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Vineyards & Viticulture

The recent decline in per capita domestic wine consumption in New Zealand (not to mention other countries where this has occurred) raises the obvious question: is the reduction across the board or variety specific? As one retail commentator recently mused, are we in New Zealand becoming slightly “sauvignoned out”? It is logical given our viticultural emphasis on the variety that the retail market share of sauvignon blanc might well be higher than in most of the countries we sell sauvignon blanc to (where there will be a larger overall selection of wines since the overall percentage of other imports will typically be much higher than it is here). I am not ignoring the fact that the percentage of sauvignon blanc we export from New Zealand is much higher than the proportion of any other varieties (or to express this in the reverse, we drink a much smaller proportion of the sauvignon blanc we produce than we do of any other variety). The issue is firstly whether the domestic market for sauvignon is close to saturation and, if so, whether future market trends will provide a useful lead indicator of the impact of changing preferences globally (whether or not sauvignon blanc’s local market share has actually diminished lately, given that I opened from the standpoint of a purely anecdotal remark and it is not necessarily proven to be the case).

The launching point for this discussion is the historic reality that wine sales globally have tended to be highly fashion or trend driven, for a wide variety of reasons. Styles and varietal preferences come and go over periods of time – often 1-2 decades. Even when a variety undergoes a recovery after a period of market neglect it is usually stylistically different to how it was previously. There may be an argument that generational change is a factor, for example. Climate change may also be an influence (as seasonal climate differences have long been proven to be an influence on many beverage markets).

Nevertheless, it is probably safe ground to suggest that at some point in the foreseeable the continuing global market demand (and therefore market share) of sauvignon blanc will stop and then start to decline. Unless global demand for wine continues to grow, diminishing market share will mean diminishing actual demand for sauvignon blanc. The rate at which these trends will affect New Zealand will be affected by global competition from other sauvignon blanc producers (which, in the immediate future most likely means our main international export market competitors France, Chile and South Africa).

Will demand for sauvignon blanc subside dramatically? Probably not. The nature of the demand that drives sauvignon blanc sales globally is that it seems to be adopted as a favourite variety of a certain proportion of drinkers in each market. This means that even if global fashion changes there will probably be a solid core of demand that will remain fairly constant for a prolonged period of time. This will then deplete slowly through natural “taste attrition”. The rate at which these drinkers switch to other varieties will depend on the rate at which newly fashionable varieties or styles shift from the low but important market shares driven by early adopters to the point of mass adoption. Most fashionable varieties never make the shift to mass adoption and so it is trite to try forecasting what it will be, but the likelihood of this process happening is inevitable.

The process can also be producer/marketer-driven to a certain extent. It is quite plausible that the current wide popularity of sauvignon blanc has been accentuated by the marketing efforts of New Zealand and other producers of the variety that have helped to increase its exposure to large numbers of drinkers. This is itself poses a risk and an opportunity, because once any style or variety reaches saturation in the market of its time, the marketers of that variety or style typically have two choices: diversify choices within those styles as a means of maintaining market share (something that has already started to happen with sauvignon blanc, or to shift marketing effort to the active promotion of replacements in order to be at the “ground floor” for future opportunities. The latter happens only very rarely in practice (in most other markets as well as in wine) because most producers only realise that the market has changed too late.

When the market changes, New Zealand will likely continue to make and sell far more sauvignon blanc than anything else for a considerable period of time. The first damage will be to the marginal growers – to those who planted in anticipation of ongoing growth – or to those existing producers who will lose out to the latecomers, possibly because of disadvantageous locations. In either case there will be growing overproduction and falling prices at the grape, bulk and bottled wine levels (except, most likely, at the very top end).

One of the factors that will influence this cycle will be the fact that not every producer will experience it in the same way. Even when overall market share is flattening or falling there will always be some market participants, large and small, who are still experiencing growth. Some of these may be so focused on their own success and need for product security that they are ignorant of the degree of change in the rest of the market and are continuing to plant vineyards that will not be in full production for several more years.

The process will then become one of adjustment and there are a number of reasons why this process could be unnecessarily painful. Market adjustment is always an unequal process. Some are affected more than others. Some react much earlier than others who do not. In a wine world where growers have the choice of pulling out vines or taking short cut and grafting onto existing plants, the key to adjustment is to have the options determined and in place before the need arises.

Diversification is an obvious solution, but it is problematic and much riskier if it has not been an ongoing process. This is one of New Zealand’s great problems. New Zealand nurseries have imported a growing number of increasingly high quality varietal plant materials. There is room for more yet, but it is a start. The problem is that, with a handful of exceptions, most of the work with new varieties is being done by small wineries and growers. The significance of this has been accentuated by the changes in ownership and marketing priorities of most of the larger wine companies that dominate production today.

While 25-30 years ago the likes of Montana (now Pernod Ricard), Corbans (now Lion), Matua Valley (now Treasury) and Nobilo (now Constellation) were active importers and triallers of new varieties, this emphasis has almost completely gone. The large wine companies primarily want sauvignon blanc, pinot gris and pinot noir for export markets. The corporate philosophy of most large producers eschews significant experimentation. Paradoxically these companies, which have the most at risk should the tide turn, should be the ones most advanced in trialling both the growing and winemaking development of new varieties. They are the ones doing a disservice to their shareholders because the time taken to catch up to any new trend can be as long as a decade (once the time is allowed for access to adequate quantities of buds, replanting or grafting over, getting new vines into production, learning the viticultural requirements for new varieties in different regions, sub-climates and soils, learning the individual winemaking process requirements and developing styles, not to mention trialling styles with the market).

Doing all of this from scratch after the market has changed is simply dumb strategy. (So is the arrogance of thinking you can just buy the expertise).

I do not ignore the fact that if larger producers were actively pursuing diversification experiments it could have mixed consequences for existing smaller experimenters. The positives could include increased access to more diverse sources of quality plant materials, the benefit of accelerated viticultural learning and the market exposure advantages when several producers are marketing a new variety rather than one producer doing it on their own. The negatives include the greater risk of geographical or stylistic cul de sacs being taken by small producers; or losing the uniqueness or marketing point of distinction that can be essential for small producers.

The strategy of diversification is multi-faceted. In the first instance it is about risk management but, if managed intelligently, it is also about ensuring or creating future growth options. In this respect it is an essential component of a value enhancement process. For this reason it is curious that shareholders and financiers alike fail to demand diversification programmes of some form or other from medium to large sized wine producers for whom the programmes would be a small part of existing asset and budget allocations.

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CBA is the reverse of ABC

Ten years ago in 2000, New Zealand not only grew more hectares of chardonnay than any other grape, but that year (for the last time) it was also the largest variety by tonnage harvested, about 30% of the total industry output.

Today, even though still the third largest variety by plantings, chardonnay seems almost a pariah grape, especially in Australia and New Zealand.

The coining of the acronym ABC – “anything but chardonnay” – has famously passed into the consumer conscious along with “if anyone orders merlot, I’m leaving…”. Both are, of course, exceptionally unfair generalisations justified only because each grape variety has developed a ubiquitous reputation for overly fruity or oaky, mass produced blandness. If ever a style deserved to go out of fashion it was this! However, the generalisation ignores the facts that in the right hands and from the right locations, both chardonnay and merlot provide pinnacle examples of wine.

The Australian wine industry has recognized this in the form of moves to re-invent chardonnay from a marketing perspective. The problem it faces is that Australian chardonnay – the highest production volume white wine grape – has two very different faces. It remains the white wine lynchpin of the hot irrigated hinterlands, where the possibility of producing good volumes of qualitatively unique or expressive wines seems remote. However, the industry has to keep trying to sell such wines, regardless of whether so doing undermines the marketing of Australia’s other chardonnay voice: classically Australian wines from cooler climate districts that faithfully reflect their sources with not only power but also elegance and a sense of style.

The names of Giaconda, Leeuwin, Shaw & Smith, Tiers, Yattarna and others are deservedly having their new day in the sun.

Ironically, New Zealand does not have the same issue of having to contend with huge volumes of cheaply grown chardonnay, even if it does produce more, relatively inexpensive volumes that are still difficult to sell. Even many of the Gisborne vineyards that have focused on production of grapes for lower-priced labels in the past (ignoring grapes grown in volume for sparkling wine), could potentially be harnessed to produce better with yields restrained.

