want to drive around in your Merc and have lots of money and all those long hours? Why don’t you become a winemaker?’ Funnily enough one of my friends at school, whose father was a winemaker, looked through my printout from school and she said the same thing. She had already planted a seed. So I thought, if I can’t study medicine I might as well do an Agriculture degree.”

As it turned out, Sanna did miss out on the first intake for medicine and was placed on the waiting list. So that first week of the university term, orientation, she started out with the Agric degree students.

“I just loved it, they were such a great, diverse group of students and I was

having such fun. At the end of the week, my Dad rang and asked if I still wanted to do medicine, if I made it through the waiting list. It was a Thursday night and I told him I didn’t know what I wanted to do, but I would think about it overnight and call him the next morning at seven.

But of course I had a huge night out and woke up with the alarm clock, thinking I have to tell dad what I want to do. I just picked up the phone, not thinking about it and told him I was going to continue on with Agric.”

Ironically she had actually made it through the waiting list and been accepted for medicine. While even now she has some slight pangs whenever she visits a hospital, she has no major regrets about making a spur of the moment decision early that Friday morning.

“I don’t know how I would have studied for seven years and besides I’d rather have a thermometer in a ferment than someones mouth! Much more fun!”

Admittedly, there were a few times in that first year at university when she wondered what on earth she had done.

Especially as the viticulture and oenology sections didn’t appear until well into the third year. In the meantime she had to learn all about zoology.

“That first year we didn’t learn anything about wine, it was all pure science. I absolutely hated zoology. I was stubborn and I just couldn’t understand why I had to know all about the shark’s nervous sytem to enable me to make wine. I have to admit I enjoyed dissecting the bunnies but alas, failed that course and had to sit

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it again the next year, which was a bit of a pain.”

The second year was more fun, it was biochemistry, microbiology and soil science. Finally Sanna was in her element – apart from the fact she still had to pass that damn zoology paper.

But it was the third year that things started coming together for her – well almost. In that year the focus was solely on oenology and the students were given the opportunity to make their first batch of wine. Each student was assigned a parcel of grapes, with a range of varieties being handed out. At the time Sanna was certain she would end up with the one variety she couldn’t stand – Chenin Blanc.

“In those days Chenin Blanc was mass produced in South Africa and deservingly so, didn’t have a good reputation. A lot of progress has been made, and now it is actually one of my favorite varieties to drink back at home. When they handed me the paper of what I was going to make – sure enough it was Chenin Blanc, so I wasn’t 100% enthusiastic about making my little brew.”

What’s more she was one of the first students to receive her parcel of grapes, after an extremely hot and tiring day out in the vineyard. When all she could think about was heading home for a cold beer, she was told she had to go and receive her bin of grapes and start the initial wine making process. Being the first group of students to make their wine was pretty exciting she admits, although they were more than a little nervous. Especially as the manager of the small uni winery had given them quite a lecture on using the crusher/destemmer .

“When he had taken us through the winery, he told us in no uncertain terms not to break this piece of equipment, as it was so important to all the students,

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us and those doing their Masters. If this machine broke down, then everyone would be in trouble and unable to make wine.”

You can see where this is going can’t you. Sanna was the very first one to place her bin of grapes in the crusher/ destemmer and all of a sudden it literally exploded. There was an unearthly bang and the machine just stopped operating.

“I was just standing there going, ‘Oh no, this is bad,’ as the manager was giving me this evil look.”

As it turned out, it wasn’t Sanna’s fault.

The group that had used the machine the night before had over enthusiastically washed it down and water had ended up in the electrics. Then when it turned on the next day – a massive explosion.

With that little mishap behind her, she had to work her emerging ability on a parcel of unripe Chenin Blanc grapes. As yet the students hadn’t been taught how to de-acidify wine, so she ended up just making it, bottling it and rather proudly giving it to her Grandmother to try.

“Her reaction was, ‘Oh no it tastes like cough medicine’, while stripping the enamel off her teeth!!”

Not quite the auspicious start to a winemaking career she had been hoping for.

“In retrospect if I could do it all again, I would have done it differently, I would have used a barrel. But it was a good lesson.”

The students also had to make port, which she describes as being great fun.

