1. LEARNING OUTCOME 3 PLANNING (20 marks)
See chapter 3 and 4
Case Project 1.1
21 August 2014
Strong sales signal confidence in the New Zealand wine industry
Solid export value growth and continued demand for New Zealand wine is the summary of the year, according to the June year end 2014 Annual Report of New Zealand Winegrowers. “Wineries took full advantage of the glorious 2013 vintage to bounce back from the supply constraints of 2012. The end result was a 10% increase in both export volume and value as overseas sales earned a record $1.33 billion” said Steve Green, Chair of New Zealand Winegrowers. The highly successful sales year left stocks needing replenishment and even greater demand forecast. 445,000 tonnes of grapes were harvested in 2014.
All grape growing regions witnessed a two speed growing season which commenced early but slowed in the lead-up to vintage with a run of fine but cool weather in most regions allowing for good flavour development.
“The 2014 harvest may seem like a drop in the ocean compared to major Producers, but it was a record for New Zealand and signals the drive for export growth in the year ahead” said Mr Green.
Strong sales and forecasted demand signals confidence amongst growers and wineries with over 80% indicating a positive outlook for their businesses for the year ahead in the annual Member Survey.
This confidence is demonstrated in a lift in vineyard and infrastructure development in the past 12 months. However Mr Green cautioned that investment counts for little without the premium reputation that New Zealand wine has built up over the years.
Mr Green highlighted that continued commitment to quality, integrity and protecting the national reputation is the foundation of New Zealand wine’s iconic status. “Consistently meeting consumer expectations for premium New Zealand wines will take us a long way.
Being the most sought after and highly valued must be our aspiration to ensure a bright future”
The 2014 Annual Report can be accessed by clicking here and is available at
You have been hired as a consultant for a New Zealand wine industry planning to increase its exposure to international markets by exporting its premium products. The industry has supplied you with a report showing the change in markets for New Zealand Wine from 1981 until 2011. http://www.nzwine.com/assets/sm/upload/af/er/f9/co/New_Zealand_Wine_Key_Markets_1981_2011.pdf
The report shows that exports for the period 1981 to 2011 increased from 2% to 70% of New Zealand wine production. However between 2001 and 2011 exports to two regions the “UK and “Other”, which includes Asia, have not increased at the same rates as other parts of the world.
The organisation wishes to increase exports to the UK and to Asia, and needs to know about the external environmental factors it will face when competing in that part of the world. You have been asked to do the following:
1.1.1. Report on the current state of the General Environmental factors (see Exhibit 3.1 on page 87) of one major Asian and the UK in 2014. (4 marks)
1.1.2. Given this information, identify which of the countries you would recommend as a priority for your wine exports. Justify your answer. (3 marks)