What New Zealand also has, a result of its wide latitudes of largely maritime conditions, is almost exclusively cool climate chardonnay, from every district. There is no comparison to the warmer climate areas producing volume chardonnay in Australia, California, South Africa, or even the South of France.

What New Zealand doesn’t do widely enough is to plant its chardonnay on the best or ideal sites (thankfully there are exceptions), and to act as if it really is in the quality game. If we believe the ABC press, failure to perform becomes self-fulfilling.

How to Sell New Zealand Chardonnay

The first step is so simple but at the same time so difficult: make better wine.

There is an overwhelming sense that shines out of some of the larger published tastings of recent months (including Decanter and Cuisine magazine tastings) that chardonnay has not received due attention from many winemakers. Perceived to be a “hard sell”, it has become an obligatory part of a portfolio to satisfy those few poor souls who still ask for it. Perhaps the fact that it is considered a hard sell is one reason why it is these days often accorded a lower priority in the vineyard and the winery. In other words, it can become self-fulfilling.

The thing is that if grown with care, not over-cropped or over-ripened, and then made with restraint (not over-oaked or handled) by winemakers, Chardonnay can be one of the most emphatic varietal portrayers of its terroir (not unlike that other oft-misunderstood grape, riesling). Perhaps what chardonnay and riesling also have in common is abuse by larger volume wine producers who seem to believe that consumers are only interested if these wines fit into a specific profile with upfront fruit and sweetness on the palate – styles of wine that set out to remove their intrinsic and unique qualities.

What chardonnay needs then, is stylistic clarity. This is not to say that every region should try and make the same styles, as that would be wrong. However, chardonnay is competing with other varieties and styles that make a virtue of cool climate freshness. By ignoring or denying that it also can reflect these hallmarks chardonnay may yet be able to let its own statement be heard.

A word should also be added regarding the clonal make up of the New Zealand chardonnay vineyard. New Zealand chardonnay is still dominated, as it has been for most of the last two decades, by clones 15 and Mendoza. Together these fairly similarly behaved clones, noted for their propensity to “hen & chickens” bunches – favourable for big upfront flavours and sugars – make up about 55% of all chardonnay vines. The balance comprises a mix of Californian clones and occasional imports, although the revolution in chardonnay clones began with the importation of clone 95 which I believe makes a contribution to a disproportionate number of the younger among the leading wines here. With newer and highly reputed French clones 548, 121 and 1066 now in the country and being sought out by several growers for replanting purposes, the revolution will likely change even further.

A New Zealand Chardonnay Classification

Rather than resort to slogans or other desperate ways of attracting consumer attention I have felt that the interests of chardonnay might best be furthered by drawing attention above all to its qualities – especially when these are not at all out of keeping with “fashionable” modern wine styles.

By focussing on quality, above all, chardonnay’s value quotient can also be enhanced.

As a step toward this goal I felt it might be useful to assemble a classification of New Zealand’s top chardonnay labels. I also felt that this exercise might enhance discussion regarding some of the specific characteristics of different regions and their climate and soils, reflected in the wines.

Aware of the risks associated with personal taste, I have attempted this exercise by relying not just on my own (relatively wide) exposure to these wines, but also on checking for consensus with published notes from other much more experienced tasters, including Michael Cooper, Bob Campbell and Geoff Kelly.

I have adopted some other notable methodologies that might not be preferred by others.

1. I have organised my selection of a Top 50 into 3 star ranking categories, with the pinnacle being 3 stars, the next level 2 stars and the balance of New Zealand’s best chardonnays receiving 1 star.

2. I have selected these on a regional basis, such that they are represented from 9 different regions.

3. I have chosen no more than 1 label per producer, from each region. This does result in the situation where producers with wines from multiple regions (notably Villa Maria and Pernod Ricard as it was) have multiple labels selected, whereas other producers with several labels that might otherwise justify representation have just the sole selection named. In several cases I have had to debate which wine to include when others have presented strong cases. In my view, the best producers, as represented here, tend to make solid chardonnays through their range.

4. I have preferred labels where there have been several representative vintages of consistent quality, although I have reserved the right to make exceptions and have not been a slave to this rule.

5. I have also checked most, and in some cases used, market prices as a tool for representation but not necessarily of ranking.

6. Several labels have attracted lower rankings than have sometimes been attributed to these wines based on other tasters in the past on account of my personal impression that either styles have changed, standards have not been maintained or else simply that other labels have overtaken them on a straight comparative basis.

7. I expect arguments, not only over omissions (I hope there are plenty!) but also over the implied rankings. I suspect there may be fewer arguments (but not no arguments) over my list of 3 star wines than over the other categories! Here then is my classification of New Zealand’s Top 50 Chardonnays.

Region

***

**

*

       

Northland

 

Marsden Black Rocks

 

Auckland

Kumeu River Mates

Man O’ War Valhalla

Villa Maria Ihumatao

 

Te Whau

   

Gisborne

 

Millton Clos de Ste Anne

Kim Crawford SP Tietjens

   

Montana “O”

Odyssey Iliad Reserve

     

Spade Oak

     

TW Reserve

     

Villa Maria Reserve BF

Hawke’s Bay

Craggy Range Les Beaux Cailloux

Babich Irongate

CJ Pask Declaration

 

Sacred Hill Riflemans

Church Road TOM

Coopers Creek Swamp Res

 

Clearview Reserve

Morton Coniglio

Esk Valley Reserve

   

Te Mata Elston

Ngatarawa Alwyn

   

Trinity Hill Homage

Stonecroft

     

Villa Maria Waikahu

Wairarapa

Ata Rangi Craighall

Dry River

Martinborough Vineyard

   

Escarpment Kupe

Nga Waka Home Block

     

Palliser

Nelson

Neudorf Moutere

   

Marlborough

Seresin Reserve

Cloudy Bay

Foxes Island

   

Dog Point

John Forrest Collection

   

Fromm Clayvin

Saint Clair Omaka Reserve

   

Mahi Twin Valleys

Spy Valley Envoy

     

Staete Land

     

Villa Maria Reserve

Waipara

Bell Hill

Pegasus Bay Virtuoso

Black Estate

     

Greystone

     

Mountford

Central Otago

 

Felton Road Block 6

 

In truth I considered narrowing down a four star range with obvious contenders being Neudorf and Kumeu River. The only problem was that there were wines I feel can, on their day, argue a right to stand toe to toe with these icons – whether on long-term achievements, or on out and out pinnacle moments. It got too hard and I wimped out in favour of the perhaps oversized three star list above. In other words, there is a good argument for 2 tiers among these wines and I just wasn’t able enough to split them.

As a further aside, I find it interesting to note how many of the producers listed from Wairarapa south (but with the exception of Central Otago) are also among the leading pinot noir producers.

Overall my point is that the wines I have listed range from the merely excellent to the exciting. The best way to re-energise the market for chardonnay is to shift the perception of drinkers from stodgy sameness to intrigue. There is no better way to achieve this than by highlighting the excitement factor in the best chardonnays, and by giving consumers the tools to reliably find the styles that they want to drink by better clarifying regional taste characteristics.

Ultimately this means taking a leaf out of Australia’s book, as this is very much the strategy that Australia is trying to implement. In New Zealand the lack of the flabby hot climate chardonnays means we are not dealing with an immediate conflict to undermine such a programme. Most of all we need to get out and ask consumers who say they don’t like chardonnay, “well, have you actually tried one lately?”

Regional Chardonnay Notes

Classification Representation (and some additional useful information)

Region

Total

Hectares (2010)

Area Rank

Tonnes (2009)

Area Rank

Yield/ha

Northland

1

 

3

44

1

 

Auckland

4

122

1

490

1

4.4

Gisborne

7

1056

1

13283

1

12.6

Hawke’s Bay

14

1161

1

8787

2

7.6

Wairarapa

6

70

3

325

3

4.6

Nelson

1

121

3

909

3

7.5

Marlborough

11

1075

3

9959

3

9.3

Waipara

5

71

4

302

5

4.3

Central Otago

1

67

3

276

4

4.1

Total NZ

50

3865

3

34393

2

8.9

Northland

Northland carries a reputation of being warm and humid; less than ideal for growing grapes. This is a half truth. Parts of Northland are indeed warmer than most of the country in terms of accumulated degree days, and especially winter temperatures. However, Northland is also amongst the most maritime regions of the country with most vineyards quite close to the sea. It also has a wide and variable range of distinct sub climates and soil variations. The result is a very long growing season, often with greater disease risks despite being relatively windy, and occasionally being drought prone when the country is subject to predominantly south-westerly weather conditions. Chardonnay is the third most widely planted grape variety in the region.