“We made it in groups of two and basically we had to sit there and wait until the port was at the right level to press it. Ours happened during the night. So we sat there and every few minutes we would taste the port and by the time we got to pressing it we were horribly drunk – good times.”

The Official Magazine of Wine Marlborough

It was 1997 when Sanna began her degree – and South Africa was emerging from the blanket of apartheid. The country was beginning to re-emerge on the world stage and the wine industry was exploding. Her year was one of the biggest classes up until that stage to undertake the degree, and all were viewed as being rather an exotic breed of student. Whenever she was introduced as a winemaker, people flocked to learn more.

“It was the whole romanticism thing of making wine and no one had any idea of the reality. I remember one of my accounting friends visiting me at the winery one day. We were busy washing down the presses and I was standing there bare feet cleaning. She looked at me and asked what I had done today.

I said well I took grape samples and cleaned the winery, cleaned the pump presses, did the press overs, cleaned the presses and crusher. ‘Oh so is this what you studied four years for, to hold a hose in your hand?’ she asked. And I said, actually yes it is. People think you sniff and taste wine all day and eat cheese.

But no, we clean most of the time. And I love it. I would much rather be standing with a hose in my hand than a calculator.”

After graduating, she had three choices.

She could find a job in South Africa and get her foot in the door, she could continue to study and get her Masters, or she could travel overseas. Given her desire to travel and put some of those language lessons in French and German to the test, she chose to travel. During her degree she had undertaken vintages in Robertson, in a large cooperative and in Constantia, a cool climate region that produces Chenin Blanc, Chardonnay and Sauvignon Blanc among others. The latter was a huge learning curve, as the winery, Groot Constantia was the oldest

winemaker in South Africa.

“So it had a lot of history, it was a small company and it was fantastic. The winemaker there planted the seed of New Zealand. He had friends who had done vintages in New Zealand and suggested it would be interesting for me to travel there.”

But like so many young winemakers, France was calling. Her uncle came to the party with a contact in Bordeaux who offered her a job over vintage. Despite only gaining her Visa 24 hours before she needed to be on a plane, the job was everything she could have hoped for.

“It was the most magical year of my life. I worked for a second growth Chateau and lived in a beautiful neighbouring Chateau that had room for Africa. It was surreal.

The winery was very small, very hands on. I learned such a lot. Every day I had to sample in the vineyards, and I learned the importance of barrel work, how they work with barrels and the theory behind it. I learned the importance of tasting.

Every day I had to get a sample of every tank and barrel batch and lay them out for the winemaker and the winery owner to taste. I got to drive all through the Medoc and had friends nearby so it was manjifique! I couldn’t believe what was happening to me.”

The famous long lunches were the icing on the cake, so to speak. Every day at midday the winery would grind to a halt and the staff would head out for lunch.

It is where Sanna’s love for cheese and good food began.

“We would have an entree, main, then cheese and then desert and lots and lots of wine. After that I would have to go crop sampling in the vineyard. I would end up just wanting to fall asleep under a tree.”

While she would have loved to stay on, the contract was only for a vintage and she had to begin looking for somewhere

else to travel to. With a desire to visit Buenos Aries, she applied and was accepted at a winery in Argentina.

“I was so excited. I had a job for five months, had bought my US dollars, had my tickets. Then a week before I was due to leave, I got this call from the winery. They had had a major financial crash in Argentina and the winery said they wouldn’t be able to pay me and the government wouldn’t allow them to employ foreigners. There I was all ready to leave and nowhere to go to. I couldn’t go back to South Africa as vintage had already started. I didn’t want to go to Australia and then I thought – New Zealand starts a bit later, maybe I can go there. So I contacted a Kiwi I had met and said I need a job in New Zealand please. He organised a job for me at Marlborough Vintners, with Graeme Paul.

I came out here and I loved it.”

Well first impressions weren’t that great she admits. She arrived on the ferry, was picked up by the assistant winemaker and immediately taken on a wine tasting tour. Stopping off at a local supermarket, she was greeted by a pack of local boy racers. Not the best impression. Then off to Vavasour winery for a tasting. The year was 2002 and Marlborough had been ravaged by the Boxing Day fires, only a few weeks before her arrival. So she was greeted by scarred, black hills, skeleton trees and a landscape that resembled a war zone. Not exactly the picturesque wine country she had imagined. Despite all that, she fell in love with the area and for the first time could see herself settling down to experience the entire winemaking process, rather than just a vintage. After vintage she returned to South Africa and was quick to jump at the opportunity to return the next year.

