New Zealand wines thrive on high quality

Wines & Vines, June, 2001 by Larry Walker

Kim Crawford, twice winner of the New Zealand Winemaker of the Year Award (1995, 1996) just laughed when I asked if New Zealand has a plan to corner the world wine market, as Australia seems intent on doing.

"You know," he said, "that Southcorp alone makes more wine than everyone in New Zealand."

As of 1999, there were 334 wineries in New Zealand, making about 8 million cases of wine annually from just under 30,000 acres of vines. Chardonnay, with 23% of the acreage, is the most widely-planted grape, followed by Sauvignon blanc, 18%, and Muller Thurgau, 12%.

Kim Crawford wines are exported to Canada, the U.K., Northern Europe, the U.S. and just beginning in Asia. He exports about half of the 35,000 cases he makes, with the U.S. his best export market, with sales of about 4,000 cases.

Crawford has a postgraduate winemaking diploma from Roseworthy Agricultural College in Australia. He has worked in the Hunter Valley of New South Wales, in California at Stag's Leap Winery and spent a year at Becksberg Estate in South Africa. He was the winemaker at Coopers Creek in New Zealand from 1989 through 1998 before leaving to focus fulltime on his own brand.

The Export Markets

Asked if it was tough finding a market for New Zealand wines, he said that the quality has helped sell the wines in export markets. "Maybe 10 years ago it would have been difficult, but New Zealand wines have improved a great deal, and that quality is recognized."

Along with the high quality, New Zealand wines can command higher prices. "In the U.K., New Zealand wines are under 1% of all imports, but have 15% of the market for wines over [pound]5," he said.

"When we show our Riesling in Germany, they can't believe the quality for the price," he added.

Kim Crawford wines are imported to the U.S. by Vintage New World. Rusty Eddy, director of communications for the company, said that marketing New Zealand wines and Kim Crawford wines in particular had been going "almost too well."

"If anything, we need to slow down," he said. "Crawford sales are hot. Had we not been out of stock on some items this year, we could have sold 50% more wine." Eddy said the wines are doing better on the coasts.

"Our marketing plan for Kim Crawford at this point is driven by maintaining momentum and pricing on the Unoaked Chardonnay and Sauvignon blanc, especially on-premise. We will also introduce a new item each year," Eddy said.

Vintage New World

Vintage New World (VNW) is a distributor as well as an importer. According to Eddy, the key to the company's success is that it has a financial interest with the wineries, so VNW is serious about being partners.

"We have also worked toward becoming a totally integrated marketing company, which means we believe in a high tech operation. We feel that gives us a special advantage over our competitors," he said.

VNW takes orders electronically, with direct access to current inventory for every wholesaler. VNW also has a common accounting service with Hogue Cellars, which also helps cut overhead.

"The problem for numerous small-and medium-sized wineries in the U.S. is that they all try to reinvent the sales and marketing wheel, and they all end up doing, and spending money on, the same things: regional managers, sales teams, and national sales managers and marketing people. Or, they contract with big distributors that might not give them the attention they deserve," Eddy said.

He said that VNW can provide all those services to clients, and given the financial interest, VNW tends to work harder. "In addition, we're concerned about building a brand because, in our case, it's only a well-built and secure brand that's going to provide the long-term returns to keep the company going," he said.

Current clients include Buffalo Ridge, Heritage Road, Hogue Cellars, Kim Crawford, Pepper Bridge and Salmon Harbor.

Unoaked Wines

Asked why he thought the unoaked wines (both his and other brands from New Zealand and Australia) had been such success, Crawford said the key was high-quality fruit. "I think when it hasn't worked it's because poor fruit has been used. With no oak flavors, it's essential that the fruit be top quality."

Eddy said that they were not concerned with wine ratings. "From a media standpoint, my goal is instead to build relationships with media people in the few markets where Kim's wines have been or are being introduced. With only 6,000-10,000 cases to sell over the next year, we have the luxury of selling on relationships, not price or ratings."

Vintage New World, which is half-owned by Hogue Cellars of Washington, has a sales specialist from Australia who focuses entirely on Kim Crawford wines and Heritage Road, an Australian wine imported by the company. "You'd be amazed how effective that Australian accent can be with accounts; it's almost instant credibility," Eddy said.

Crawford is planting his own vineyard this year but he also sources grapes from both the North and South Island of New Zealand. He believes the natural fruit flavors of New Zealand grapes really help sell New Zealand wines.