New Zealand’s wine industry has long been celebrated as one of the great success stories in the world of premium wines.
Over the past three decades, consumer-driven international growth has shaped the country’s global reputation for distinctive, high-quality, and sustainably produced wines. Today, exports exceed NZD 2 billion annually, supported by investments in 42,000 hectares of vineyards, advanced winemaking facilities, and internationally recognized brands.
But according to the latest annual industry report, the sector is now entering a period of heightened uncertainty, as it faces global market fluctuations, shifting consumer habits, and regulatory pressures.
Exports: Growth in Volume, Decline in Value
Exports remain the lifeblood of the New Zealand wine sector, accounting for 90% of total sales. Over the past 12 months, export volumes rose by 5%, yet total export value fell slightly to NZD 2.1 billion (USD 1.2 billion). The United States continues to lead as the top destination, with sales valued at NZD 762 million, although this represents a 3% year-on-year decline.
The downturn is partly attributed to tariff increases in the U.S. (introduced in April and August) and new tax measures in the United Kingdom. While the full impact of these changes has yet to be measured, producers are voicing concerns over future competitiveness.
Emerging Markets Offer New Opportunities
While traditional destinations—the U.S., U.K., and Australia—still account for more than 70% of exports, growth in emerging markets is striking. Sales to China surged by 47% to NZD 56 million, while exports to South Korea nearly doubled, rising 92% to NZD 44 million. Overall, secondary markets recorded 17% growth, now approaching NZD 600 million in combined value.
Despite historic lows in global wine consumption, New Zealand wine maintains strong brand equity, with an estimated NZ$4.9 billion in overseas retail sales.
Domestic Market and Changing Habits
Domestically, New Zealand itself is the fourth-largest destination for its wines. However, consumption has fallen to its lowest level in three decades, with annual sales reduced to 40 million liters. Analysts point to economic pressures, generational shifts, and changing purchasing habits as key drivers behind the decline.
Wine Tourism: A Bright Spot
In contrast, wine tourism continues to thrive. Around 27% of international visitors include a winery experience in their trip, and these experiences consistently rank higher than the national tourism average. This trend provides crucial income for wine regions and supports the broader hospitality sector.
Vintage 2025: Quality Meets Market Hesitation
The 2025 harvest benefited from favorable conditions—warm, dry days and cool nights—producing high-quality grapes. Yet many wineries, wary of market uncertainty, chose to leave a portion of the crop unharvested—a rare step in recent years.
Sustainability and Organic Growth
New Zealand continues to lead in sustainability. The Sustainable Winegrowing New Zealand (SWNZ) program celebrates its 30th anniversary, with 98% of vineyards certified and over 90% of total production meeting sustainability standards. The industry is also advancing a net-zero emissions roadmap for 2050 and mandating biosecurity plans for all certified vineyards.
Organic wine is another growing segment, with 116 wineries now producing at least one organic label—a 13% increase in just two years. However, producers are cautious about new genetic technology regulations, which may increase compliance costs and pose reputational risks.
Research, Innovation, and Workforce
The Bragato Research Institute (BRI) has renewed its five-year strategy, focusing on climate adaptation, water and energy efficiency, and the development of new clones better suited to changing conditions.
The sector employs around 7,000 full-time workers and has launched targeted programs to nurture young talent and advance gender equality in the industry.
Financial Performance
Financially, operating income for the fiscal year ending June reached NZD 22.3 million, largely funded by levies from producers and wineries, supplemented by external funding for research and innovation.
Outlook
New Zealand’s wine industry remains a global benchmark for quality and sustainability. Yet, with heavy reliance on exports and growing exposure to regulatory, economic, and demographic shifts, the sector faces a delicate balancing act: safeguarding growth while adapting to an evolving global market.
Source: Vinetur