Marsden Estate is located in Kerikeri on the East Coast. It has a decade long history of producing consistently high quality chardonnays under the Black Rocks label (winning several awards in the past). Chardonnay’s relatively early ripening means that, as in Gisborne, it is less at risk of autumn rain. The Kerikeri soils are predominantly free draining red volcanic clays, relatively unique in New Zealand and (unusually for the generally young soils of Northland) amongst the oldest soils in the country.

Other Northland flagbearers include Okahu Estate, Karikari Estate and Lochiel – all widely dispersed through the region.

Auckland

The wider Auckland region has for some time ridden Kumeu River’s coat-tails as a chardonnay producer, often viewed as a curiosity because of its high annual rainfall. However, like Northland, it seems to benefit from the relatively early ripening of chardonnay after an early start to the season, reducing some of the risk associated with the variety. Reduced frost risk also improves the economics of chardonnay as a variety in the northern regions. Moreover, despite Auckland’s top chardonnays coming from diverse corners of the region, all are on clay soils of historic volcanic origins. A problem I had here is that there are quite a few people who think Hunting Hill is even better than Mates. Close call (or should I have plumped for the impressive Coddington). Aside from Villa Maria’s individual style from Ihumatao, Waiheke is also starting to make a reputation with chardonnay. Producers from the Matakana district (such as Mahurangi River’s Field of Grace) are also starting to forge reputations with the variety.

Gisborne

Is Gisborne’s self-proclaimed status as New Zealand’s Chardonnay Capital a help or a hindrance to its reputation? It has advantages and disadvantages in growing the variety. Like other more northerly regions its soils are often clay-rich, ameliorating climate warmth, providing steady access to water through the growing season and providing palate breadth to the wines. Gisborne chardonnays have a naturally riper flavour profile than other regions and I am convinced that the soils are as much a factor as the climate (which can certainly get very warm up the Valley).

For all its reputation as a producer of large volumes of lower priced chardonnays such as the over 30 year old Montana Gisborne label (itself often an exceptional value for its quality), the region has also an established group of stars, as well as a latter day group of up and coming labels – some made elsewhere in the country but using grapes from established high quality growers.

The Montana “O” label may have an unclear future following the sale of Pernod Ricard’s Gisborne assets, but it has never really achieved the wider recognition it has deserved as a regional flagship drawing on some exceptional quality-managed vineyards. Other established producers such as Millton and Villa Maria have produced consistent exemplary examples for over two decades. Newer examples (relatively speaking) include the Tietjen Witters TW label (the same vineyards contributing to Kim Crawford’s SP Tietjen), Steve Voysey’s Spade Oak and Rebecca Salmond’s Odyssey Label. There are arguments for other candidates, including the likes of Matua’s top chardonnay Ararimu, usually made from Gisborne fruit.

Hawke’s Bay

Hawke’s Bay is geographically very close to Gisborne and often shares similar climatic factors (temperatures, sunshine and rainfall) but its chardonnays are quite distinctive despite being grown in a variety of different sub-regions , soils and exposures. Half of the 14 Hawke’s Bay chardonnays I have listed are grown in the Gimblett Gravels. The balance are spread between the Te Awanga coastal area, the Ngatarawa triangle, the hillside vineyards of Havelock North (with some limestone), the Tutaekuri River valley and inland toward Mangatahi. This says as much about how the industry in Hawke’s Bay is taking shape as it does about the individual sites or producers.

The three wines I have ranked highest all come with well established reputations that have not diminished in recent years. In my opinion the styles of both Sacred Hill’s Riflemans and Clearview Reserve, both of which showed as high-powered wines early in their existence, have added more complexity and verve to balance the power. Craggy Range’s Les Beaux Cailloux may have emerged more awkwardly but reflects the degree of commitment and investment expended by the company on all its top labels with an elegance that belies the ripeness that comes easily in the Gimblett Gravels.

Stylistically all of the other labels illustrate the Hawke’s Bay ability to produce fruit that can handle reasonable oak treatment and retain a fresh acid spine. This style is more linear than that of Gisborne and to a certain extent seems to reflect the usually gravelly and always free draining soils. Another point of note is that it seems to me Hawke’s Bay growers lead the country in terms of upgrading the chardonnay clonal material, in part a measure of the importance of chardonnay among the white grapes of the region. This suggests that even better will be achieved in future.

Wairarapa/Martinborough

Two things stand out in considering the Wairarapa contingent, all from Martinborough. One is the level of commitment these producers show toward chardonnay, something noticeable among those that did not make this list as well (including contenders such as Voss and Alana). The other feature is that Martinborough, like Hawke’s Bay and most of Marlborough, is based on gravel-based soils, in contrast to the clays that dominate in several other districts. I believe this influences the style of the wines in ways that cut across the climatic story. The standout, in my experience, is Ata Rangi for consistency, age ability, and stylistic clarity. Its chardonnays are paragons of elegance, in arguable contrast to the more powerful approach of Dry River. Most of the Martinborough wines seem to fit into a spectrum between the two, which to me makes the district extremely interesting and far from boring.

One other feature of the district is the relative age of its chardonnay vines, especially alongside more southerly districts.

Nelson

Neudorf rules, not only for style but also for consistency. While its style has evolved slightly with time, Neudorf continues to exemplify the role of sympathetic winemaking and the fact that all of the country’s best chardonnays do indeed age well. Neudorf’s Moutere vineyards are based on soils with a mix of clay and gravel. The Nelson climate, with high sunshine hours and moderate rainfall clearly plays its part. Interestingly, some of the other contender wines from the region, such as Greenhough’s Hope Vineyard, Te Mania Reserve and Waimea Bolitho are grown on the alluvial sols of the Waimea Plains.

Marlborough

Marlborough, it should be stated, is not just about stony river gravels, just as it is not only about sauvignon blanc. As one would expect for a large district with more producers than anywhere else, the chardonnays are produced in a range of soil types including the stony river gravels the region is famous for and the clay slopes of the hillsides, ranging also from near the sea to several kilometres inland. Interestingly my list of the best of Marlborough has very little representation from the Awatere Valley – whether this is because there is relatively little chardonnay grown in the much newer plantings of the Awatere or owing to other factors, is not clear to me. (Note that Vavasour and Villa Maria’s Taylor’s Pass were candidates considered).

The Marlborough style, as would be expected given its latitude, windiness and positioning is typically lighter than that further north and with more pronounced acidity. In keeping with most South Island chardonnays it is much more a statement of freshness and pristine flavours, with the best makers lending some gentle oak assistance but avoiding excessive oak uptake that can unbalance the style.

The “promotion” of Seresin may, I admit, be one of the more controversial aspects of my classification. I justify it on the basis of the depth, purity and personality of the wines – not something that can be said of many higher production competitors, with the fruit showing through and representing the soil aspects. Seresin’s chardonnay grapes come from both clay and gravel soils and so are not easily pigeonholed in that respect. The Seresin Reserve is also built to age, not really coming into its own until it has as much as five years bottle age, and it reflects conscientious selection policies.

In total 11 Marlborough chardonnays made my list. I know of several Marlborough producers who have grafted over older chardonnay vines, regarded as not worth the effort. To me the first point of note is the rise of newer producers putting a real effort into the variety, such as Dog Point and Mahi (Kevin Judd’s Greywacke will surely be of interest), while the others I have listed are largely established operations whose knowledge of the district and the variety is surely a large factor in their success.

Waipara

The Waipara district of North Canterbury, and surrounding areas, produces New Zealand’s most starkly unique style of chardonnay. While the base of the Waipara Valley features alluvial and limestone gravels washed down from the hills and mountains of the hinterland, the hills feature levels of limestone only occasionally encountered elsewhere. All of the wines I have listed have varying degrees of the distinctive mineral nose and flavour profile of limestone soils, sometimes quite reminiscent of the wines of Chablis in France, always matched to fine fruit and a clean spine of acid that together makes them very distinctive.

