The New Zealand wine industry continues to perform well on the back of profitability for wineries of all sizes, strengthening balance sheets and healthy innovation. The 2018 Wine Industry Benchmarking and Insights survey report, named Growing Smarter, was released by Deloitte and ANZ Bank in conjunction with New Zealand Winegrowers.
Deloitte partner Peter Felstead says that the 2018 results show all categories of participants recording positive profits before tax for only the third time in the twelve-year history of the survey.
“In line with previous years’ results, larger wine companies with more than $20 million in revenue show the largest average profit after tax of 18.7 percent of revenue, with smaller wineries generally achieving lower returns and with greater variability amongst respondents,” he said. “It has also been pleasing to see equity levels, as a percentage of total assets for the wider survey group, have been steadily increasing over the last 10 years with levels ranging from 54 percent to 72 percent.”
John Bennett, commercial and agriculture general manager at ANZ, said that the survey highlights the importance of innovation in the industry.
“The survey results indicate a positive correlation between innovation and the financial performance of wine companies,” he said. “We are increasingly seeing businesses investing in technology and innovation which is leading to better business decisions. This is particularly relevant when it comes to environmental changes, managing staffing pressures and improving customer experiences.”
According to the survey, wine companies are adopting digital tools to improve customer and staff experience and engagement, and to drive improved business decision making. Larger wineries are leading with a broader range of digital tools, including in the uptake of more sophisticated Internet of Things (IoT) solutions. At the other end of the spectrum, many smaller wine companies are leveraging technology to connect and engage with their customers to maintain competitiveness in a tight market.
In terms of New Zealand’s wine exports, 80 percent is bought by just three markets – the US, UK and Australia. However, the price for New Zealand wine exported to the Asian markets of China, Hong Kong, Singapore and Japan is twice the average export price. These Asian markets account for just 2.5 percent of our wine exports indicating significant growth potential.