Cheer Up! We’ve got Great Wine, and its Cheap

Media Release
25 August 2008

Cheer Up! We’ve got Great Wine, and its Cheap…

Research at Lincoln University has found some good news for consumers facing high costs for staples such as bread, meat and dairy products.

The latest in a series of five-yearly surveys has confirmed that the price of wine has dropped significantly, and for many New Zealanders that means a glass of wine with dinner is part of the daily diet.

In 1998, consumers were paying on average $17 for what they considered an every-day wine. In 2008 that’s reduced to $14.60.

For special-occasion wine purchases, the average spending has dropped from $25 to $21.60.

Associate Professor Charles Lamb, Head of Marketing, says the surveys also show significant increases in wine consumption across all age, gender and socio-economic groups. Average annual per capita consumption has risen to approximately 18.5 litres, which compares with 24 litres in Australia and 62 litres a year in Vatican City, the world’s largest per-head wine consumer.

More than 50 per cent of the 600 people surveyed drink wine on three days of the week or more.

The research builds on Lincoln University studies dating back to 1977 to give a 30-year view of changes in the New Zealand wine industry.

The proportion of New Zealanders who drink wine remains steady at around 70 per cent of all adults, but the frequency of consumption and thus total consumption has increased dramatically.

Charles Lamb says the wine market is continuing to mature, helped by a more favourable exchange rate for the domestic market. A stronger New Zealand dollar has seen more high-end wines supplied locally, providing consumers with additional choice and value.

Average prices have also been affected by the volume of Australian wines being supplied through New Zealand supermarkets at close to the cost of production. But overall, nearly two-thirds of wine drinkers (64%) say they prefer New Zealand wines.

“In the past three years there’s been a trend back to New Zealand wines, and people are tending to settle on a few brands that they know and enjoy. This is the brand-loyalty that every producer wants.”

The research included focus groups which examined the main factors in wine selection. For every-day wines (a “low-involvement” decision) consumers decide on the type of wine first (red, white, sparkling), then the price range, and then the variety (chardonnay, sauvignon, riesling, etc). Other factors such as location of the vineyard, competition medals, and alcohol content are minor criteria.

For special occasion wines (a “high-involvement” decision) the wine type, pricing and variety are also important, but consumers will consider additional cues about quality, such as the country of origin and regional characteristics.

Charles Lamb says the research indicates that country-of-origin is potentially the key selling point for New Zealand wine producers.

“The New Zealand wine industry is a strong niche player and the trend in consumer behaviour suggests the New Zealand advantage is likely to grow stronger. The challenge is to go beyond the clean-green image and tie New Zealand wines in with action on sustainability, along with a form of producer traceability that looks for a relationship with the consumers.”

He says the research also suggests there is potential to establish new regional strong-holds, along the lines of Marlborough’s international success with Sauvignon Blanc.

ENDS

About the Commerce Division
The Commerce Division is the largest of the four divisions at Lincoln University, accounting for around 40 per cent of total student numbers. The Commerce Division provides teaching, research and professional services in the areas of Accounting, Business Management & Law, Economics, Finance, Marketing and Property. It has an extremely active Postgraduate Programme with around 130 postgraduate students currently enrolled, including 40 PhDs. It also has an established Executive Development Programme (EDP) aimed at managers and professionals who are unable to study full time or on-campus. The EDP includes a specialised Master of Property Studies and a Master of Professional Studies. www.lincoln.ac.nz

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