Sustainability is a trend that wineries must take seriously — or face being locked out of key markets.
“It’s really difficult to overstate how quickly governments internationally are putting sustainability regulation into force,” said Florence Van Dyke of New Zealand Trade and Enterprise. “Today, 80% of New Zealand exports are going to countries with mandatory climate-related disclosures.”
Van Dyke was speaking at the New Zealand Winegrowers Wine Business Forum 2024, a one day event aimed at getting the wine sector up to speed on the global business environment.
Held at the spectacular Te Papa museum in Wellington, the day began with the traditional New Zealand opening — instructions on what to do in the event of an earthquake — before moving on to an overview of global trends, and insights into marketing, tourism, AI, and export markets.
Climate risk is now considered a financial risk; if companies can’t demonstrate sustainability, they can’t access funding.
Van Dyke went on to say that environmental regulations are “just coming into force in the UK and Europe and they’re in the pipeline in the US, Australian Singapore and Japan.” She said that multinational companies are moving even faster. Climate risk is now considered a financial risk; if companies can’t demonstrate sustainability, they can’t access funding.
“The likes of Tesco, Nestle and McDonalds are all beginning to ask their suppliers not just for carbon data, but for carbon reduction plans that reflect science based targets,” she said.
Sustainability is also a growing concern for consumers. “Perhaps the biggest trend I’m seeing this year is honesty and transparency,” Van Dyke added. “That’s grown out of a huge aversion to greenwashing.” Which is a big opportunity for the wine industry, because it’s one of the few industries that can offer a genuine and honest sustainability story.
Growing wine tourism
Also on the day’s agenda was the question of how New Zealand can develop its wine tourism offering.
“We are not the easiest place to travel to,” admitted René de Monchy, Chief Executive of Tourism New Zealand. “Using pre-Covid figures, we were about 0.3% of global travel. People have to really fall in love with New Zealand to make the commitment to come here.”
It’s particularly hard to get visitors to come in the period from March to November, the cooler part of the year. Instead, most people prefer the summer months from December to February.
Wine may be one solution. “Our research really shows that the desire for New Zealand is really complemented by the desire for wine and wine tourism,” said de Monchy, with 25% of visitors heading to at least one winery. Indeed, visitors who immerse themselves in food and wine are more satisfied with their trip, and more likely to recommend New Zealand to others.
What also brings the tourists in droves is the scenery — and because the country is small, tourists can visit three major sites in just one day. Not only that, but the lack of light in rural areas means that New Zealand is one of the best places in the world for stargazing.
What New Zealand doesn’t have, however, is Michelin stars. Not because they don’t have great restaurants, but because Michelin won’t visit the country. “So we thought to ourselves, ‘we’ve got our own stars’,” said de Monchy. “In fact, we’ve got billions of stars.”
Tourism New Zealand put everything together and created Stargrazing, or dining outside under the stars. Now, visitors can head to New Zealand in winter and dine under the stars. Heated cutlery is included. Apparently, the concept has been a big hit so far with everyone it’s been tested on. (You can see it here.)
Insights from key markets
In Australia, consumers are drinking less. “The biggest impact we’re seeing in total alcohol moderation is what we’re calling a reduction in alcohol occasions — lower tempo, mid-week occasions are in decline,” said Andrew Shedden, Head of Fine Wine for Endeavour Group. “A lot of the heartland occasions that have been so important to wine — meals, at-home occasions — are either static or in decline.”
Occasions in growth include celebrations and get-togethers with friends. “These are occasions when premix and beer have dominated. We need to think about how wine becomes relevant to these occasions.”
Plus, wine is facing greater competition than in the past. Today’s consumers have a range of craft beers, pre-mixed spirits and RTDs to choose from, in a greater range of flavours.
All of this means that wine producers needed to “challenge category norms”. Shedden gave the example of Zoncello — a limoncello and Prosecco spritzer — which has been a stunning success. “We launched it in earnest last October,” he said. “Its growth is a phenomenon.”
Australia has always been a major market for Champagne, but as the cost of living bites, sales of Champagne have been falling. Shedden said this had opened up an opportunity for other sparkling producers.
Rosé is still doing well, as are premium Chardonnay and lighter reds, while traditional red varieties like Shiraz and Cabernet are struggling. Shedden thinks that if producers want to sell these grapes, they will have to make them in lighter styles.
But, Shedden warned, New Zealand will have to find a way to interest new consumers in Sauvignon Blanc, because the variety “over indexes” among older consumers. He suggested they might think more about Chardonnay.
There is plenty of opportunity in China
Most people, if they think about China, wonder how they can convince Chinese consumers to buy their wines. Mark Tanner thinks the wine trade should spend more time learning from the Chinese.
