Land use fact sheet
Wine grapes
Vineyards first appeared in New Zealand in the early 1800’s. By the 1970s they were spreading throughout the country.
The grapevine is a woody, climbing plant. The varieties that are most commonly grown in New Zealand are used to produce our famous wines, including:
- sauvignon blanc
- pinot noir
- chardonnay
- merlot
- pinot gris
- other regionally-specific varieties.
Overview
Regions
Nearly 70% of NZ's wine grapes are grown in Marlborough. The rest are grown from Auckland to Otago.
Growing conditions
Flat or north facing slopes are best for growing wine grapes. Grapevines like light, lower fertility, well drained and deep soils.
Climate
Grapes like a temperate climate, and are best suited to low rainfall areas to control fruit splitting and sour rot.
Commercial scale
You'll need at least 25ha of land unless the orchard will be run by an owner-operator and can use existing infrastructure.
Getting started
You need to know who will be buying your grapes before setting up the vineyard if you are not planning to make your own wine.
Skills / employment
Growing grapes and vineyard management require specific skills and knowledge. Hire carefully and invest in ongoing training.
Regions
Marlborough is by far the largest producing region, growing 68% of the national crop. Hawke’s Bay is the second largest region with 12%.
The rest of the national crop comes from Canterbury, Gisborne, Otago, Tasman-Nelson, Auckland and the Wairarapa. Regions such as Manawatu-Wanganui and Bay of Plenty are also represented.
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Commercial scale
25 hectares (where an orchard manager is also carrying out practical orchard work).
Smaller vineyards can be profitable if they are run by an owner-operator and if they are run very efficiently. You will also need to have access to infrastructure, such as packhouses, cool storage and agricultural contract services for workforce and machinery.
Getting into the industry
Developing a new vineyard typically costs between $45,000 to $60,000 per hectare for:
- land preparation
- vines, and
- installation of posts and wires.
These costs don’t include:
- land cost
- frost fighting equipment, or
- permits, consents, and professional advice.
There are fewer opportunities for growers to supply grapes under contract to winemakers. The industry is moving towards companies that grow their own grapes and make their own wine. You may be able to secure a lease with an established grower to use your land to extend their crop.
There are some niche markets available in the wine industry, such as:
- Growing grapes to make your own wine and brand, or
- growing a unique variety that suits your microclimate to develop into a new wine with a unique regional terroir.
It’s important to get experienced, qualified advice in the early stages of any development.
Skills and employment
Growing grapes and vineyard management requires specific skills and knowledge. Organisations such as New Zealand Wine Growers and Primary ITO offer courses to help you and your staff upskill.
Primary ITO viticulture courses
Understanding whenua management
Permanent staff
Vineyards of 40+ hectares should have a full time manager and around 2 full time vineyard workers. For larger blocks you should expect to add one permanent staff member for every 15 additional hectares.
Seasonal staff
Seasonal staff are used to get through blocks of work like pruning and harvesting. Most vineyards tend to book large numbers of contractors for a short period to get the work done fast. Alternatively, hire 1 seasonal staff member per 3ha during busy periods.
Tasks that are often carried out by seasonal staff include:
- pruning, painting and vine training in June-August
- bud rubbing and shoot thinning in October-December
- crop thinning in December-January
- bird net clipping and thinning bunches in February
- harvest in February-April.
Recognised Seasonal Employer (RSE) Scheme
The Recognised Seasonal Employer (RSE) Scheme can help you find and recruit seasonal workers from overseas. You must register as a recognised seasonal employer and meet a number of conditions to be able to use the scheme.
Compliance
Levies
NZ Winegrowers collects levies on the sale of grapes and on the sale of wine.
- The levy on wine is $0.0275 + GST per litre.
- The levy on grapes is 0.75% + GST of the farm gate price of the grapes or, if exported, 0.75% of the Free on Board (FOB) value.
MPI has additional levies and charges for wine exporters.
MPI levies and charges for exporting wine
Council regulations
Many councils require consents for access to irrigation water and for other activities related to changing land use.
Speak to your local council before investing in any detailed planning or other work to ensure you are aware of any consents or permits needed to develop an orchard on your whenua.
Meeting council compliance obligations
National policy statement for freshwater management (NPSFM)
The National Policy Statement for Freshwater 2020 gives local authorities direction on how they should manage freshwater under the Resource Management Act 1991. As such, some local authorities require growers and farmers to create a Farm Environment Plan (FEP). Make sure you're familiar with the FEP expectations in your region. Check with your local council about the requirements for your whenua or planned development.
Even if your region doesn't yet require an FEP, it's good practice to put one in place for your whenua as part of your business plan. The Foundation for Arable Research (FAR) provides templates you can use to create an FEP.
Farm Environment Plan templates
Sustainable Winegrowing New Zealand (SWNZ)
This is a certification programme led by New Zealand Winegrowers. It provides an understanding of sustainability, and shows growers how to add sustainability principles into their growing practice.
Complying with SWNZ means that you'll be compliant with most regional council environmental rules. You’ll only need to make small regional changes to ensure your Farm Environment Plan (FEP) is compliant with council requirements.
Growing conditions
Grapevines prefer light, lower fertility, well drained and deep soils .
Mature vines have deep roots and can tolerate drought well; young vines with developing root systems need access to irrigation to avoid risk of drought damage. Vineyards planted on poor draining soil will need subsurface drainage.
Flat or north facing slopes are preferred. Slopes should be less than 7° to allow access for machinery.
