Vintage View

The 2021 Pinot Noir harvest at Nautilus. Photos by Richard Briggs

SOPHIE PREECE

THE PHONES started ringing hot before the first grape was picked, says Wairau River Wines general manager Lindsay Parkinson. As word spread that Marlborough’s crop was looking lighter than expected, buyers – old and new – clamoured to secure Sauvignon Blanc orders, “and the enquires have not stopped coming”.

It’s a similar story for other wine companies in Marlborough, with lighter than expected crops running headlong into higher than typical sales demand, spurred on by Covid-19 lockdowns. Villa Maria’s chief global sales and marketing officer Matt Deller has fielded plenty of messages from buyers desperately seeking Sauvignon. His response has become fairly standard, letting them know that “Marlborough Sauvignon Blanc is no longer the world’s greatest wine bargain and is finally realising the value it deserves”. Matt says premium branded wine is the present and future for Marlborough’s flagship variety, while “bulk private label is in the past”.

Marlborough’s lower than expected 2021 yields represent an “absolute opportunity” for the industry, says Matt. “It gives us the opportunity to prioritise our higher tiers, so proportionately it will accelerate our premiumisation.” While the company’s Private Bin entry level wines will be cut back as a result of low crops, their Reserve and Single Vineyard Sauvignon Blanc volumes will “proportionately double”, thanks to the quality of the fruit, says Matt. “It’s really healthy for Villa Maria and healthy for the New Zealand wine industry.”

Blank Canvas co-owner and winemaker Matt Thomson agrees, saying there has been “a movement in power from the people who decide what goes on the shelves to the people who own the supply, and particularly the vineyards.” The low crops will bring “short term intense pain, for a longer term gain”, he says. “It is an opportunity for our industry to refocus on premium.”

Forrest Estate general manager Beth Forrest says the tight harvest and strong demand brings opportunity, but also enormous challenges. “It’s a small but mighty wine growing region, but we are suddenly having to deal with supply issues we have never had to deal with before… There’s a critical point there where we are actually out of

stock. And the world hasn’t had to deal with New Zealand saying ‘no’ before.”

A surge in retail demand around the world last year saw sales climb by 20% to 30% and New Zealand wine exports reach $2 billion, she says. “The clean green, tidy, healthy freedom that has been globally portrayed in New Zealand has flowed through to the consumption of New Zealand wine, and particularly our Sauvignon Blanc.” That meant the 2019 vintage sold sooner than expected “and 2020 has left the country, so everyone was desperate for 2021 volume”.

Instead, Marlborough received a “massive hit” from a late spring frost and inclement flowering period, which saw Forrest Estate’s crops down 30% on an average year. “And from everything I hear on the grapevine, 30% down on average sounds standard, and worse than that is not uncommon”. The silver lining is “exceptional” wines, she says, celebrating perfect conditions from veraison through to full ripening, while low crops ensured the right flavours, sugar and acid levels. The new tilt to the supply demand scale offers opportunity for premiumisation, says Beth. “And 2021 has the quality of wine to back that… For us there will be a focus on ‘great’ this year.”

Beth says relationships will be key to weathering the year ahead. “We have got 33 years of grape growing experience and we were lucky enough to look at November and know the frost had hit us, then know when flowering went through, that things were light.” They flagged that to clients, wanting “transparency and honesty”, she says. Partners were told they would have to manage the last of their 2020 stocks, because Forrest would not be rushing 2021 into the bottle and onto the water. Now they are having weekly conversations to inform people of the volume they will get. “It’s a new way of dealing with each other. It’s not an infinite stock system anymore.”

It’s not just Sauvignon that’s down, with all varieties reportedly hit by the combination of frost and poor flowering. Nautilus general manager Clive Jones says the company’s Pinot Noir crops were on average 50% to 60% of what the company would normally target. “However, Pinot Noir is a variety where there is a good correlation between yield and quality, so while the economics of growing at such low yields aren’t great, at least we have made some fantastic wines,” he says.

Low berry counts and smaller berries led the company to adjust its whole bunch component this year to reflect the higher stem to fruit ratio, and to be very careful with extraction. “The wines have gone into barrel looking very well balanced and with tannins already quite resolved and approachable – they are looking delicious and are already hard to resist.”

With Pinot Noir, there is stock on hand to buffer the effects of the smaller vintage, but “unfortunately we don’t have that luxury with Sauvignon”, says Clive. “We are quickly running out of our 2020 Sauvignons and will barely have enough 2021 to get us through to the release of the 2022 vintage.” The cost of goods has gone up significantly, “and supply is tight when we know demand will be high”, says Clive. “We will be allocating to market and anticipate having some difficult conversations with importers when they ask for more and we can’t supply.”

Wairau River harvest. Photo Mike Heydon

It’s a tricky business to manage market expectations with reduced cellar stock, while considering past relationships and future opportunities, says Lindsay, knee deep in a sales “matrix” that factors in short-term realities and long-term ambitions. “It’s a question for all companies to work out,” he says, balancing margins, relationships, brand building, and the need to keep markets alive. “It’s quite a complicated methodology on who you restrict, or where you change the price… and there’s not one solution to fit them all.”

Lindsay sees the limited supply as a “speed bump” that the whole industry has to consider. “You have to slow down for a minute and establish, ‘what roads do we take from here?’ For us it’s always looking for a longer term solution, not short-term.”

He expects the bulk market to be under “huge pressure” and there are likely to be fewer brands on the shelves around the world. Meanwhile, the average wine price of Marlborough wine will average up, thanks to lower supplies of lower tiered wines. That is in addition to the price increases already implemented by wineries over the past year and moving forward, he says. “From our perspective, we are still very positive about the year ahead.”

Wine Marlborough general manager Marcus Pickens says the low crops will be a financial blow to members, and to the wider Marlborough community. “We are really conscious that this could be an incredibly difficult year within the industry and beyond it, because it’s going to take a lot of cash out of the community.” There is an increasing understanding of the importance of wine to the Marlborough economy, he says, “and it’s never more obvious than when we have a tough year”.

But the long-term outlook for Marlborough is good, with an excellent global reputation that’s only grown in the past 18 months. The recently released Marlborough Wine Industry Growth Forecast 2020 (see page 9) is evidence that “The industry is very optimistic for the future.”