The wine I have ranked in front is the Bell Hill chardonnay, made in tiny quantities at Waikari and drawing widespread extraordinary reviews for its ethereal personality. I have not tried (and therefore can not comment on) the two even smaller production wines grown biodynamically at nearby Pyramid Valley.

Which is not to belittle the consistent quality being produced at the producers listed in the Waipara Valley proper. From the superb fruit and balance of the Pegasus Bay wines, exemplified by the slightly more concentrated qualities of Virtuoso as well as the excellent estate label, the beautifully constructed Greystone and Mountford, and the extreme minerality of Black Estate. It is interesting to note that until this year there was fractionally more chardonnay grown in Waipara than one of its signature grapes, Riesling. In my view it is quite wrong that these should have fallen so far behind sauvignon blanc in a region that shouts its terroir and is best suited to grapes that will reflect this.

Central Otago

Central Otago’s soils and climate are a clear departure from the rest of the country. The fact that chardonnay and pinot noir co-exist so well in Burgundy might have meant that more Central producers would make the effort with chardonnay (as occurred in Martinborough and Waipara, for example). This does not seem to have been the case as it languishes far behind in plantings – perhaps in part on account of the higher spring frost risk.

Felton Road has progressed markedly as a chardonnay producer over the last decade to earn its place with consistently stylish wines that highlight the minerality of the soil with a strong acid spine.

Other chardonnays from the region have impressed in the past, including examples from Michelle Richardson, Peregrine, Chard Farm, Akarua and Mt Difficulty, although seasonal variation appears very pronounced and it is not clear to me if the region understands the style that suits it or really puts the effort in.

Five Strategies for a More Sustainable and Profitable NZ Wine Industry

It may be entirely moot, indeed pointless, to propose that an industry might return to its “fine wine”/boutique roots if that proposal is not based on actual strategies, on a series of tangible steps, to achieve the objective. 

More importantly, the NZ wine industry has benefited immensely from its flirtation with “industrialisation”, especially where that may be blamed on our signature product – sauvignon blanc.  The explosion of sauvignon blanc production was more than just a chase for money.  It was based on demand, created by smart marketing and a process whereby New Zealanders actually learned lessons about world markets.  We gained networks of contacts. We received substantial inward investment from companies that recognised our values as well as our product.  We are much smarter/less ignorant regarding costs, product economics, pricing strategies – i.e. the fundamentals needed to survive in a global marketplace. This is critical in the sense that the industry is now a vastly larger beast than it was 10 or even 5 years ago – as we go about changing, we will still need the rest of the world on side with us; and we will continue to need to be smart enough to compete.

Losing the good things we have learned in a blind rush backward towards an illusory memory of a golden era (which really was not) would be a retrograde step.

These are the broad steps needed in unison to take a significant industry, farming over 30,000 hectares, capable of processing almost 300,000 tonnes of grapes, and exporting more than NZ$1 billion of wine, and changing its nature into one more likely to ensure the sustainability of the industry as a source of wealth and income to its members and to the wider economy.

Most of these can practically be implemented at any level of the industry, from an individual grower or winery through to a region, through to the country as a whole.  The intention is to achieve an industry that is stronger both in practical and economic terms, and is less vulnerable to external shocks or fashion changes.  Moreover, even the healthiest wine sectors of other countries are not without their own problems.  Even so, as a statement of a general target, we could do a lot better than to emulate a region such as Champagne – recognised the world over for its name, which stands for quality and luxury, yet produces wines in extraordinary volumes, often using ultra-modern technologies to do so, and which pays its growers grape prices that even our best growers today could only dream of.

The question is how to get there.

1. Upscaling what we have in the ground

New Zealand’s immediate potential is inextricably connected to the quality of what it has planted in the ground.  For the most part our vines are young, an obvious consequence of a last decade of extraordinary growth.  Some of the national vine stock has been marked by compromise, by the difficulty of obtaining the best quality clones and rootstocks in the past as demand has outweighed supply of top quality planting materials. There is still a material portion of our older vine stock affected by virus infections; the economics of these vines must look even worse with lower grape prices.

While we must be patient now and let the potential of our quality vineyards express itself naturally with age, where we have the wrong vines in the wrong places we must face this and continue to upgrade, to seek out better clones, better rootstocks, to plant using better trellising and with more quality oriented planting densities. As difficult as the concept may be at this point in time, the industry must not become afraid of investment – our competitors will not be.

For all the importance of improvement, the fact is that vine age is not something that can be rushed.  It is the single greatest impediment not simply to producing quality, but to being recognised for a quality focus.

The nature of the problem can be shown by comparing the national vineyard today with that of 10 years ago.  Based on national vineyard survey data more than 68% of the producing area was not there 10 years ago (excluding replanted and top grafted areas not apparent in the data).  Making that look worse, the age of our four most sought after grape varieties is much younger with the less than 10 year percentages of pinot noir at 76%, syrah 79%, sauvignon blanc 85% and pinot gris 91%.

In other words, most of what we sell the rest of the world is from young vines, while what we drink at home is actually much less so.

The message is that it will take time for our vines to age sufficiently to overcome this quality impediment, but we should not be shy of other means to improve the quality of what we can produce from what we presently have, whether through replanting part (setting the age process back), or through keeping yields in check in search of better fruit (able to be made into better wines that are more likely to attract a premium price than poor quality fruit that may as well be dumped in today’s market).

2. Expanding where there is potential (and shrinking where there is not?)

Have all of the potentially great sites for growing wine in New Zealand already been planted?  Frankly, to suggest that they have is ridiculous.  New high quality sites are continually being turned up in the never ending search for better.  That is how new regions such as Awatere, Martinborough, Central Otago, Waipara, Waitaki, Matakana, Clevedon, Ohau, Cheviot Hills and more come about.  Unique terroirs are because they are, not because they have been discovered.

Placing an overt or even implicit prohibition on searching for new and better would be an extraordinary error.  The NZ wine industry’s history is predominantly populated by pioneers; we can never stop history.

On the other hand, the planting frenzy in some regions over the last 10 years has resulted in extremely marginal sites being developed, sometimes for reasons more to do with property development and local zoning requirements rather than suitability for grape growing.  If we are to better balance the industry, removing vines that can never produce suitable quality or saleability might be preferable to the removal of potentially good sites.  That, unfortunately, may be wishful thinking.

3. Diversifying

Lack of diversity was ignored not so long ago.  Now it is widely recognised as one of the industry’s biggest issues – the degree of reliance especially on one grape, sauvignon blanc.  There are two main risks associated with lack of diversity: reputation (i.e. as a “one trick pony”) which may affect the market’s perception of the ability to do alternatives; and disproportionate downside risk if the areas of excess reliance go into decline (either in volumes – falling out of fashion – or values).

To give sauvignon blanc its due, it has given the industry recognition that might have been much harder to come by without it.  It has single-handedly brought in foreign investment, earned large profits and funded significant elements of the wider industry infrastructure that we have today.

It has also been responsible for developing New Zealand’s unique stylistic identity.

The problem is not reliance, but over-reliance. The death of sauvignon blanc as a category has been widely overstated.  Prices may have plummeted but the world is drinking more of it than ever.  But can we keep those consumers if prices rise?

One way of keeping those consumers is to offer them alternatives.  It is a process we have started, but not necessarily with full understanding of the consumers.  The main drinkers of our sauvignon blanc are, first and foremost, white wine drinkers (so making good red wines is not a strategy for keeping these customers).  New Zealand has long prided itself (until relatively recently) as being particularly strong as a producer of white wines.  Yet compared with most other significant producing countries of the world, our range of varieties of more than just a few hectares planted is extremely limited.

Another question is whether we can adjust the perception of New Zealand sauvignon blanc by increased stylistic segmentation.  This means not just hunting for super premium sauvignon icons, but active differentiation of Waipara, Central Otago and Hawke’s Bay sauvignon blanc styles from those of Marlborough and perhaps even actively promoting the distinctiveness of Awatere or Waihopai Valley fruit (by way of example) over “generic” Marlborough.

