Export shipments from the new vintage have begun very strongly with over 8 million litres of current vintage Sauvignon Blanc exported in May and June, more than twice as much as in any previous year. This suggests that for some brands at least the distribution pipeline was fairly empty following the small 2012 vintage.
While the vintage is a record for the industry, this needs to be kept in perspective. Vintage 2012 was very small and a better comparison for the vintage is with 2011. Compared with that vintage production is up only 5% in 2013, a manageable increase one would think.
The combination of low stocks and strong sales suggest the harvest volume will be manageable in the year ahead. However that is a ‘gut’ feeling only. To put some data around the prospects for the year ahead, NZW has reinstituted the Export Projection Survey among medium and large wineries. Hopefully this will provide a good guide for the sales outlook over the next three years.
When the Vintage 13 data was released at the Grape Days in June it was clear that the thoughts of many in the audience turned immediately to Vintage 2014. If Vintage 2013 was that big, what would happen in 2014? Could the industry handle a vintage of more than 350,000 tonnes in 2014?
Supply demand management is a theme I have mentioned on a number of occasions in these pages as it is a notoriously difficult but very important task in our industry.
One of the occasions I dwelt on supply demand management was exactly 5 years ago, just prior to Bragato 2008, when I discussed the industry’s grape/wine requirements from Vintage 2009 following the record 2008 crop.
Be clear I am not in any way suggesting the industry is in the same position now as it was in 2008 - it is not, as the differences between then and now are many.
However the words of August 2008 bear repeating and the principles underlying them are worth consideration … as you read think 2013 & 2014 instead of 2008 & 2009:
In many ways the key issue for the industry is not the challenge provided by vintage 2008, significant though that is. Rather the key issue/question is how large is Vintage 2009 going to be … or more particularly how big should it be?
This is because the size of Vintage 2009 will determine whether or not the supply challenge presented by vintage 2008 is compounded or not.
At this stage of course, industry sales performance in the year ahead is not known and the price at which those sales will be achieved is also not known. In addition we do not know the size of vintage 2009 and whether frosts or poor fruit set will intervene as they did in 2003, 2005 and 2007.
However, it would seem extremely unwise for the industry to rely too much on Mother Nature to maintain a desirable supply/demand balance. That would be taking a very large risk indeed.
Just as the industry can influence the supply/demand balance by its sales performance in the year ahead, so it can also determine the size of the crop by its use of vineyard management tools including pruning, shoot and crop thinning.
In a relatively free and open market production environment such as we have in New Zealand those decisions are taken by individual wineries and growers. Collective(ly) decisions by the individuals, however, determine the collective size of the vintage, so those individual decisions are very important.
So, the future is in your hands. Wineries in the year ahead need to realistically determine their supply needs out of vintage 2009. They need to clearly communicate that information to their growers so that the growers can respond to it.
Without that communication between individual wineries and growers the chance of the industry successfully managing the supply demand equation over the next 18 months will be greatly reduced.
As I have said – I am not suggesting the industry is in the same position in 2013 as it was in 2008. However, the need each year for growers and wineries to be strongly market led in assessing future grape/wine requirements is fundamental to success in our business. Further there must be good communication between growers and wineries.
So déjà vu – no, not if we learn from the past! ν
