How are 3 NZX wine stocks doing amid soaring demand?

Highlights

• NZ’s wine industry is facing supply shortages as its vineyards are battling to keep up with rising demand.
• Marlborough Wine Estate has appointed a USA distributor, Winesellers Ltd, for its OTU Estate brand.
• Foley Wines achieved record operating earnings of $8 million in FY21.

New Zealand is home to some great wine brands and has an international reputation for its vibrant wines. NZ’s wine industry is likely to witness a supply shortage due to a drop in this year’s wine grape harvest. Orders are already being lost due to supply chain issues as well amid the COVID-19 pandemic.

NZ produced 7-8 million fewer cases of Marlborough Sauvignon Blanc than a year before, as per a 2021 vintage report from New Zealand Winegrowers. As COVID-19 evolves, controlling how supply constraints impact the market when the demand is rising will be the key focus of the industry.

Let’s have a look at how these 3 NZX wine stocks have performed recently.

 Image source: © 2021 Kalkine Media, Data source- EODHD/Others

Marlborough Wine Estates Group Limited (NZX:MWE)

NZ’s owner and operator of vineyards in Marlborough, MWE notified on 22 November that it had hired a special USA importer, Winesellers Ltd., for its OTU Estate brand.

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Winesellers is a globally recognised name in bringing and marketing fine wines in the US. Its portfolio has some of the finest quality wines in their individual price class.

MWE’s CEO Catherine Ma expressed her excitement to work with a highly deemed importer and marketer in the US. She also has hopes to grow business mutually in the biggest export marketplace for NZ wines.

At the time of writing, on 1 December, Marlborough Wine was trading unchanged at NZ$0.245.

Foley Wines Limited (NZX:FWL)

Iconic wineries and brands owner, Foley Wines, released its 2021 presentation from AGM held online on 17 November. Despite uncertainties and supply chain interruptions, the Group achieved record operating earnings of $8 million in FY21, up 3.7% on pcp.

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However, owing to severe weather conditions, the Group's harvest plummeted by 28% to 5,582 tonnes from the previous year. For the fiscal year ending June 2022, FWL expects to make $8 million in operational earnings before taxes.

On 1 December, Foley Wines was trading flat at NZ$1.600.

Delegat Group Limited (NZX:DGL) 

Delegat Group, a global wine firm located in Auckland, announced on 12 November that its AGM would be conducted virtually on 7 December 2021.

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COVID-19's influence, particularly in Auckland, as well as social distance restrictions and mass gathering prohibitions, prompted DGL to hold the meeting online.

Delegat Group was trading flat at NZ$13.700 as of 1 December.

Bottom Line

The NZ wine industry is likely to report a decline in revenue due to lower 2021 harvest amid poor weather conditions and subsequently, low production and supply.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)