Nationally, improving and diversifying a clear portfolio of other quality varietal wines, both white and red is important from the perspective of diversifying industry and producer risk.  Nevertheless, we need to be clear about differentiating between wine styles that have potentially broader appeal (which sauvignon blanc has certainly gained) and those that are, by any definition, niche market prospects. The latter may not have the volume appeal, but may be able to command greater long-term consumer loyalty.  Pinot noir certainly comes under this latter category.  Syrah may do. Wines such as generic chardonnay and merlot, for example, do not unless consumers are given a reason to become attached to chardonnays or merlots that are resolutely of a specific place (as achieved by Burgundy or the Right Bank of Bordeaux, respectively).

4. Improving our credentials

Credentials are the cornerstone of marketing, but they start long before a product reaches the point of sale.

New Zealand is clearly conscious of this with long-term market strategies based on environmental qualities and sustainability.  Yet most producers know that having staked claims to this territory the risk of being exposed as not living up to the ideals is greatly increased.

It is an unfortunate irony that a key factor in our ability to produce the styles of wine that we do, and which contribute to the country’s international image, is also responsible for some of the difficulties from a viticultural perspective: New Zealand is a long, mountainous and mostly very maritime country situated in an ocean capable of profound climatic shifts.  We have warm and cool, damp and dry, not to mention wind and exposure to cyclonic conditions in some parts of the country.  There can be no single (or simple) prescription for successful and responsible viticulture in such circumstances.

Maybe rather than following the rest of the world’s prescriptions for what represents sustainability, and especially the care for the land, we should be investing funds in the science of improving New Zealand’s unique soils using uniquely New Zealand products to reflect uniquely New Zealand eco-systems (aka “terroir”), for example.

Sometimes we seem to hide from the facts in the message we send the rest of the world, stemming perhaps from a complex that the truth might be misconstrued.  We simply don’t have a “reliable” climate.  We have genuine vintage variations and should not be afraid to admit it.  Sometimes we struggle with conditions, but the whole world knows when regions of France, Italy and Germany are struggling with conditions too and it doesn’t harm their reputations. 

Clearly if we want our products to be appreciated and priced for quality there are other credentials that are at least as important as sustainability.  The subject of yields arises yet again, but this is merely one element of the overall package of how we send the message to the world that we really are good, conscientious, quality-oriented wine farmers.

In this respect the willingness of New Zealand wineries to embrace new marketing media to speak to the world’s consumers and opinion makers in a frank, open and honest way is an important lead.

5. Exploring new means of expression

While not strictly about “upscaling”, “diversifying” or “improving credentials”, there nevertheless would be value in a progressive shift of industry practices toward greater expression and individuality. The means of doing so will range from the vineyard to the winery.

In the vineyard individuality is, by definition, achieved by being different. Ultimately the key to vineyard expression is by making the choices – from what to plant through to how to grow and to harvest – that best reflect the needs and potential of the land.

Examples of practices in the winery could include: reduced levels of residual sweetness; greater use of wild yeast ferments, even if as blend components rather than totally wild ferments; and greater use of skin contact, especially for red wines, although not to the point of astringency from over-extraction (although sometimes one wonders if the winemakers’ definition of over-extraction has been slowly shifting to lower thresholds over the last decade, resulting in the sacrifice of structure and texture).

The Numbers Game

Just as the age of our vines is ultimately about numbers – about hectares and years, so too are all of the other aspects of the quest to upgrade the value of the industry. 

The “ideal” set of numbers will not be dictated by what we want to do, but by the market and by where we need to be within that market if we are to achieve the other numbers, those of dollars, income and value, that will make the industry economically sustainable and fit for future generations to follow.

In this respect, recognising market niches also means recognising that the size of opportunities is never infinite.  There is always a point where there can be too much.  We appear to have carelessly crossed this line in sauvignon blanc, for example.

That line needs to be pulled back to the market unless there are good, rational grounds (not wishful grounds) for believing that the global market will expand sufficiently in volume and value terms to accommodate New Zealand’s current and future production.  If indeed the global market is growing that way, we must also adjust our calculations to make allowance for the behaviour of our competitors.

Right now the formula does not look attractive, suggesting we may have somewhere between 15-25% too much sauvignon blanc in the ground that may not simply right itself with time. This would bring sauvignon blanc back down to around 50% of the total vineyard. We are almost certainly overplanted in some other varieties, although arguably not to the same extent – overplanting of other varieties has not specifically rebounded onto export returns or onto land values, for example, in anything like the same way.  Most issues associated with other varieties can be linked to marketing issues as much as to production volume.

The other part of the equation not discussed here is the role and place of brands as the conduit for selling New Zealand wine. That is for another day.

The 2003 “Seven Years On” aged pinot noir tasting at the Pinot Noir 2010 Conference has proven interestingly controversial for the industry.

As discussed in the session, the proven ability of a good quality fine wine to age well under cellaring does seem to correlate to some degree with its market pricing.  From a purely economic perspective, the opportunity to grow the New Zealand industry’s share of the top portion of the wine price pyramid and thereby improve financial returns may well be determined by future market perspectives on the ability of our best wines to age. 

One issue that has tended to be raised by way of both explanation, and also a degree of concern, is the age of the country’s pinot noir vinestock.  It is widely accepted that pinot noir, at least as much if not more than many other varieties, needs vine age to be able to produce wines with international standard qualities in terms of flavour complexity, etc.   It is surely not immaterial to note that top quality-oriented producers in the variety’s benchmark region of Burgundy will de-classify young vine wines rather than labelling them as Grand or Premier Cru under their top appellation wines.

It is also occasionally postulated that older vines are more likely to produce wines that will age well in bottle than younger vines do.

What is clear is that top Burgundies do age well, often for decades, so that if New Zealand seriously considers itself a qualitative threat to even premier cru level Burgundy it is not unreasonable to consider that it has to make progress on the aging front.

The 2003 tasting featured wines from four different districts.  The resulting assessment of ageability was controversial to say the least, with only a handful of the wines receiving at least some sort of consensus of plaudits as to their condition. Disregarding the other clouding issues (such as the impact of screwcaps versus corks – which appeared unclear on the samples of the day), one thing I have never heard mentioned prior to the “unclothing” of the wines and their relevant data was the fact that there might be considerable variation of vine age between the different wines.  Four of the 10 wines, including the two that seemed to attract the most overall compliments (Felton Road Block 5 and Pegasus Bay Prima Donna), were from vines with a minimum of 10 years’ age.

So to the statistics.  Using NZ Winegrowers annual vineyard survey data I have back calculated the age of vines planted over the last 10 years in the five largest pinot noir table wine regions: Wairarapa, Nelson, Marlborough, Waipara and Central Otago.

This data also illustrates the scale of potential production in each district (subject to regional variations, of course). 

Producing ha 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Wairarapa 101.0 139.2 205.4 309.0 414.3 448.5 434.9 452.0 462.2 462.1 464.6
Nelson 33.7 54.3 85.2 99.3 125.5 139.5 160.7 183.0 177.5 190.7 206.1
Marlborough 527.8 651.9 744.0 991.4 1251.6 1429.1 1517.9 1656.8 1737.8 1760.5 1779.8
Waipara 54.3 66.8 75.5 121.8 138.9 182.6 225.2 261.3 300.0 305.2 305.7
Central Otago 136.3 183.6 344.5 478.4 606.7 753.3 969.6 1104.1 1196.0 1196 1205.1
                       
Ann. Increment = Youngest vine age (ha)* 13+ 12 11 10 9 8 7 6 5 4 3
Wairarapa 101 38.2 66.2 103.6 105.3 34.2 -13.6 17.1 10.2 -0.1 2.5
Nelson 33.7 20.6 30.9 14.1 26.2 14.0 21.2 22.3 -5.5 13.2 15.4
Marlborough 527.8 124.1 92.1 247.4 260.2 177.5 88.8 138.9 81.0 22.7 19.3
Waipara 54.3 12.5 8.7 46.3 17.1 43.7 42.6 36.1 38.7 5.2 0.5
Central Otago 136.3 47.3 160.9 133.9 128.3 146.6 216.3 134.5 91.9 0 9.1
                       