“By then I had done the whole vintage thing for three years, I thought it would be

good to see the whole process through, see the filtering, the bottling and not just the harvest. I realised the most important decisions are made after harvest, the looking after those parcels of fruit. That is where the winemaking comes in, where you get to make the decisions that will impact on the wine.”

So in 2004 she arrived back in Marlborough, deciding to stay put for two years. Seven years on she is still here.

A bit of serendipity came into play; the development of South Pacific Cellars winery at Riverlands and the assistant winemaker leaving to have a child. Sanna took on the assistant winemaker role and she hasn’t looked back since. She loves the fruit, loves the lifestyle and loves the small community of winemakers that work with and around her. Her partner Hamish Clark works down the road at Saint Clair, Mudhouse winery is next door, Jackson Estate down the road and she gets to work with shareholders who are as enthusiastic about the end product as she is.

Feeling so strongly that she belongs here now, Sanna intends applying for New Zealand citizenship next year.

Looking back she says she has huge gratitude for those people who encouraged her to become a winemaker.

There is nothing in the world she would rather be doing, or a product she would rather be working with. As she said to her friend in South Africa – she would rather be standing with a hose in her hand than a calculator, or a stethoscope, or a fashion designer, or even a law book!

“I just love what I do and can’t imagine doing anything else.”

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Preparing For Your Annual Bank Review

BY TIM MCKENDRY

Do you think your business is a good risk?

Would you let your mother invest your inheritance in it?

If you had $1million would you invest that into your business or would you take money out and invest it elsewhere if you could?

Would you invest all of the $1million or part of it?

It’s questions like these that your Bank is asking itself. Ultimately, your Bank is building up a risk profile of your business.

Risks are broken down into different types of risks such as: • Financial Risk – Profitability; Cash flow; Solvency; etc • Operating Risk – Timeliness of reporting to the Bank throughout the year; demonstrated compliance of Banking covenants & conditions; key person risks; Market strengths & weaknesses; compromised relationships with suppliers etc.

• Credit Risk – Strength/security of your cash inflow from your distribution network and the ability of your company ability to pay its creditors.

(Cash is king rather than land values!)

This is then “added” back up to give a credit rating of your business which has a direct impact on the your interest your business pays.

In addition to the “usual” Financial Statements that are required, the Bank will want to understand how your Financial Statements are calculated.

There is quite a bit of subjectivity in how

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this additional information is passed to the Bank. This is an opportunity to enhance your reputation with the Bank through preparing a high quality presentation and where it is important that your presentation looks professional and sounds professional. How can you do this?

The “Dark Art” of client review While the subtleties may vary between each the Bank, the principals remain the same.

Your Bank Representative prepares a report to be submitted to the Credit Team for approval. If the risk is above a per-determined limit, the report will be forwarded to a Credit Council to approve your funding for another year.

In this process, your Bank Representative actually “goes into bat for you” so the more information you can provide them the better they can do this.

The Credit Team and Credit Council are from a different department so they cannot be un-duly influenced by the Partners/Relationship Managers.

In some Banks if the reviews are

The Official Magazine of Wine Marlborough

not completed in a timely manner, it will personally impact the Partners/ Relationship Managers.

While your passion is critical for your business the annual review process requires dispassion.

The wine industry is different to other industries, and your winery business may be different to other winery businesses but if your winery requires Bank lending facilities it is still a business in the eyes of your Bank and must adhere to certain covenants and terms & conditions!

(Unless you can personally afford it, Banks typically don’t lend for expensive hobbies!)

There are not many industries in the world where Rapaura Rd (or Hawkesbury Rd) meets Wall Street! Many wine businesses are engaged in using derivative financial products that are typically used by mining companies and the Banks themselves in order to de-risk their own business, with arguably a lot less specialist knowledge as to how they work. It has been written many times in the financial press that “derivatives are

like a cut throat razor. You can shave with them if you know what you are doing or you can cut your own throat.”

