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Marlborough and Central Otago Viticulture Market Update

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Overall, the underlying industry confidence remains positive with strong grower and winery relationships at present.

We have seen strong growth in the wine industry with increased vineyard production and processing capacity, stronger demand from export markets and a lift in the contract grape price paid to growers.

This has resulted in vineyard values increasing with an active property market at the current time.

Over the past 15 years (2007-2022), the area of productive vineyards in New Zealand increased by 64 percent, from 25,355 to 41,603 hectares. The expectation is that this area will grow further with 1,000+ hectares to be planted within the next couple of years.

This will bring the total productive area in New Zealand to 42,708 hectares. This growth in vineyard area has been driven by strong overseas demand for premium quality New Zealand wine, particularly Sauvignon Blanc (over the past 10 years exports doubled to $2.1 billion), and improved grower returns in recent years.

While international demand for our wines remains strong, the challenges posed by the pandemic and the disruptions it caused with exporting have seen the total value of exports decline 3 percent over 2021.

Aside from the obvious quality and price considerations, we understand that the ability to offer continuity of supply at ‘large’ quantities is a very important part of maintaining market share.

Scale is becoming increasingly important for wine producers who are aiming to service the competitive export markets.

Smaller wineries have been impacted by the decline of hospitality and cellar door trade in New Zealand caused by the pandemic restrictions and border closures over the past two years. It is expected that these wineries will start to recover in 2022, albeit at lower levels compared to pre-COVID years, supported by increased foot traffic, the reopening of the international border and international tourism giving signs it is recovering.

The total volume of wine exports has declined only 1 percent for packaged wine while unpackaged wine exports have seen a decline of 23 percent. This is attributed to the low 2021 Marlborough Sauvignon Blanc harvest.

With production low, prices have seen consistent growth over the past couple of years with the packaged price increasing 4 percent to $9.03 per litre while the unpackaged white wine price increased 7 percent to $4.25 per litre over 2021.

2022_05 NZ Grape Production by Region_graph

Previous viticulture research:

Central Otago Viticulture Market Update  |  November 2021
Marlborough Viticulture Market Update | February 2021


 


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Marlborough and Central Otago Viticulture Market Update

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Tim Gifford

Director | Rural Valuation

Blenheim

Tim has 13 years property valuation experience and is based in our Blenheim office. Prior to joining CAPI in 2006 he worked as a valuer for Quotable Value based in Christchurch..

Since 2006, Tim’s client work has included viticulture, high country tenure review and rental valuations, pastoral valuations, lifestyle, specialised asset valuations and compensation for various infrastructure projects nationwide.

Tim’s viticulture experience includes the valuation of vineyards for financing, sale & purchase and rent setting purposes for a number of clients including Pernod Ricard, Indevin, Wither Hills, Cloudy Bay, Allan Scott Wines, Treasury Wine Estates, plus a number of others. Tim is also frequently engaged to provide valuation advice to most of the major banks. Having grown up and lived most of his life in Marlborough, Tim has in depth local knowledge of the region.

Tim has extensive experience in valuing large pastoral and high country properties throughout the South Island, either on behalf of Linz for tenure review or rent review purposes or for corporate and private landowners. Properties valued include Muller Station, Mt White, Mt Albert, Mt Creighton, Godley Peaks, Hossack, Glen Wye, Glenhope, Forest Range plus many more. Tim is designated as an assessor under Section 23P Crown Pastoral Land Act 1998 to provide rental assessments on Crown Pastoral Lease properties.

Compensation is another key area of expertise and Tim has provided property advice on a number of projects nationwide including Transpowers 400kV transmission line build through the Waikato, Central Plains irrigation scheme through Canterbury, land acquisitions for roading on behalf of the New Zealand Transport Agency as well as new transmission line easement assessments for various network operators throughout New Zealand.

Tim offers our clients excellent technical skills and market knowledge, together with a sound appreciation of both private and public sector imperatives. He plays a key role in our viticulture, pastoral and compensation valuation teams.

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Jack Powell

Associate Director | Rural Valuation

Blenheim

Jack has a strong rural background growing up in North Canterbury where he developed a range of skills which have aided him in his valuation career. 

Jack started working for the company in 2015 after graduating from Lincoln University, where he worked alongside our senior valuers gaining valuable experience. During this period Jack was involved in undertaking corporate dairy farm portfolio valuations for financial reporting, planning and potential acquisition purposes throughout Canterbury and the Waikato, as well as assisting in high country station tenure reviews.

In 2018 Jack completed his registration before taking time off to follow a professional rugby career in Russia. After returning in late 2019, Jack returned to the Rural Valuation profession. 

At the start of 2021 Jack relocated to our Blenheim office where he is now working alongside Tim Gifford. Since moving to Blenheim, Jack has been involved in a number of large scale 
vineyard valuations for finance and rental purposes as well as continuing to work within the dairy and pastoral sectors. 

In addition to Jack’s valuation work he is also a high-power user of all sorts of applications helping to create efficiencies within the Company by developing our modelling and database tools.

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