Minister for Primary Industries Nathan Guy says $17 million will be invested into a research and development project to produce low-calorie, low-alcohol wine.
The project, called "Lifestyle Wines", is a Primary Growth Partnership between the wine industry and Ministry for Primary Industries and will be the largest R&D programme ever conducted by New Zealand's viticulture sector.
"A total investment of $16.97 million has been secured for the programme, with MPI committing $8.13 million over seven years and the balance coming from industry partners as a mixture of cash and in-kind contributions," Guy said in a statement.
He said the research would focus on natural production techniques, which would give New Zealand wineries a point of difference over other products on the market that used fruit juice or manufacturing techniques to lower alcohol content.
Reducing sunlight exposure to grapes and early harvesting can reduce alcohol and calorie-content in wine.
"This is a great example of the primary industries and government working together to support research and development and create high quality, value-added products. It will be major boost to the collective brand of New Zealand wine," Guy said.
New Zealand Winegrowers chief executive Philip Gregan said the project would capitalise on domestic and international demand for high quality, lower calorie and lower alcohol wine.
"Our point of difference will be producing premium wines that can be naturally produced using sustainable viticultural techniques and native yeasts - providing an important point of difference to existing processing methods," Gregan said. "The programme will produce tangible outcomes for the grape and wine industry and the economy as a whole."
Tim Lightbourne, co-founder of Invivo Wines, said "lifestyle" wines were growing in popularity.
The Auckland-based company began producing a sauvignon blanc in 2010, called Belle, which has 9 per cent alcohol content (the average is around 13 per cent) and 330kj per glass.
Pernod Ricard Winemakers has recently released a low-calorie, low alcohol wine called Flight, which is marketed under its Brancott Estate label and comes in a sauvignon blanc, riesling and pinot gris.
The company's New Zealand managing director, Fabian Partigliani, told the Herald this month that Flight's alcoholic content was lowered through harvesting the grapes earlier, rather than a reverse osmosis process sometimes used to reduce alcohol that "compromised taste".