Companies are a collection of skilled specialist people working interdependently together. You will most likely have employed specialist wine makers and specialist wine marketers. If you don’t have the skills in your team to be dispassionate about your business (or can’t afford to keep them on your payroll), and prepare for the review, bring them in when you need to.

“Weapon of choice” PowerPoint, Word or something else?

Your Bank Representative has many of these reviews to do and the work continues long after your meeting has concluded, so it is important that you get your points across correctly and quickly so they can complete their own recommendation paper for the review committee.

Whilst I worked in the Financial Services Industry, presentations for the Management Boards and “The Board” were predominately prepared in PowerPoint. This compels the preparer to think about the “story board” of the presentation to ensure the reader draws the correct conclusions and can digest large amounts of information quickly.

This is not to say that you cannot use another package to prepare your presentation. It’s just that in my many years I found that this was the most effective and appreciated means to convey the story to busy people.

Finally don’t forget to do a spell check and read your presentation aloud!

Spelling and grammatical errors are distracting and cause the reader to devalue your hard work.

Critical review on the prior year – short and sweet!

During the review, your Bank is looking

at your future not at your past. The overall focus of the presentation should be forward looking. That being said, it is important to demonstrate that you have identified the key issues in the preceding 12 months and learned from them. These issues should be supported by financial analysis and can be as simple as a comparison to budget or a “volume-rate” analysis. This demonstrates that your Management Team has an appreciation of the issues that confront your business and how you intend to respond to these.

It’s equally important to celebrate your successes as well! Tell your story loud and proud especially when your company performs per your forecast (within 5 - 10% variance). There are huge benefits derived from “walking the talk” as you build trust between your company and the Bank. Like the Wine industry, Financial Services is also about building relationships!

Budget/Forecast for the coming year – Talking about next years’ walk.

The use of a robust forecasting tool cannot be over- emphasised. This will make changes easier to implement and lend credibility to the overall forecast.

Start with the Sales forecast (Budgeting 101). Is it realistic? Is it achievable?

2011 is not the year to be trying to overreach and under deliver.

Comparisons or trend analysis, between the budget and the current year need to be made to support the forecast and the variations need to be explained. This is best through financial analysis of: a. Case (or bottle) sales per varietal b. Revenue per case (or bottle) for each varietal c. Case (or bottle) sales per market d. Revenue per case (or bottle) for each market Equally important is an analysis of, how much the marketing costs to support

these varietal and markets will be. To ensure accountability and to assist understanding of the sensitivity of each initiative, a breakdown of the incremental costs, benefits and case (or bottle) volumes will provide a satisfactory estimate.

Inventory surpluses, I suspect will be topical again this year. A simple analysis of each variety is: Opening Inventory + Estimated Vintage – Sales = Closing Inventory This is more easy to calculate after converting your vintage estimate, tank wine and barrelled wine into cases. How does the estimated closing inventory compare to the opening inventory? Any material variances indicate a production surplus or shortfall. Any negative value in the closing stock suggests a forecast error.

Expected commentary on this will outline the expected course of action you intend to take to deal with the surplus and the financial consequences. Eg Sell on the bulk market, sell as a second label etc The COGS build-up of each of your labels not only demonstrates that Management has an understanding of how the cost base but, provides a breakdown between sunk costs (up to and including vintage) and bottling and shipping costs.

Comparisons or trend analysis, between the budgeted General & Administrative expenses, and the current year need to be made to support the forecast and the variations need to be explained.

Similar to the marketing expenses above, to ensure accountability and to assist understanding of the sensitivity of each initiative, a breakdown of the capital items cost plus their incremental increase (or decrease) in operating costs and revenue benefits where appropriate.

Sensitivity analysis shows the impact of incremental change of various uncontrollable externalities. The most

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common sensitivity analysis is currency movement in key markets. Others include changes in the spot price: of grapes, bulk wine and bottles At the end of your report are your assumptions. Providing these will help others understand your presentation. Basic assumptions include: Tonnage by variety grown /purchased or sold, prices, FX rates, selling prices by market. At the risk of stating the obvious, these need to be credible. There need to be a reason why you are using each assumption!

Forecasting FX – Do you want to be a Currency Trader?