“In China, they talk about dog years,” he said. “What happens in seven years in most markets is one year in China. The speed of change is amazing.”
Tanner is the Managing Director of China Skinny, a consultancy that works with Western brands seeking to conquer the Chinese market, like IKEA, Adidas and Tourism Australia. He thinks that China is so advanced, that Western companies should watch the market, to find strategies that can be replicated elsewhere.
“When China opened up in 1979, just 20% of people lived in cities,” he said, noting that it’s nearly 70% today. “Individual wealth has grown 50% faster — 800 million people out of poverty. If you look at cranes, half the world’s cranes are in China.”
"E-commerce went absolutely gangbusters. Pre-Covid, over half the world’s ecommerce transactions were happening in China.”
Yet just 14 years ago, few people had the internet. “The only way they got information was from state run media, newspapers, TV and radio,” he added. “All of a sudden, social media came along and gave people a voice. As a result, it took off.”
Growing wealth meant that retail exploded at the same time as digitalisation was happening, “so as a result, e-commerce went absolutely gangbusters. Pre-Covid, over half the world’s ecommerce transactions were happening in China.”
As a result, social media, retail and e-commerce are all highly integrated. Influential figures like wine influencer Lady Penguin can sell directly to millions of followers. “At the same time, she has what’s called a private domain, which is much like a WhatsApp group,” said Tanner. “You have all these people in these groups and they feel really exclusive, and they get all sorts of special rewards. It’s a really good way to sell.”
Such influencers can sell millions of bottles of wine at a rapid clip, by using a combination of personality, education and community — and what they’re doing can be replicated elsewhere.
Tanner didn’t specifically talk about WeChat, but it’s possible for people and businesses outside China to download the app and watch what’s going on. Or sign up for a business account and start selling; as of 2025, WeChat will allow international cards, making it easier to process transactions.
Selling to Chinese consumers
When it comes to appealing to Chinese consumers, Tanner says to be as targeted as possible. “What they want is something specific to their needs,” he said. Even big brands have hundreds of SKUs, just to be specific.”
Too many companies arrive in China, thinking “I’m going to market to China”. For a start, be aware of geography. “You’ve got the subtropical south, you’ve got the freezing cold north. You’ve got completely different diets. Different lifestyles. These are things a lot of brands don’t think about.”
Given this diversity, Tanner advises localised marketing – develop campaigns for specific cities and demographics.
Small serving sizes may be a place to start, given that there are more than 250 million single people, of whom 92 million live alone. Or consider focusing on a popular food and offering a wine match. “Own it,” he advised. “Really focus on that, rather than being a generic wine for everyone.”
“Encourage both your brand and your customers to really promote you. Word of mouth is powerful.”
And every business needs a presence on the Chinese social media platforms. For a start, it makes it easy to turn Chinese tourists into loyal customers. If they are sampling a wine at the cellar door, and that wine is available in China, they can scan a QR code and order it to be delivered to their house, or to a friend.
But even more importantly, Chinese visitors will make a point of streaming their winery visit on social media. “Have some little place set aside that looks beautiful, that is a great backdrop, but which isn’t going to annoy the rest of your visitors. Get them to really show off what they’re doing in your vineyard.”
Tanner finished by saying, “Encourage both your brand and your customers to really promote you. Word of mouth is powerful.”
Three global trends
Simon Limmer, CEO of Indevin Group — which owns a group of wineries including Villa Maria — continued the theme of international trends, identifying three of particular significance.
“We are at the most delicate balance of what is going on geopolitically that we have experienced,” he said. “Probably the Cold War was the previous most alarming period of [recent] history, and we are seeing that manifested not only in global conflicts, but also in trade. We are seeing trade as a weapon.”
The second big trend is artificial intelligence. “Whoever wins the technology battle race will win the war,” he said. “If you think about that in very applied terms, the semiconductor industry sits in Taiwan, halfway between China and the USA. Both of them want it for a multitude of reasons, but technology is probably the heart of what is driving much of the global conflict.”
And then there’s climate change, which is already having a huge impact on food and grape production. “Those three things are existential,” said Limmer.
He said New Zealand was likely to navigate the challenges better than other economies, simply because it’s a long way from everywhere and can produce lots of food. New Zealand’s unique geography also means it will be less impacted by climate change than many other regions.
But for New Zealand to be able to survive the many problems that lie ahead, as well as the new regulatory environment, it will need to put sustainability at the heart of everything it does.
By implication, so will every other wine industry in the world — not to mention the travel and tourism industry. Resolving the paradox of long-distance travel and sustainability will be a key challenge for regions everywhere.
Felicity Carter was a keynote speaker at the New Zealand Winegrowers Wine Business Forum, which took place at the end of August 2024.
