Matthew Theunissen is a business reporter

How NZ wine is taking the US by storm

Trendy Americans can't get enough of New Zealand wines, which are being sold in the United States in record numbers. Photo / file
Trendy Americans can't get enough of New Zealand wines, which are being sold in the United States in record numbers. Photo / file

Trendy young Americans with money to spare have developed a taste for the crisp, fruity flavours of New Zealand wine - and exports are soaring.

The United States is now New Zealand's biggest overseas wine market and last year shipments jumped 11 per cent to $571 million. That was the biggest gain among the top eight countries exporting wine to the US, according to figures from Gomberg, Fredrikson & Associates.

In contrast, Australia fell behind New Zealand for the first time, with its shipments to the US dropping 9 per cent to $502m. Imports from some South American nations also fell sharply.

New Zealand wine writer and critic John Saker says demand for New Zealand wines in the US can be summed up in three words: Marlborough sauvignon blanc.

"Just through dumb luck really, they put sauvignon blanc vines in Marlborough and it came out with this remarkable result; this aromatic intensity, a real pungency.

And now it's become the standard-bearer for that variety."

According to the latest New Zealand Wine Industry report, sauvignon blanc accounted for 86 per cent of all New Zealand wine exports in February.

Saker says the light fruitiness of New Zealand wines perfectly complements prevailing culinary trends.

"We're eating lighter foods than we were, say, 10 years ago, less meat and heavy, stodgy foods. New Zealand's wines have a fresh acidity to them and they're great lighter-style wines which go well with the food people are eating these days."

The very ripe, Australian-style wines, meanwhile, have been losing favour in world markets for a while, Saker says.

"Wine is tied up with fashion and I think New Zealand wine is just right for the time and the Australian styles have lost favour."

Looking forward, Saker says "we haven't scratched the surface" of where the industry could go.

"We've achieved this level of success without very much knowledge or experience and as that grows, and as the vines grow older, we'll be well placed to keep expanding and reaching more markets."

Saker predicts that New Zealand chardonnay will one day follow in the footsteps of sauvignon blanc, with Kiwi winemakers creating increasingly delicious and unique varieties.

Ngatarawa Winery in Hawkes Bay. Photo /Warren Buckland
Ngatarawa Winery in Hawkes Bay. Photo /Warren Buckland

New Zealand Winegrowers chief executive Philip Gregan says his organisation, with winegrowers and export companies, has been working for a long time in the United States and has built up a lot of momentum in the market.

"The other core component is obviously the product we're dealing with and New Zealand produces world-class, distinctive wines and clearly they're resonating with consumers in the US, particularly the sauvignon blanc."

He says New Zealand wine is generally classified as a premium product that represents value for money.

"Most New Zealand wine is selling for more than US$10 a bottle, where the biggest portion of the market in the US is under US$10."

The average American wouldn't know about New Zealand wine, but regular wine consumers would regularly see it in supermarkets, wine shops and restaurants.

"America is the biggest wine market in the world and it's the market everyone wants to succeed in. They're now our number one market by volume and value."

Gregan says the wine industry needs to keep responding to changing trends to ensure that it maintains or increases its share of the US market.

Villa Maria spokesman Ian Clark says that when you look at the numbers, New Zealand's success is quite extraordinary.

"France has 800,000ha of grapes planted, Italy has 769,000ha while New Zealand has around about 37,000ha.

"We make less than 1 per cent of the world's wine but we've managed to get towards the real top premium end of the market."

Villa Maria now has staff in the US with the job of capitalising on the New Zealand wine trend - promoting its brands, running tastings, talking to restaurants, bars and influential people.

"What's also proving a big help is all the American tourists coming down to New Zealand - they're coming down here, tasting the wine, saying, 'Wow, these are good', then spreading the word around the USA. This is how tourism helps our exports overseas," Clark says.

Harvesting chardonnay grapes at the Villa Maria winery vineyard in Mangere. Photo / Brett Phibbs
Harvesting chardonnay grapes at the Villa Maria winery vineyard in Mangere. Photo / Brett Phibbs

Statistics NZ figures show the number of US visitors has been steadily increasing since 2013, when there were 183,344 of them in the year to February. In the latest period, the 12 months to this February, there were 307,136 US visitors.

Cloudy Bay senior winemaker Tim Heath has been with the organisation for the past 13 years and says that over that time there has been a steady increase in demand from the US.

"For us it's quality over quantity at all times and I'm sure we could service the demand that we've experience if we wanted to, but that's not how we work - the amount of wine that we make is the amount of wine we sell."

He says the popularity of New Zealand wines in America has increased substantially
since the end of the Global Financial Crisis.

"The understanding of the quality of wine that people get from New Zealand has definitely increased and these days you see a far greater cross section of New Zealand wine being represented on the shelves in the States."

He says Cloudy Bay sent about a quarter of its wine to the United States, mostly sauvignon blanc but also a good deal of pinot noir.

The main reason New Zealand wine is becoming popular, says Heath, is the distinctive taste produced by Marlborough grapes.

"Making nice, fruity wines is one thing but when you scratch in behind that with New Zealand wines, there's actually quite a serious side to them too - they've got great structure, complexity and genuine interest factor. And I think that's something we should be very proud of."

Heath says Australia wines may be suffering as the world's wine writers and sommeliers start to favour lighter, more elegant wines rather than the "dense, extracted, very ripe styles" of many Australian wines.

Cloudy Bay sauvignon blanc vineyard. Photo / supplied
Cloudy Bay sauvignon blanc vineyard. Photo / supplied

ANZ rural economist Con Williams says there is a general consumer trend in the US towards premium, high-end products and New Zealand wines are reaping the rewards of that.

"One of the big stories in the US has been that millennial group whose wages have started to rise after an economic recovery in the US and they're out there spending a bit more and looking for a bit more sophistication in their foods and beverages.

"A big part of the market has been the under-40 cohort who have been looking for more sophisticated foods and beverages with a trend towards natural-flavoured wines."

With a strong US economy, current consumer trends, and some successful New Zealand marketing campaigns, he says it is difficult not to see the trend continuing for some time.

But it appears that not every US wine drinker has succumbed to the charms of NZ sauvignon blanc.

Orley Ashenfelter, president of the American Association of Wine Economists, was not available for an interview, but in an email he said he was a fan of Central Otago pinot noir.

When it was suggested he might enjoy a Marlborough sauvignon blanc, he replied: "I despise those unripe, vegetative, disgusting sauvignon blancs. It was brilliant for somebody to take a flawed wine and make it so popular."

- Additional reporting: Bloomberg

- NZ Herald

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