This is quite easy, don’t do it! Your Partner/ Relationship Manager can’t forecast exchange rates (and nor do they often believe the forecast rate provided by their own Economics departments) so neither should you. Any information presented based upon forecast Exchange rates will be met with scepticism bringing up some serious credibility issues with your presentation. Banks tend to hate their clients speculating with the money they have lent the client!

If you’re in the business of wine making and wine marketing, stick to what you know! Do not try and dabble in businesses you’re not a specialist in!

Exchange rates from a recent date should be used. More recent means more relevant. Exchange rate can be sourced from many credible websites such as the Reserve Bank of New Zealand’s statistics site.

In summary, to make this process go smoothly you need to offer: • A high quality presentation. It needs to look professional and be easily digestible.

• The document must be internally consistent so that if it says “a 10% increase in income” on page 2 this is consistent with other parts of the presentation. Remember, Bankers are logical people, they will look for logic in the story you’re telling them.

• Detailed analysis to support your conclusion that yours is a business that is worthy of re-investment for another year • Credible forecasting based on sound assumptions. If you’ve sold your total 2010 harvest for $90/case last year, is it realistic to increase this price or even use $90/case given competitive pressures? Let’s face it, as much as we would all like the Pound to increase in value, it is unlikely that it will increase in value to 0.4000 this year (although now I’ve put this in print it may make a liar of me!) so this shouldn’t be forecast. Incredible assumptions mean less-than credible forecasts.

• Consideration needs to be given to the uncontrollable

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external influences and hence scenario analysis.

• Accountability for the delivery of the plan and is supported by the Management Team. This means the Sales & Marketing Team support the sales forecast; the Viticulturist supports the yields estimates and the vineyard expenses etc.

Not only is the level of detail prescribed above what your Bank is looking for, going through this exercise will also be incredibly beneficial for your own understanding of your business. Having a good Budget (and Plan) puts a company a long way down the road of delivering the company strategy.

Tim McKendry is a Certified Practicing Accountant who has15 years in the Banking Industry (most recently at ANZ and National Australia Bank located in Melbourne). He has been based in Marlborough (in the wine industry) since 2009. Tim has held Senior Financial positions and worked extensively with the Credit Risk teams within the Banks and worked on the acquisition on the National Bank of New Zealand.

McAlpines Limited

Suppliers of

Quality Roundwood Contact:

Grant Cathcart Phone 03 313 8339 Fax 03 313 3767 Mobile 021 511 460 Email: roundwood@mcalpines.co.nz

Predicting Brix Levels Being able to predict just when your grapes will reach optimum Brix is a major bonus when it comes to preparing for harvest. Not only for the grower, but also the wineries.

As part of the GrapeFutures project, a prediction model on grape maturity was prepared by Dr Rob Beresford from Plant & Food Research. The model estimates when the sugar content of the grape berries reaches the target required for harvesting. It has been developed for white grape varieties, in particular Sauvignon Blanc.

Given the importance of being able to predict when target Brix levels in a vineyard will be reached, the model under development is remarkably simple and can be done at the touch of a button, along with regular grape juice sampling.

Via computer the grower can obtain weather information from a weather station close to the grape block. Brix measurements taken from the vineyard as the ripening progresses are used to calibrate the model for the chosen variety. The model then forecasts future Brix using the sampling data, plus the long term average temperatures, which simulates the rest of the season. As the season progresses and more information is fed into the model, the predictions become increasingly accurate.

Along with the sample Brix data, the grower will also need to input the date of 5% capfall; the target Brix for a specific grape block; normal or typical harvest Brix for that block; maturity type of the grape variety and the anticipated crop load at harvest.

Once all those factors have been fed into the model, the graph will give an indicative date for reaching target Brix.

(See example right)

Hawke’s Bay Sauvignon Blanc 2008-09 Sampled 23 February 2009 • Blue circles= four oBrix readings entered from pre-veraison to 23 February 2009 • Red triangles= model’s oBrix prediction using weather data up to the current day • Purple line= forecast oBrix progress using temperature averages for the site • Target of 21 oBrix is forecast to be reached on 1 April 2009

This research being undertaken for the GrapeFutures project has been funded by NZW, SSFF and Plant and Food Research. It is hoped to be available to all growers in time for the 2011/12 season.

