Viticulture Market Update

Demand for vineyards continues to be driven by both the shortage in grape supply off the back of a low 2021 harvest, and wine companies struggling to keep up with the 30 percent increase in sales.

An increase in demand forecast for fruit over the next few vintages, is driving growers to acquire vineyards to ensure they can secure grape supply.

In Marlborough, those properties with no – or short supply – contracts, have attracted a significant premium of up to 30-percent in some cases.

The additional continued demand from investors looking for stable returns on their capital means that in the past 12 months, we have seen a large number of properties come to the market and in turn, solid prices paid for viticulture assets.

That forecast fruit demand is driving more traditional Marlborough producers to also search further afield for opportunities. This has generated strong enquiry for Sauvignon Blanc in the Wairarapa, however, the small number of vineyard assets that are available are generally contracted, proving to be significantly less-attractive to buyers in need of the fruit.

Hawke’s Bay has had a great start to its growing season with good bud set and vine growth giving growers’ optimism.

There is some confidence creeping back into the sector in Hawke’s Bay due to demand for fruit from around the country and increasing prices. Of particular note, enquiries from both the North and South Island for larger scale vineyards with Merlot, Chardonnay and Sauvignon Blanc varietals are being received.

With Gisborne having experienced further investment into viticulture with development and replanting of vineyards off the back of rising per-tonne returns, we expect to see an increase in supply and opportunities for investors and wine companies alike.

According to recent commentary from the New Zealand Winegrowers organisation, despite export volume being down (due to lack of supply), international demand for our wine remains high which has been reflected in an increase in the overall export value, with the September quarter being up nine percent on the same period last year - and showing no sign of slowing.

With all these factors in play, vineyards with uncontracted grape supply are likely to continue to attract significant interest in the short-to-medium term.

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