Central Otago Wine Region - The Wine Industry Today

The Wine Industry Today

As of 2005, the wine industry in Central Otago is still at an early stage of development, and will likely continue in a strong growth phase through at least 2020, and possibly beyond.

So far, it has avoided participating in the low-price, bulk wine market where competition is intense and margins are low. The Central Otago Winegrowers Association believes that "for the industry to succeed and grow, a strategy aimed at keeping quality standards at the highest possible level, and aiming at the top end of the market, is the only sustainable course of action for the industry to follow."

The challenges faced by the industry in Central Otago include an unpredictable climate, a relatively low yield, and poor economies of scale — leading to high production costs. On the other hand, these are factors which also contribute to the quality of the wine (particularly the Pinot Noir), and to the boutique winery image of the region.

International recognition is an essential element in the region's future success since — given the small domestic wine market and the relatively high prices of its output — a large proportion of its production is exported. Such recognition is increasingly being achieved.

Wine critic Jane Macquitty of The Times (of London) wrote in late 2003, "At last Burgundy has a serious New World rival. It used to be gospel that pinot noir could not be grown successfully beyond the Côte-d'Or… But now I have discovered a little-known and mostly unsung young region that I think will knock the rest of the pinot noir gang for six — Central Otago." And a leading British wine writer, Jancis Robinson MW, named Central Otago as one of the top five New World wine producing regions in early 2005. In a Decanter magazine interview she listed Central Otago together with Napa Valley (California), Margaret River (Western Australia), Stellenbosch (South Africa) and Willamette (Oregon) as her five favourite New World regions.

Synergies with tourism are also important to the wine industry, and the region is well-located to benefit from this with Queenstown, New Zealand's best-known year-round tourist destination, on its doorstep. 'Wine route' attractions are developing rapidly, with winery visits, wine tours, tastings, gourmet restaurants and winery home-stays being increasingly promoted by the in-bound tour operators.

Given its geographical restrictions, Central Otago will never become a vast wine growing region, but if it can build upon its growing reputation for wines (particularly Pinot Noir) of exceptional elegance and longevity, it appears well-poised to carve itself an important and profitable niche in the world market.