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Wine Happenings A monthly list of events within the Marlborough wine industry.

To have your event included in next month’s calendar please email details to tessan@xtra.co.nz

FEBRUARY 10 – 12

New Zealand Syrah Workshop – Bayview Chateau, Tongariro. Details at www.syrahworkshop.co.nz

11-14

Waterfall Bay Food and Wine Festival - More details available at www.seresin.co.nz/dining or email Moir Laird moir@ seresin.co.nz

12:

Marlborough Wine Festival – Brancott Estate. 60 wineries, over 30 food sites and fantastic entertainment. Get your tickets now - www.ticketdirect.co.nz. More details available at www.marlboroughwinefestival.co.nz

21 – 27

New Zealand in a Glass Series, Melbourne, Sydney and Brisbane.

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More FM Winery Tour, starring Brooke Fraser, Opshop and Midnight Youth - Villa Maria Estate.

Gates open 5pm, concert starts at 6pm.

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Sydney International Wine Competition 2011, Banquet dinner and awards night – Sydney.

MARCH 27-29

ProWein International Trade Fair – Dusseldorf Germany

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APRIL 12

New Zealand Wine Fair – Beijing

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New Zealand Wine Fair – Shanghai

JUNE 19 – 23

Vinexpo 2011 – the 30th event held – Bordeaux France

TBA

GI Sub Regionality - What does it mean?

INSuRANCE BROkERS, RISk mANAgERS Previously Marlborough Insurance Brokers

Wayne D Wiffen ANZIIF (Snr Assc) FIBANZ, QPIB, CIP Tel: +64 3 578 0228 Cell: 027 281 3452 Fax: +64 3 546 8866 Email: wayne@mibl.co.nz PO Box 48, Blenheim, New Zealand Wayne D Wiffen

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News From Home and Away Mudhouse New Zealand Riesling Challenge

firearms as defined by the arms act 1983 or any act amending

In December we highlighted this inaugural event that saw 12

or replacing that act.)

winemakers from around the country, tasked with handcrafting

For the purposes of this plan percussive or explosive device

a Riesling wine picked from fruit from the same vineyard at

shall mean any device that is used to scare or disturb birds

the same time in 2010. There were no set

by generating a shock wave from percussion or an explosion

instructions – just craft the wine the way

thereby emitting noise.

you want to. All 12 were judged by the

Category B. Other devices (but excluding firearms), which

participating winemakers and Bob Campbell

generate noise that is used to scare or disturb birds.

MW. The winner of the event was Matt

For the full regulations contact the Marlborough District Council

Donaldson from Pegasus Bay Winery, who

– and remember to be considerate of neighbours during the

decided to have a bit of “experimental fun”

coming weeks.

with it.

“The fruit was in perfect condition but picked a little earlier than we do for our Pegasus Bay Riesling, so we thought we would have a little experimental fun and froze the bunches before gently pressing. This raised the degree Brix from 22 to 25. Fermentation was clean and cool and stopped according to taste to give a luscious classic style.”

The New Zealand Riesling Challenge is believed to be the first competition of its kind and Matt says it was a great promotion for the

FOR QUALITY HARVESTING WITH EXPERIENCED STAFF

variety. All the wines are now available to buy, as a mixed dozen. For more information visit; www.rieslingchallenge.co.nz Bird Scaring Regulations It’s that time of the year again where bird scaring becomes the norm. The following details cover regulations regarding bird scaring, provided by the Marlborough District Council.

Audible Bird Scaring Devices No Category A and B audible bird scaring device shall be operated between 7.00pm and 6.30am prior to the introduction of daylight saving and 8.00pm and 7.00am during daylight saving months.

Audible bird scaring device means any device that generates audible sounds waves used for scaring of birds.

Category A: Percussive or explosive devices (but excluding

Phone 578 6580 / 0274 441 404 41 St Leonards Road, Blenheim

Disclaimer: The views and articles that are expressed and appear in Winepress are those entirely those of contributors and in no way reflect the policy of the Marlborough Winegrowers. Any advice given, implied or suggested should be considered on its merits, and no responsibility can be taken for problems arising from the use of such information.

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