Marlborough Wine Estates has released its financial results for FY24, revealing an 11.4% decrease in revenue compared to the year prior. Gross profit fell from NZ$3.63 million to $0.64 million, with the group citing a decrease in bulk wine demand and “slow international shipments”, as well as reduced yields.

Chairman Min Jia and acting group chief executive officer Conan Wang said in an announcement to NZX, New Zealand’s stock exchange, that the team was focussed on expanding its distribution network internationally and “enhancing profitability in the coming years”.

“This has been a challenging year for the New Zealand wine industry, as global customers reduced inventory levels and adjusted purchasing patterns as global shipping patterns have normalised, which led to a decline in packaged wine export volumes compared to the previous year,” the announcement stated.

“Export volumes during the second half of FY24 have grown on the prior year reflecting continued consumer demand in key markets, which position the industry well for a stronger export performance in FY25.

“The US market remains the largest export wine market for New Zealand wine at 100m litres, a reduction of 6% on the prior year. The OTU brand has been imported into the US market for just over two years and has continued to expand its distribution, now sold in over 30 states. The on-premise segment of the US market has slowed down during FY24 and we are working with our importer to broaden our in-market distribution into retail and grocery markets now the OTU brand has established a distribution base.”

Challenging conditions in Marlborough during the 2024 vintage have also led to lower harvest volumes in the region, said Jia and Wang.

“The 2024 harvest has delivered grapes of exceptional quality, with the warm and dry conditions leading to an earlier harvest in fully ripe and excellent condition.”

“However, as previously reported, the Marlborough region experienced extremely dry conditions across the growing season and recorded its lowest rainfall for the 9 months to February in 94 years, with the conditions continuing throughout March. The dry conditions and variable weather conditions during flowering last year slowed vine growth and impacted bunch and berry size and weight.

“Given global export volumes slowed in the first six months of the year for the industry, there was a reduction in grape sales prices in Marlborough for Vintage 2024.

“As a result of these growing conditions the harvest from MWE’s vineyards reduced 32% on long term average yields and 36% on last year. The lower yield and reduced grape prices had a significant impact on MWE’s profitability in this financial year.

“Consequently, MWE reduced its bulk wine sales in FY24 and this, together with the harvested grapes will enable the group to pursue growth of its branded wine sales in domestic and international markets for the year ahead.

“We remain positive about the future for our brands. The long term demand and supply equations remains favourable, as New Zealand wine remains one of the only categories showing growth in many major export markets.

Looking ahead, Jia and Wang were optimistic about continuing growth for New Zealand wine in overseas markets.

“The reduced yield in the 2024 vintage presents additional growth opportunities in key export markets for New Zealand wine, as New Zealand maintains a strong presence and momentum with sales to consumers in most key international markets increasing year on year. MWE continues to focus on growing premium branded wine revenue in both New Zealand and overseas markets and is working closely with its importing and distribution partners to drive continued growth in these critical markets.”

The announcement can be read in full here.

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