As % Of Total PN Vines 13+ 12 11 10 9 8 7 6 5 4 3
Wairarapa 21.7% 8.2% 14.2% 22.3% 22.7% 7.4% -2.9% 3.7% 2.2% 0.0% 0.5%
Nelson 16.4% 10.0% 15.0% 6.8% 12.7% 6.8% 10.3% 10.8% -2.7% 6.4% 7.5%
Marlborough 29.7% 7.0% 5.2% 13.9% 14.6% 10.0% 5.0% 7.8% 4.6% 1.3% 1.1%
Waipara 17.8% 4.1% 2.8% 15.1% 5.6% 14.3% 13.9% 11.8% 12.7% 1.7% 0.2%
Central Otago 11.3% 3.9% 13.4% 11.1% 10.6% 12.2% 17.9% 11.2% 7.6% 0.0% 0.8%

 *For the purposes of estimating vine age an allowance of 3 years (from the spring of planting) has been added to the current year increment of producing vines as a proxy for the age of the vines entering production. Some vines may have produced a crop with 2 years age, although these would be exceptional.  There may also be instances of top grafting.  Other vines may, of course, enter production with even more age so that this measure is overall more likely to be on the low side.  Note that based on the survey information there have been odd periods where producing hectares appeared to decline.  This may be the net consequence of losses/replacements or of survey errors.  No adjustment has been made, although it is considered that any consequential errors are immaterial overall.

Something that must be remembered about this analysis is that the proportion of young vines will always appear highest at the end of the most rapid period of new plantings, and lower when the volume of new plantings has dipped for 2-3 years.

The consequence of this data may be observed in the following synopsis of the last four harvests and the change of the percentage of 10 year plus vines between harvest 2007 and harvest 2010.

 % Less than 10 years 2007 2008 2009 2010
Wairarapa 75.5% 69.5% 55.3% 33.5%
Nelson 72.4% 59.8% 51.2% 51.8%
Marlborough 63.4% 61.0% 57.1% 44.3%
Waipara 67.7% 76.3% 75.1% 60.2%
Central Otago 80.3% 84.0% 70.7% 60.3%

 Note that by this year the Wairarapa region has the lowest percentage of young vines.  That figure would be even lower  but for the large new plantings before and after the millenium in the Te Muna Road area and locations further from the Martinborough township by Escarpment, Craggy Range and others.

The fact that in 2007 Marlborough had the lowest proportion of younger vines reflects two factors: (1) a lesser overall planting rate of new pinot noir vines during the decade than in the other regions evaluated (in part, presumably, because pinot noir has been less attractive to plant than sauvignon blanc from the economic perspective of contract grape growers); and (2) the first two years’ data include grapes grown for sparkling wine.  However, during the last decade the feature of most new plantings in Marlborough has been the shift to the hillsides and to higher clay content soils (itself interesting, and perhaps ironic, in that most vineyards in Martinborough and Waiarapa are on the kind of free draining old riverbed gravel soils abundant in Marlborough).

Another factor that might be reflected on is that just under 10 years ago when the then Allied Domecq acquired Montana Wines, one of the factors it cited was the fact that within a short space of time Montana was set to become the single largest producer of pinot noir table wine in the world, and possibly the best placed to economically produce pinot noir wines that actually taste like pinot noir for a grape variety sorely missing an affordable yet authentic entry level.

The more recent growth in plantings in Central Otago has a number of explanations, not the least important of which is the fact that only 10 years’ ago there was still a view in the industry that it was only possible to plant on a small (i.e. uneconomic) scale in the region, and that the climatic conditions made it suited only for the brave (i.e. foolish).  There is a sense that the overall perspective on both issues has altered somewhat, so that in addition to newcomers some of the larger industry players have also started to move in to play “catch up” for fear of missing out.

New Zealand pinot noir is becoming of age.  However, this is a process that takes time, one year at a time in fact.  It can be observed from the data that the heaviest period of new planting (depending on the district) was from about 2001 to 2006 with an obvious slow down since.  This suggests that by 2016 the vast majority of New Zealand pinot noir will be from vines of 10 years age or more.  Of course there will be pockets of Marlborough, Waipara and Central Otago with 20 years+ of vine age, and several properties in Martinborough with vines over 30 years old.

Some Alternative Alternative Candidates (and Reasons Why)

Of the hundreds of white grape varieties of the world, the vast majority are too obscure to discuss or of very marginal interest. 

Of the largest producing varieties of the world, the likes of Airen and Ugni Blanc are generally considered to be bland quality warm climate grapes.  While this does not mean that New Zealand could not create something different from them, the reputation of these varieties may always stifle any potential they might have.

There are perhaps two dozen white varieties that have sufficient interest, including expert opinions that they are capable of producing high quality wines.  (I am sure there are others, but the identification and importation issues stretch the issue of suitability too far for immediate consideration).

Arguably all but one of them shares the likelihood of pronunciation problems for many potential drinkers.  (We may just need to be a little creative to sell them). Several are Italian in origin, reflecting the wide diversity of grapes grown in that country.  Several are also, therefore, what might be described as Mediterranean in origin.

In alphabetic order (*marks varieties that are already grown in small quantities in New Zealand although no wines labelled Marsanne, Rousanne or Gruner Veltliner have yet been marketed, other than Coopers Creek’s “The Groover”):

Albariño  Native to northwestern Spain and northern Portugal (and scarcely grown anywhere else), but unlike almost anything else in Iberian wine.  In its home environment it produces a wine of light to medium body with subtle and distinctive fruit characters, although whether because of winemaking or climate there is often a sense that the style of the grape could be “tightened up” in the right environment.  Given that most New Zealand wine regions are near the coast, the fact that albariño is thick skinned and well adapted to relatively damp maritime environments suggests that it could have wide potential uses in New Zealand.  Moreover, albariño wines are highly fashionable at home in the Spanish market, and also starting to be noticed in the UK and US markets. Australia was also claiming good results for a wine it thought was albariño, curiously growing it in hot dry climate areas rather than near the sea, until it was proven to be a different grape altogether, Savagnin blanc, a distant relation of gewürztraminer.

Arneis*  A number of New Zealand growers are beginning to experiment with Arneis and a small number of wines have appeared both as blends and as single varietal wines (most notably by Coopers Creek).  The natural aroma of arneis tends to be relatively subtle, rather than strikingly pronounced in the manner of sauvignon blanc.  Most trials to date have been in more northerly parts of the country, but wider experimentation may be necessary to establish where arneis may work best.

Fiano  A native of southern Italy where it produces wines with hints of complex and exotic fruits.  While New Zealand conditions are not at all like those of the warm Italian south, warmer parts of New Zealand might still be able to ripen the grapes and harness its natural acidity for a quite different style of wine.  Greco and Falanghina are other varieties of interest grown in the same region.  All are typically grown at altitude to maintain acidity, but may suit warmer sea level New Zealand locations.

Garganega  In its native Italy this is the variety that forms the core of Soave.  Unlike some other Italian varieties it does not appear to have been widely exported to other countries.  While the reputation of Soave has sometimes been one of blandness (which may explain lack of interest from California to trial it), in recent years a handful of top producers have provided hints of what this grape is capable of if handled with care and skill.  In a different climate with different sunlight and influences, what might be produced?

Gruner Veltliner*  A native of Austria and also very rare anywhere else in the world.  It produces a distinctive and distinguished medium to full bodied white wine that is increasingly fashionable in both Europe and in the US (where it is sometimes referred to as “gru-vee”).  It has already been planted experimentally in the more southerly growing regions, but may actually have wider possibilities.  Note that it is reputed to respond strongly to the soil conditions in which it is grown.

Marsanne*  A white grape from the Northern Rhone in France.  As it grows in similar environments to Syrah and Viognier, it seems reasonable to assume that it may produce corresponding results in New Zealand.  Often partnered with Rousanne (see below).

Petit Manseng  A native of south western France and known for producing distinctive wines in a range of styles from dry to very sweet.  Produces small, thick skinned berries that have a reputation for being weather hardy.  Petit manseng wines are noted for exotic fruit characters and retaining good levels of acidity.  May produce interesting results, even if very different in character from the often rustic French versions.

Rousanne*  Like marsanne a native of the Rhone.  Often partnered with that variety to add fruit interest as marsanne can produce quite heavy wine when grown in hot climates.  While rousanne can be more challenging to grow, especially its susceptibility to powdery mildew, it may prove of considerable interest in warmer New Zealand sites.

