New Zealand's wine crop harvest is down double digits this year, with one of the country's largest wine company's yield down by more than a quarter.
A combination of November frosts and inclement weather during flowering season in December, compounded by near-drought conditions in the three months leading up to harvest, have resulted in smaller output for winegrowers around the country, says Matthew Deller, Villa Maria chief global sales and marketing officer.
Industry-wide figures have not yet been released, but Villa Maria says much like others, its forecast is down 26 per cent this year.
NZ Winegrowers Association says it is too early to tell the full extent of the decrease in harvest, and which varieties had been the most significantly impacted, however, it anticipated a "significantly smaller vintage" overall this year.
Although grape production is much smaller, the quality of the fruit this year was "phenomenal" across all varieties and regions of the country, Deller told the Herald.
"It's a double-edged sword," he said, adding that the company could supply demand at a higher than normal price on its more premium-tier wines.
Villa Maria said output for all of its grape varieties had been affected this season, however, particularly its sauvignon grapes, which would make the low to mid-market wines more scarce.
New Zealand sauvignon blanc has always been underpriced, Deller said, so the change in price following the smaller harvest would force winemakers to increase their prices "closer to its true value".
Villa Maria was looking to hike prices of between 10 per cent to 20 per cent, he said.
New Zealand's grape harvest began in February and wraps up this month.
The speed at which Marlborough sauvignon blanc had grown in popularity in recent years had meant many winegrowers had never been able to price the wine where it should be until now, Deller said.
He said a shortage in sauvignon blanc grapes would likely cause an increase in interest in other wine varieties in its portfolio.
"We have good amounts of pinot noir, chardonnay, rose and bordeaux red . . . there are positives, none of which [however] enough to offset the increased cost of grapes, the advertising costs associated with winemaking or company overheads.
"The total bottom-line impact will be tough to bear, but we're prepared for it and we see the light at the end of the tunnel - fingers crossed for a slightly more abundant 2022 vintage."
Villa Maria has harvested 23,000 tonnes of grapes this year, compared to about 31,000 tonnes last year.
Deller said this was the third year that the quality of vintage had been exceptional, but this year's yield was looking like the best the country had seen.
Decreases in grape harvests across the country comes at a time when the industry is already facing increased production costs and ongoing labour shortages, due to the closure of borders and restricted number of RSE workers.
New Zealand wine, particularly sauvignon blanc, has experienced unprecedented demand from international markets over the past 12 months, NZ Winegrowers Association said.
"This meant industry stocks were at low levels going into vintage, a situation that has now been compounded by the smaller harvest. We are already seeing supply and demand tension as a result, and we expect that many wineries will face tough decisions on who they can supply in their key markets over the next year," NZ Winegrowers chief executive Philip Gregan said.
Wine is New Zealand's sixth-largest export and goes to more than 100 countries.