Vines need a trellis to support their growth. The vertical shoot positioning system (VSP) is preferred in New Zealand. The vine shoots are trained to grow directly upwards, so that the fruit hang below.
Climate
Grower Degree Units (GDU)
Grapes prefer a temperate climate. 900 GDU (using a base of 10°C) are enough to support good growth and quality fruit.
Frost
Grapevine shoots will be damaged by temperatures below 0°C. A spring frost won’t usually kill vines but can cause crop loss for the season. Frost protection to keep temperatures above 0°C should be used if there are frosts in your region in October and November.
- At least 180 frost-free days are needed for late-ripening varieties (like Sauvignon Blanc, Riesling, and Cabernet Franc).
- Early maturing varieties (like Pinot Gris, Pinot Noir, and Viognier) may need as few as 155 days.
Rainfall and humidity
Vineyards are best suited to low rainfall areas to control fruit splitting and sour rot, especially during:
- flowering in October to November, and
- harvest in March to April.
Too much rainfall during growing season has a negative impact on vine growth and will damage the quality of the fruit.
Low humidity climates are best. Humidity increases disease in grapevines.
Wind
Wind can damage grape vines, but trellis provides some protection.
Shelter should be provided if there's a risk of strong winds on your block.
Water
Grapes have a deep root system that can search for water many metres below the soil surface. This means that they can grow in soil types with low water holding capacity. Young vines with developing root systems will require some irrigation to minimise the risk of drought damage.
Vineyards need access to around 25mm of soil moisture per week.
A reliable water supply enables efficient drip or micro-sprinkler irrigation to be used. Drip irrigation allows infrequent but generous applications of water that wet the soil to over 1m depth. This drives the roots to grow downwards, which makes the vine more resilient during later dry spells.
Market
New Zealand has a global reputation as a high quality wine producing country. Marlborough sauvignon blanc is our most famous unique terroir. The export value of wine grew steadily from 2010 to 2018 to approx $1.7 billion, making it our second most valuable horticultural export after kiwifruit. Prices have remained steady as export volume has increased.
The amount of land used for productive vineyards has stayed stable, but the average volume of wine produced per ha is growing. This is partly because of the increase in sauvignon blanc plantings, which have higher yields than other varieties.
The number of growers in the industry is decreasing, which reflects the trend towards larger operations that are making their own wine from the grapes they grow.
Wine tourism is a popular part of the industry. Vineyards often become destinations for enjoying food, drink, outdoor activities and events like weddings.
Future industry
Growth in the NZ wine industry has been strong for a number of years and shows no sign of slowing down. The trend of large companies growing and small owner-operator companies reducing in number also seems to be continuing.
Wine grape prices have slowly increased between 2009 and 2019 – enough to cover increasing working expenses. However, it's getting more difficult to make a return on a new investment as a contract grower for other vineyards. New vineyards generally need to be linked with a successful winery to be profitable, especially in Hawke's Bay where prices tend to be lower than in Marlborough.
Operational costs
MPI release regular benchmarking reports that growers can use to estimate their expected costs and returns. The 2019 report for Marlborough vineyards found that annual working expenses could be estimated at $12,235 per hectare for a typical operation.
Grower returns
The time to first harvest is 2 to 3 years, while the time to mature harvest is 3 to 4 years. The productive life of a vine is 40 to 60 years.
Yields and prices depend on your location and the variety of grape you're growing. In viticulture they may also be impacted by the winery specifications. It’s common for wineries to specify a maximum production of a specific grape so they can:
- maintain a minimum quality standard, and
- manage harvesting, crushing, and fermentation logistics.
As a result, yields can range between 5 and 20 tonnes per hectare.
Average yields
Average yields for Marlborough in 2017 were:
- 16 t/ha for sauvignon blanc
- 7 t/ha for pinot noir, and
- 11 t/ha for pinot gris.
In the Hawke’s Bay:
- merlot and chardonnay tended to be around 8 t/ha, and
- sauvignon blanc yielded around 12 to 13 t/ha.
Average prices
The average price per tonne of fruit for Marlborough sauvignon blanc was:
- $1,615 between 2012 and 2016
- $1,755 in 2017.
Pinot noir, the other common variety in Marlborough, had an average return of $3,175 in 2016, but yields on this variety are much lower.
Average prices in Hawke’s Bay in 2017 were:
- $1,900/t for chardonnay
- $1,700/t for merlot
- $1,400/t for sauvignon blanc.
High quality winegrapes with a unique regional terroir get a higher price.
Seek advice
Seek advice early, before you invest in any design or development.
Talk to your local Te Puni Kōkiri office to see how they can support you through your decision-making process. They will be able to provide advice and find out whether your project qualifies for funding.
Talk to the industry organisation to see what support and resources they can offer to people thinking about growing wine grapes.
If possible, seek out advice from people who grow wine grapes in your area as well as knowledgeable suppliers.
Talk to qualified consultants who have experience with growing wine grapes and other land developments in your area. They will be able to provide detailed, impartial advice on what will (and won't) work on your whenua.
About this fact sheet
This fact sheet provides general information to help start and inform conversations. It is not comprehensive enough to support detailed decision-making.
The information in this fact sheet has been contributed by AgFirst, Fresh Facts and Te Puni Kōkiri kaimahi. Data that has not been credited in the body of the fact sheet has been sourced from StatsNZ or provided by the contributors.
You can provide feedback on the content on this or any fact sheet by emailing the Whenua Māori Service at whenuainfo@tpk.govt.nz