New Zealand’s Babich Wines is expanding its Marlborough grape supply and winery capacity as part of ongoing investment in the family-owned business.
The project could see production increase by up to 30% in the next five years, director and family member Andre Babich told Just Drinks at the ProWein trade fair in Germany earlier this month.
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He said investing in fruit supply was sensible as Marlborough reaches capacity, and to help keep wine prices “efficient”.
As well as winery expansion, Babich Wines is investing in branding, IT, sustainability and personnel.
“We’re a multi-generational, family-owned business that’s been running for some 108 years,” Mr Babich said. “We are trying to carry that forward into the future so we’re making a lot of investment across all levels of the business.”
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Babich Wines is based predominantly in Marlborough and its range includes single-vineyard, organic and vegan Sauvignons as well as other varieties. Its first vines were planted by Croatian migrant Josip Babich in the Henderson Valley, West Auckland, in 1912.
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By GlobalDataThe company has 14 estate-owned vineyards across Hawkes Bay and Marlborough, with Josip’s grandson David Babich at the helm as CEO.
Mr Babich said the company doubled intake capacity this year in its Marlborough winery, adding a second bin. It has also added tank space to increase fermentation and storage capacity and he predicts it will need to add further refrigeration space in the future.
In the 2024 vintage, currently underway, the winery expects to process 5,500-6,000 tonnes of grapes in total, around a 25% decrease on 2023.
The business has bought a new bottling line from Italy, which is on its way to New Zealand and will be installed in the coming months. Mr Babich also noted plans to add pressing machinery and tanks inside the winery.
He said it was important winery capacity could match vineyard space, particularly at harvest time. “If [intake capacity] gets too low, then you end up having to schedule your picking at a time that suits the capacity, not the weather, ripeness or disease profile,” he explained.
Babich Wines sources grapes from a mixture of estate vineyards, co-owned vineyards, managed sites and independent growers.
Roughly 90% of its grapes come from Marlborough, 10% Hawkes Bay and a small number from the Henderson Valley.
Mr Babich said: “The single biggest investment is in vineyards – it’s where the quality comes from.”
He said Marlborough was “approaching” capacity in terms of land under vine, and buying vineyards and grape supplies was a strategic decision for the business for the future, as well as meeting increasing demand at present.
“Marlborough is a finite space… I can’t tell you exactly when Marlborough will become full, but it’s definitely approaching that in terms of plantable land. Supply is capped.”
He added the increased supply and production would help the winery to mitigate inflationary pressures and keep prices stable.
“Part of the motivation for driving production scale is to get a price per litre of wine production which is efficient and it’s really hard to do that in small volumes,” he said.
“The challenge always is to be large enough to be able to produce and have scale efficiency, but be small enough to actually have interesting winemaking and responsiveness to customer needs.”
