Marlborough Sauvignon shortage could be ‘healthy’

A Sauvignon shortage in Marlborough could be healthy for the image and profitability of the famous New Zealand region, according to one producer.

Clive Jones is head winemaker at Nautilus Estate and chairman of Wine Marlborough

Clive Jones, winemaker at Nautilus Estate and chairman of Wine Marlborough, told db that this year’s smaller vintage will ensure the sell-out of Sauvignon stocks ahead of next year’s harvest, removing the need to sell wine at low prices, which damages both the region’s reputation, and producers’ margins.

“Grape prices are going up; there is rising demand, and for 2016 the tanks will be empty,” he assured the drinks business during a tasting in London last week.

“And if there is a bit of a shortage it would be healthy as it would mean less £5 Sauvignon Blanc, which is not economically sustainable,” he explained.

Indeed, he said that Marlborough wineries “can’t make wine at £4.99 profitably,” adding, “If it is being sold at that price then someone is missing out.”

He also said that Marlborough’s high level of international recognition can be negative for producers like Nautilus.

“The strength of Marlborough is a double-edged sword, because you find that people just ask for Marlborough Sauvignon Blanc, not a Nautilus Sauvignon Blanc. We want people to spend another £1-2 for a serious Sauvignon, but we hear from people that it all tastes the same, that’s the perception we are up against, which is so frustrating because of course it doesn’t.”

Explaining the difference between “serious” Marlborough Sauvignon Blanc compared to other examples, he recorded the production of “cheaper commoditised versions”, which he described as “all style and no substance”, noting the use of grape juice to “sweeten up” wines, leaving around 5-6 g/l of residual sugar in the finished product.

“If these are commercially successful, then so be it, but we want to make something more serious, and our Sauvignon Blanc has a long drinking window, it actually tastes better the calendar year after the vintage, so we release it a bit later,” he said.

Looking more closely at the supply situation in Marlborough, he said that 2015’s harvest was “small”, and “below target yields” – most would have taken 10% more if it was there, but it wasn’t in 2015”.

In the meantime, global sales of Sauvignon Blanc have increased, so the expectation is that the tanks will be empty as producers go into the 2016 vintage – in contrast to that start of this year’s harvest, when there was still some 2014 in the tanks that was left to sell, according to Jones.

Considering the long-term outlook for Marlborough, he said that supply was unlikely to significantly increase due to the natural restrictions on plantings in the area.

“Marlborough is officially 23,000 hectares, and it will hit 25,000ha of productive vineyards very soon. It is hard to see it getting bigger than 30,000ha, so there might be 5,000ha left – and a reasonable chunk of that could only be planted if there was a scheme to get the water to those areas.”

Concluding, he stated, “Marlborough could be fully planted by 2020.”

As for a more immediate (and cheaper) solution to rising demand, producers’ are starting to look at acquiring vineyards outside Marlborough, with Hawke’s Bay a particular focus – a trend you can read more about here, and in the August issue of the drinks business.

Recording that Jim Delegat – who owns the Oyster Bay brand – has just planted 500 hectares in Hawke’s Bay, Jones observed, “New Zealand as an industry is starting to think beyond Marlborough.”

The graph below shows Marlborough’s evolution of vineyards and production since 2000. As the bars illustrate, the 2014 vintage was unusually large, and 2015 is a much smaller vintage.

Marlborough: plantings (ha) and production (tonnes) from 2000-2015. Source: Wine Marlborough