Gordon Rennie writes for The Scottish Farmer from Marlborough, the main wine growing region of New Zealand.
This is the ideal area to grow grapes but the cost-of-living crisis and poor weather are setting up new challenges.
The Wairau Valley is a broad, flat plain nestled between the Richmond Ranges to the north and the Wither Hills to the south.
The main towns are Blenheim and Renwick. The climate, the soils and an abundance of pure water from underground aquifers make this the best area in the world to grow Sauvignon Blanc grapes – 75% of all the grapes grown in NZ are grown here.
In 2023, Marlborough vineyards produced 394,000 tonnes and when it comes to yield, nothing can beat Sauvignon Blanc.
On the very best land, I have witnessed first-hand French-built grape harvesters gathering 18 tonnes per ha.
The grapes are then transported to one of the many wineries to be processed into wine.
The average delivered price for 2023 and 2024 is around $1800 per tonne, down from a peak of $2300 in 2007.
Some growers have the winery turn their grapes into bulk wine. Growers then sell this into the wider market and can expect to be paid $3 to $4 per litre.
One tonne of sauvignon blanc grapes will produce nine litres of wine.
Much of this bulk wine is shipped to be bottled in the UK, such as for supermarket brands. But be aware – this wine only has to contain a minimum of 85% of NZ wine.
There is no labelling requirement in the UK to state where the other 15% comes from.
Other challenges facing the wine industry here is the slump in global demand due to the cost-of-living crisis.
To compound this, it seems the younger generation prefers to buy pre-mixed alcopops in cans rather than wine.
Farming in all its shades is subject to more frequent adverse weather events and wine growing is no exception.
In Marlborough, very cold east winds arrived during pollination and led to poor grape set. With harvest imminent, the experts are now confident yields will be around 30% lower.
So, a 15-tonne crop last year may only yield 11.5 tonnes in 2024 and that is on the better land. A gross income of 11.5 x $1800, or $20,700, will hardly cover all costs. On the poorer land, 2024 is set to be pretty much a financial disaster.
On the other hand, global drinks giants like LVMH, which now owns Cloudy Bay, seem totally undaunted as it is in it for the long haul.
So where is the future for this iconic wine-growing region of NZ?
Quality brands such as Cloudy Bay which have marketing clout and the very big pockets of LVMH have a very secure future.
Good-quality vineyards in full production in the best areas are still valued at $330,000 per hectare. The opposite is true of the newer vineyards on the poorer land which were probably never really viable in the first place. Many of these are up for sale but there are no buyers.
Banks are reluctant to let them go for a song so interesting times lie ahead, but you do not have to travel to NZ to experience the best sauvignon blanc wines.
The experts tell me that Greywacke Sauvignon Blanc is every bit as good as Cloudy Bay and at under £20 a bottle, it is good value.
Years ago, a quiet revolution began with the planting of the first vines. Today over 79% of New Zealand’s grapes are grown in Marlborough – 29,654 hectares produce around 394,000 tonnes per annum.
The dominant variety in Marlborough is sauvignon blanc which accounts for 24,000ha – the balance is made up of pinot gris, chardonnay and pinot noir.
However, for yield, nothing beats sauvignon blanc – on the best soils here, yields can reach 18 tonnes per ha although the average is just over 13.
So turned out that Marlborough had the perfect climate and soils with an abundance of water for trickle irrigation.
Some years ago, one would have also seen apple orchards but today there is only one left as converting land into vineyards was so lucrative.
Even one year ago I noticed outlying dairy farms were being purchased to convert to grapes.
When you fly into Blenheim on a clear day, there is an endless vista of vineyards to be seen. Nestling between the Richmond Ranges to the north and the Wither Hills to the south lies the Wairau Valley – 79% of all NZ wine is produced here.
Since the first vines were planted 50 years ago, the total area today is 29,654 hectares producing 393,865 tonnes from the 2023 vintage.
If one is touring this area by car you can drive for 20 kilometres and see virtually nothing but grapes.
This area is growing each year as even dairy farms on the extremities of the wine-growing area are being purchased to be converted to sauvignon blanc grapes.
The New Zealand government has opened up the border to seasonal harvest workers, maintaining the vines, so today there is plenty of casual labour.
Total wine-growing area: 29,415ha
Sauvignon blanc: 23,834ha
Pinot noir: 2733ha
Pinot gris: 1238ha
Chardonnay: 1083ha
Others: 527ha
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