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New Zealand Wine Volume Soars, Bucking Market Trends With Higher-End Brands

May 5, 2011

New Zealand wine is rising fast in the U.S. market, with most of its top-selling brands achieving double-digit growth in a challenging environment despite their relatively high retail prices. Shipments of New Zealand wine to the U.S. surged by nearly 40% to 3.5 million nine-liter cases in 2010, according to Impact Databank, and have more than doubled since 2005.

“New Zealand wines continue to be quality-driven and specialized,” says Jay Wright, president of Constellation Wines North America. “And the market is still underdeveloped, as Pinot Grigio and Pinot Noir still have plenty of upside.” While Sauvignon Blanc still dominates New Zealand wine sales in the U.S.—comprising more than 80% of category volume—New Zealand Pinot Noir and Pinot Grigio are on the rise, advancing by 42% and 8% last year, respectively.

Constellation owns three of the top four New Zealand wines in the U.S. market: category leader Kim Crawford—with an average retail price of more than $16 per 750ml—as well as Nobilo ($11.50) and Monkey Bay ($9.75). New Zealand’s other top sellers include Oyster Bay, Brancott and Matua Valley—all priced around $11-$13 per 750ml. The U.S. imported wine market’s retail average is roughly $9.

Matua Valley, owned by Treasury Wine Estates, joined the 100,000-case club after sales jumped by 23% last year. “We expect that growth trajectory to continue throughout 2011,” says Francesca Schuler, Treasury’s chief marketing officer. The top priority for Matua is boosting distribution. Matua has been performing well on- and off-premise, with both channels showing double-digit growth. “Off-premise sales are growing at 33%. On-premise sales are up 11% and are beginning to represent a larger portion of the brand’s channel mix,” Schuler adds.

WJ Deutsch & Sons has a new contender from New Zealand, The Crossings ($16), which has been growing at double-digit rates from a small base. Deutsch is also launching another New Zealand brand, Nine Walks, this spring. That label debuts with a 2010 Sauvignon Blanc ($11) from Marlborough, and Deutsch CEO Peter Deutsch sees considerable promise. “New Zealand’s trends are similar to what’s happening with Argentina. These two countries, which are focused primarily on one varietal, see the U.S. as a real opportunity,” he says. “They’re taking advantage of that opportunity in a targeted way. The market has seen the success of that strategy.”

Leading New Zealand Table Wine Brands
(thousands of nine-liter case depletions)
Percent Change
Brand Importer 2008 2009 2010 2008-2009 2009-2010
Kim Crawford Constellation 298 349 389 17.1% 11.5%
Nobilo Constellation 317 276 257 -12.9% -6.9%
Oyster Bay Delegat USA 155 190 246 22.6% 29.5%
Monkey Bay Constellation 162 165 184 1.9% 11.5%
Brancott Pernod Ricard USA 140 146 142 4.3% -2.7%
Matua Valley Treasury Wine Estates Americas 85 93 114 9.4% 22.6%
Total Leading Brands 1,157 1,219 1,332 5.4% 9.3%
Source: IMPACT DATABANK
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