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New Zealand Wine’s Hot Streak Continues In 2016 With Double-Digit Volume, Value Growth

August 31, 2016

Following an eight-year run during which its sales essentially tripled, New Zealand wine continues its rapid rise in the U.S. market. In fact, the category’s growth is accelerating. For the 12 months ending June 30, 2016, New Zealand wine exports to the U.S. jumped by 14.4% to 6.85 million nine-liter cases, according to the New Zealand Winegrowers trade group, compared to a 10.1% advance in the year-earlier period.

The U.S. is now New Zealand’s biggest export market by volume, having overtaken the U.K. in fiscal 2016. The U.S. passed the U.K. as the export leader in value terms in fiscal 2015. And the value side for New Zealand wine in the U.S. is even more impressive than the volume numbers, thanks to trading-up trends. In fiscal 2016, New Zealand exports to the U.S. leapt by 23.7% to NZ$460.6 million ($336.7m).

Nine of top 10 New Zealand wine brands in the U.S. market enjoyed double-digit growth last year, according to Impact Databank. Five of them won Impact “Hot Brand” honors: Kim Crawford and Nobilo (Constellation Brands), Oyster Bay (Oyster Bay Wines USA), Starborough (E.&J. Gallo) and Matua (Treasury Wine Estates). All five have an average retail price above $10 a 750-ml. New Zealand’s average price of nearly $139 a case in U.S. food stores is the highest of any major wine import category (France is second, about 50 cents below New Zealand), according to IRI and Impact Databank.

New Zealand wine’s hot streak has been driven by Sauvignon Blanc, which accounts for more than 90% of its exports. Sauvignon Blanc now ranks second in the U.S. market among imported varietals by origin—behind only Italian Pinot Grigio—according to Impact Databank. Still, as SND reported earlier this year, several key importers are moving beyond Sauvignon Blanc—and secondary offering Pinot Noir—by embracing other varietals.

Globally, New Zealand’s wine exports were up by 10% in fiscal 2016 to NZ$1.57 billion ($1.15b), on 5% volume growth to 15.7 million cases. New Zealand Winegrowers says exports are on pace to surpass NZ$2 billion ($1.46b) by 2020. —Peter Zwiebach

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