Verdelho*  A native of the island of Madeira, its name indicates that it is known for its small green berries.  It is also widely grown in Australia where its high natural acidity is a virtue.  A small number of growers in New Zealand are experimenting with it and Esk Valley has produced some interesting wines.  The nature of the grape suggests that it may be limited only to the warmest locations in New Zealand.  Internationally it is regarded as being relatively neutral in flavour, although Australia seems to think of it as an aromatic variety.  It is sometimes assumed that Verdelho is the same as the highly fashionable Verdejo in Spain (which might perhaps even more interesting in its own right as it is often blended with sauvignon blanc), although it appears that what the Spanish know as Godello is more likely the same grape.

Vermentino  Vermentino is best known for medium to full-bodied dry wines produced in the South of France (where it is sometimes known as Rolle), on Corsica, on Sardinia and along the Ligurian and Tuscan coastal regions of Italy.  It is a thick skinned variety that has adapted to maritime conditions and is able to produce wines with structure and with distinctive fruit flavours even at relatively high yields (reminiscent of sauvignon blanc in this regard).  In Australia it is surprisingly grown largely in warm dry inland conditions, but it is the maritime origins, plus the relatively unsophisticated way it is largely made and marketed in its European home, that suggest it is an opportunity well worth examining in New Zealand.

Vernaccia  There are several probably very different Italian varieties with the name Vernaccia.  The most well known is that grown in Tuscany, which is responsible for the wine Vernaccia di San Gimignano, and this appears to produce the most interesting wine in the hands of quality-oriented producers.

And The Other Sauvignon Blanc Challenge is…

While it is high time for the search for the next sauvignon blanc to begin in earnest (and not just a re-run of the same old candidates), challenges remain for sauvignon blanc itself.

One challenge is guarding our market space from increasing predation by South African and Chilean producers envious of our market position.  In this there is an element of being smarter with our brand positioning and never resting on our laurels.  Lower crop yields in the short-term may serve not only to bring supply and demand closer into balance, but also to help maintain a qualitative edge.

However, the other challenge may be trickier.  While we in New Zealand may choose to believe the extensive press that suggests New Zealand is the global benchmark for sauvignon blanc, and while our market position is clearly reflected in our high average prices in overseas markets, the reality remains that we do not come even close to producing the highest priced sauvignon blanc pinnacle or icon wines.  Several French producers from the Loire and Bordeaux sell their best product for prices far in excess of the highest priced New Zealand wines. 

So one challenge may yet be to produce a true pinnacle sauvignon blanc wine that is still distinctively New Zealand in character while undeniably an international star.  Several Marlborough wineries have special bottlings lavished with extra care and attention in the search for complexity, and are starting to indicate greater aging potential than the stock Marlborough sauvignon blanc intended for early drinking, but it is abundantly clear that there is still a way to go.

It may be that this is a marketing challenge as much as a winemaking challenge.

What are the desirable characteristics of an alternative grape variety?

1. Fruit interest (and potential in New Zealand climatic conditions)

Sauvignon blanc (not to mention Pinot Noir) has highlighted something about New Zealand:  we could take a grape variety that occasionally shines in other countries but often produces dull or uninteresting wines and, thanks to our climate, sunshine and know how, add a whole new dimension to how that variety is perceived in the world market.

Following the 1970s theory that New Zealand should focus on Germanic grape varieties, we have tried to do similarly with riesling, pinot gris, gewürztraminer (and only more recently viognier) but never really stamped an authoratively different style on these grapes (despite some undoubted success stories along the way).

While not saying we will never make such a mark with these varieties, we know we are up against stiff competition from those overseas originating regions that do not take their product for granted (in the same way that, arguably, the Loire Valley did before Marlborough sauvignon blanc burst upon the scene).

Aside from viognier, all of the varieties mentioned above are northern European in origin (including pinot gris, despite its importance in Italy); all are noted for pronounced flavour (and in some cases fresh acidity) in their more northerly homelands, and so arguably should not be considered quite such obvious candidates for “New Zealand-isation”, except perhaps in Southern districts.

2. Marketability

Marketability is what it’s really all about.  Taking a distinctive product and making the world want it above any others.

Needless to say this is much easier said than done.

However, there are perhaps already a few clues in the market place.  For example, there are a number of varieties still hardly grown outside of their home regions overseas but which are sought after in their own countries for reasons of flavour and distinctiveness, and are just starting to find a wider market elsewhere. 

The opportunity lies in the fact that the rest of the world has little idea how these varieties might taste if grown elsewhere, such as in New Zealand conditions.

3. Economic yields

The economic equation which drives Marlborough sauvignon blanc land values is not just the price paid for each bottle (which is better than quaffing, but definitely not Napa or Burgundy).  It is the yield of grapes that can be produced from each hectare of vines and yet still produce a qualitatively distinctive product.

Marlborough sauvignon blanc is the product of a recipe of water, sunshine, soils and sufficiently reliable weather that allow both volumes and quality to be maintained together.  Even within Marlborough not every variety provided with the same resources will produce the same economic return.  With pinot noir the compensation for the lower yields, which are regarded as essential to retain varietal fruit characters, is the higher pricing of the bottled product in a very specialised market niche.

Accordingly, from an economic perspective a key attribute that will either justify more widespread diversification from sauvignon blanc in Marlborough, or that with time may add significant value to land and resources in other regions, is whether distinctive wine can be made at adequate yields.

There are candidates.

4. Time and the availability of healthy planting material

The hardest one of all?  It’s not just that it takes 3-4 years to get a reasonable crop from new plantings, but the fact that for new varietal planting material it may take three years to get through quarantine to find out for sure that the genetic sources are healthy and free from virus or other diseases.  Then it may take several more years to bulk up the available materials so that there are enough buds harvestable for widespread planting.

Maybe it was the case in the past, looking at some of the older genetic material in the country, but today there is no room for short cuts.

This means that the likeliest sources of plant materials to import will be highly reputed international nursery operations with strong systems to ensure quality product.  Even so, there have been instances of imports from reputable sources that have still had problems.

In practical terms, this probably means that it may be at least 10-12 years before there will be sufficient material from any new varieties to reach the point of mass plantings, and a further 3 years before there are the volumes of wine to justify serious international marketing effort (as distinct from showing off small volume wines).

If one considers the commercial history of New Zealand sauvignon blanc, from the first experimentation at Matua Valley, to the first Montana plantings in Marlborough and the first releases of its Marlborough label in1978, to the successes of Hunters in the early 1980s and later of Cloudy Bay from 1985, the fact is that despite taking over 10 years from planting to making the world sit up and take notice there would still be more than another decade before sauvignon blanc began to dominate plantings in the Marlborough Region to the point of making up more than half of all producing planted area in 2002.

Nationwide, sauvignon blanc did not pass chardonnay in terms of crop size until 1999 or producing vineyard area until 2002.

Hopefully we are smarter enough today and could short cut the process of producing world-scale volumes of “the next big thing” by close to a decade from the time it took sauvignon blanc to get there.

The first question is then:  will at least one (or hopefully more) of the new varieties stack up as a distinctive, quality product that the world’s consumers will fall over themselves to get hold of?

The second question, no less important is: is the industry likely to be able to find the investment capital to convert such an opportunity into a reality, into a New Zealand success story?  We estimate that the capital cost in 2008 dollars to introduce a new variety and to expand production to 4,500 ha (i.e. approximately half of the 2007 Marlborough hectares) for between 2.5 and 3.5 million cases production depending on which variety and where planted, to be approximately NZ $630 million.  This assumes that all land is purchased for planting, and at rates that will rise over time as production becomes more valuable, but not as far as current Marlborough bare land price levels.

The Usual Suspects – Can they make it big?

Gewürztraminer  While always casting an eye toward the Alsace model, New Zealand has produced some excellent gewürztraminers over the last three decades, and a handful of producers have devoted the time and effort to get good results, most notably Nick Nobilo’s Vinoptima project in Gisborne.  The best results to date have been produced in Gisborne, Martinborough and Marlborough.  Can it make it big?  The downside of gewürztraminer is that it is a grape with almost too much personality and, arguably, a lack of subtle complexity.  It is never a refreshing style of wine, nor is it a clearly food oriented variety.  As a consequence it is not difficult to conclude that it will always be a niche wine style with a limited market.  This may be highly conducive to producing attractive returns for a small number of devoted exponents, but is not conducive to wide scale plantings. To make matters worse (from a mass planting perspective) it is a notoriously variable cropper owing to sensitivity over flowering.

