Christopher Adams

Christopher Adams is the Markets and Banking reporter for the New Zealand Herald

Rabobank spots new frontier for wine

Report points NZ winemakers to some surprising new markets.

A new report from Rabobank says Nigeria has the potential to become a lucrative export market for wine, but some New Zealand winemakers are yet to be convinced.

And according to Statistics NZ figures this country didn't export a single bottle of wine to the West African nation last year.

The report, titled "A new wine frontier", says that while China and South Korea are probably the most attractive emerging wine markets, Mexico, Poland, Brazil and Nigeria are "hidden gems" that could offer rich rewards, over the medium to long-term, to ambitious exporters.

Early exposure to these nascent markets would give firms hard-won experience and a head-start on their competition, said Rabobank food and agribusiness analyst Stephen Rannekleiv.

Tim Lightbourne, co-founder of Auckland's Invivo Wines, said the company - which made this year's Deloitte Fast 50 list of high-growth Kiwi firms - was already exporting its Sauvignon Blanc to Mexico, but Nigeria hadn't made it on to the firm's radar.

"I wouldn't rule [Nigeria] out but we'd need a pretty trustworthy distributor," Lightbourne said.

"You'd have to have the right partner."

Nigeria has the misfortune of being best-known in the West for corruption and global email scams and the report says companies considering doing business in Africa's most populous country need a high tolerance for risk.

But Nigerian wine imports have been growing at a compound annual rate of 16 per cent in recent years and the country's economy - the continent's second largest after South Africa - grew by about 7.4 per cent in 2011.

"With a population of approximately 170 million and large strategic petroleum reserves, Nigeria has a strong foundation for continued economic growth and increased demand for wine," the report said.

According to market research firm Aranca, Nigerian wine sales currently total $364 million annually and are expected to reach $450 million by 2015.

Stuart Smith, owner of Marlborough's Fairhall Downs Estate winery, said Nigeria was an interesting market but he would want "money up front" if his company did business there.

Lightbourne said his firm had been targeting the tourist market in Mexico for the past year and was also in talks with "potential partners" in Brazil.

"In the next six to 12 months we'd like to be in that market [Brazil]," he said.

The report said Mexico was proving lucrative for many suppliers.

"As well as enjoying a strong economy, the growth in the [Mexican] middle class population is leading to improved wine consumption trends and wine imports grew at a 20 per cent compound annual growth rate between 2006 and 2011," the report said.

"Similarly, imported wine volumes in Brazil grew by nearly 30 per cent in the four years from 2007 to 2011 due to growing interest in wine and limitations of domestic producers to match the quality of imports."

Lightbourne said Invivo was seeing strong demand for its products in Bulgaria, which suggested Poland could be a good market to enter.

Polish wine imports had seen strong growth, although pricing could be constrained in that market, the report said.


Overseas markets

Value of NZ wine exports in 2011

*Brazil $1.6m

*Mexico $321,472

*Poland $501,310

*Nigeria $0

Source: Statistics NZ

- NZ Herald

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