Creating value in Aotearoa New Zealand’s wine industry: opportunities to capitalise on ‘buying local’?

Abstract

The COVID-19 pandemic has caused severe disruption to Aotearoa New Zealand’s primary sector; global delays and increased shipping costs have impacted profit margins and cash flows, and caused logistical challenges. The impact of the pandemic on the wine industry has varied significantly, depending on wine production scale. For example, the wine sales of large producers, who have been able to benefit from supermarket distribution, have been largely unaffected, and in some cases, lockdown has had a net positive effect, with supermarkets and liquor stores being the only brick and mortar stores to remain open. Over 90% of wines produced in New Zealand are exported, and despite the challenging year, in 2020, these exports continued to grow. However, the majority of New Zealand’s 731 wine producers did not benefit during the pandemic period—in fact, changing consumption patterns caused substantial negative impacts.

The majority of the country’s wineries (87%) are classified as small producers, with more than half selling less than 500 cases of wine per year. These small producers have borne the brunt of the pandemic’s impact, which has led to concerns about their ongoing viability, with significant implications for regional economies and employment, as well as for New Zealand’s global reputation as a producer of high-quality wines created by boutique producers.