Pinot Gris  Pinot Gris has been identified by others as a candidate.  It is already a popular grape in many markets.  Unfortunately there are many very different styles produced internationally, resulting in a degree of consumer confusion, and New Zealand is perhaps a reflection of this problem.  Italian pinot grigio, which is very un-New Zealand-like, has brand profile and is selling well internationally.  Similarly, Oregon pinot gris is still relatively fashionable in the United States.  It is not clear whether Alsace pinot gris has benefitted or suffered from the banning of its old use of the name Tokay d’Alsace, although top examples are probably the best pinot gris wines in the world today.  So how does one break into this market?  A distinctive product would help, but this is not something that is happening, with New Zealand pinot gris wines coming in a confusingly wide range of styles and levels of sweetness.  While exports seem to be rising strongly (from a low base), they are still small in the global context and it is hard to assess what the potential truly is.

Riesling  The riesling renaissance has been forecast for longer than most people in the wine industry can remember.  Wine writers, commentators and makers never cease to argue over which of riesling or chardonnay is the greatest white wine grape.  However, how does one stand out as a producer when the quality of top German, Austrian and Alsatian producers is so high, not to mention the distinctive dry riesling styles of South Australia’s Clare and Eden Valleys, and when New Zealand riesling still seems to have an identity crisis?  Moreover, in market terms just how real is the riesling renaissance?

Viognier  To some it is the new fashion statement.  There can be no doubt that good viognier can be quite alluring, with both full body and a very pronounced fruit aroma.  It deserves to be popular, but how popular could it be?  The problems are clear and, ultimately, limiting.  The name viognier is confusing to the uninitiated (although this need not be a problem since few people outside of France take the trouble to pronounce “sauvignon”).  Also, “good” viognier is not a light, refreshing wine style able to pair with a wide variety of foods.  Finally, viognier is a notoriously difficult grape to grow and get good consistent crops.  This almost certainly consigns it to a quality supporting actor role.

Which varieties have we omitted (perhaps unfairly)? 

Chardonnay is the obvious one.  Several New Zealand chardonnays have won strong reputations over the years and are highly regarded internationally.  More than one New Zealand winery may well regard chardonnay as its strongest offering, with Kumeu River producing as many as six different bottlings now, but nationwide there is a huge diversity of styles.  Moreover, chardonnay is grown to a very high standard in many different countries, most of which are still struggling in the qualitative (and price) wake of the very top White Burgundies.  If some of the most successful chardonnays today are made in a fresher (not overblown) style that is clearly suited to New Zealand’s climate, then the prospects for staking a claim to a respectable share of the market should not be underestimated, but the prospects for New Zealand becoming a global benchmark seem remote, and the fact that the rate of plantings has subsided is probably indicative.

Other varieties such as chenin blanc and pinot blanc have also produced some useful examples over more than 20 years in New Zealand but, despite the fact that chenin blanc especially shares a Loire heritage with sauvignon blanc, neither has suggested that New Zealand conditions could embue them with particular qualities that would allow them to stand out from the pack internationally.

Marlborough sauvignon blanc is one of a number of wine styles that has prospered from a global shift toward more refreshing white wines around the world.  However, should this shift accelerate, Marlborough sauvignon blanc may instead suffer from its limitations.  Should consumers lured to wine by sauvignon blanc’s zip of fresh and abundant flavour start to want to try other alternatives, where is New Zealand’s Plan B?

The world red wine market is full of variety, stylistic as well as varietal.  If the world wants more red wine then there is a veritable ocean of alternatives from proven quality sources in several countries.  There is the stylistic spectrum from ethereal pinot noir to more austere, majestic cabernet to fruit driven shiraz to over the top zinfandel with a host of world renowned merlots, brunellos, nebbiolos, malbecs and other not so obscurities in between.

The global trade within the white wine world, by comparison, would largely re-adjust within its existing portfolio of choices.  Most of the variety tends to be in varieties that are largely for local consumption with far less breadth of market development.

However, were the world to shift focus more intensely toward whites, not inconceivable in the event of climatic warming, we believe this would expose the stylistic cloisters of the white wine world.  From a varietal perspective a far smaller varietal core dominates white wine sales, and this is what would lead to risk if there were a global search for suitable varieties to replace red grapes currently planted in warmer climate regions.

In a world clamouring for new tastes, for the latest Austrian gru-vee or Galician Albariño, where would New Zealand sit?

Given that New Zealand grows grapes on the knife edge that should be expected of a maritime climate with significant wind exposure and also marked seasonal variation in terms of wet or dry, warm or cool years through most of its length there should be the ability to do justice to a wide variety of varieties.  The surrounding ocean nullifies the worst of our temperature exposure, but we nevertheless often forget that New Zealand’s latitude ranges from the equivalent of Burgundy to Morocco.

The Role of Sauvignon Blanc

Sauvignon Blanc is today unquestioned as the cornerstone of the New Zealand wine industry.  The industry is blessed by the fact that sauvignon blanc has found a “sweet spot” in the Marlborough Region. 

It is the industry’s strength and its weakness.

Even when there seemed no end within sight for the world’s demand for Marlborough Sauvignon Blanc, there were voices within the New Zealand wine industry drawing attention to the hows and wherefores in the event world demand is sated, or the possibility of competitor market share ingress into Marlborough’s higher value niche.

New Zealand and Marlborough’s good fortune has been aided by the fact that the strongest growth in demand in most of the major wine consuming countries is in the categories of light and refreshing white and rosé style wines.  Sauvignon blanc is just one of these (as is German Riesling, Italian pinot grigio and a number of more exotic European and Mediterranean varieties). 

Sauvignon blanc is not the only one that is clearly “in fashion”, and this should provide some comfort that the current position is not purely fashion, but rather an adjustment back from the heavy shift to reds in many markets during the early to mid 1990s at the same time as the world appreciates the worth of lighter styles in warmer climatic conditions.

However, the desire for the industry to diversify its exposure appears to have lost urgency as overproduction has led to discounting and a survival mentality takes hold, rather than a mood for future planning.  All talk has shifted to reducing yields and stopping new planting, rather than investigating some of the potential alternatives and diversification from the industry exposure to “sauvignon risk”.

The Search for a New Sauvignon Blanc

 For all that there are thousands of grape varieties in the world, the number that might be considered genuine prospects is not large.  It is clear that there is far more experimentation going on in the search for alternative red varieties than alternative whites – a common theme in most New World countries.

 Among white varieties there is more likely to be a candidate for “the great new New Zealand wine”, a variety on which to build a world-dominating reputation.  Without gaining such a reputation for a new variety, chances are that the country will instead have an also-ran reputation and not attract serious investment capital to grow a new niche.

Another consideration in the search for new varieties is the fact that there are many regions in New Zealand other than Marlborough.  Just because Marlborough remains the clear “sweet spot” for sauvignon blanc, does not mean that it is necessarily the best potential location for other varieties.  In fact some of the most interesting possibilities may be varieties more suited to North Island regions where there may also be the land resources to grow plantings without “competing” with sauvignon blanc.

 Are the varieties of the future already growing in New Zealand?  Perhaps, but then again, perhaps not.

 To date the focus for the best candidates has been on a small group of varieties that have already been growing in New Zealand on a large or small basis for many years.  This list includes:

  • Pinot Gris
  • Riesling
  • Gewurztraminer
  • Viognier         

Smaller areas have been planted for some time now of other newer varieties, most on a test basis, including:

  • Pinot Blanc
  • Verdelho
  • Rousanne

 Other varieties, some older (such as chenin blanc) and some relatively newer, are either in decline or not showing any immediate likelihood of growing, according to NZ Winegrowers vineyard surveys.  In some cases this may be either because there is no obvious market for them, and in other cases there is perhaps an unwillingness by winemakers to invest the time and effort in developing winning styles (or perhaps simply an unwillingness to be diverted from the business of making money from sauvignon blanc).