The CEO of Babich Wines, David Babich, kindly took time out of his very busy schedule to answer a few questions not only about the company he directs but also about the wine industry as a whole. He has some illuminating answers about building a family business, distribution and logistics, organics, marketing, wine competitions, and the on-trade’s importance.  

Born in 1968, Babich earned a Bachelor of Oenology at Roseworthy Agricultural College in Australia and then spent a number of years working on the Babich cellar floor. He next returned to university to complete a commerce degree in Auckland. He worked in sales, marketing, and senior management in the pharmaceutical industry in the 1990s. He returned to the family company in 2001. Babich Wines exports around 90% of its production, a lot of that being the famed Marlborough Sauvignon Blanc.  

Smaller yields in the 2024 harvest do not concern him or the company even when considering that an increasing quantity of Babich’s organically cultivated vines produce fewer grapes. A Babich vintage report notes: “The period from June 2023 to February 2024 has been the driest in Marlborough since records began 94 years ago, with the second highest number of sunshine hours. Despite the intense drought conditions, our vineyards have fared well with very little disease pressure and excellent quality and flavor development, while the crop itself is ‘light and ripe’.” David told one reporter last year that organic is the next step up the premium ladder for Marlborough Sauvignon Blanc. 

That seems to be proving true. Chris Quinn, UK & EU market manager for Babich Wines, told DrinksBusiness: “We still make more organic wines than we can sell,” adding that the “organic category tends to be around nine-12 months behind conventional wines in terms of release. It’s a longer cycle, and the wines are better for it.”

Image: Babich Vineyards

Babich knows something about long cycles. As the company website states: “David grew up with the story of his grandfather’s journey from the other side of the world and his mission to create world-class New Zealand wines.”  

And that is where our questions started. . . .  

Babich Wines has an amazing and lengthy history. Please describe that history and Babich's current position in the wine industry, both in New Zealand and globally. Please give us an idea of your wines, including price tiers.  

Babich Wines was founded in 1916, making it one of New Zealand's oldest family-owned wine companies, but the story actually starts much earlier and further away in Dalmatia, now modern-day Croatia. In the early 1900s, the old Austro-Hungarian empire was crumbling, war was brewing, and life was only getting harder for the peasant farmers who made up 90% of the population. 

One of them, a desperate farmer named Petar Babich, made the excruciating choice to send his youngest son Josip, then just 14 years old, across the world to New Zealand in the hope of giving him a better life. They never saw each other again. 

Speaking no English, and with no home, no food, and very little money, Josip made his way to the far north of New Zealand where he made a start digging and selling Kauri tree sap. He eventually saved enough money to purchase a plot of land in West Auckland in 1911 and produce his very first vintage of wine in 1916, at just 19 years of age. 

Over the following 100 years and three generations, Babich Wines was instrumental in setting the standard for New Zealand wine; not only through the quality of wine produced but also by setting definitive export standards which have contributed to the incredible popularity of New Zealand wines globally. 

Today, we own and operate two wineries and 14 vineyard estates, the fruit of which goes into producing wines in a wide range of styles, varieties, and price points. Our most popular include the 'Babich' range of classic New Zealand varieties (generally $14-15 USD, or 13 GBP range), the Black Label range which is produced in a richer, fuller, and more textural style with food and restaurants in mind (not generally available in retail), and the Family Estates Single Vineyard Organic range ($16-18 USD, 15 GBP). 

How have issues in global distribution (including consolidation) and shipping affected the company? 

Wine has always been a highly competitive category, and with increasing consolidation in distribution, it makes standing out amongst a portfolio of possibly thousands of wines incredibly important. In general, it makes it easier for the big to stay big, but it also creates opportunities for family-owned wineries like Babich because distributor stakeholders and customers enjoy working with brands and products with an interesting story to tell as well as an interesting wine experience. People generally get into wine because of the quality, the variety, and the ever-changing landscape from vintage to vintage and region to region. There's always something new to discover and, no matter how big the big get, I feel that will always be true in wine.

Image: Babich Winery

Babich appears to have a marked commitment to sustainability in all areas. Please describe the company's initiatives in this area. 

We have a range of sustainability programs in play, the focus areas being:

- Water quality and conservation: We are targeting a reduction in water use in the winery to 1.5l of water per liter of wine produced, increasing water storage capacity so that 85% of our vineyard land can be irrigated with stored water (not from the rivers or aquifers), web-based irrigation controllers to improve irrigation efficiency, and planting alongside waterways in our vineyards. We also sponsor a range of coastal protection organizations in the US, Canada, Australia, and New Zealand.

- Land stewardship: All of our vineyards and wineries are certified 100% sustainable. 30 years ago our Irongate Vineyard in Hawke's Bay was the first in New Zealand to be certified as sustainable.

- Organic leadership: We have been producing organic wines for 15 years, and are currently one of New Zealand's largest organic producers. The benefits of this are primarily in soil biodiversity, and we also see much more variety in insect life in the vineyard.

- Responsible packaging: All paper-based packaging must be FSC-certified. Bottles must be made from <75% recycled glass. Carton inserts are now made from 100% recycled materials. 

In terms of marketing, how important are critics’ scores, reviews, awards, and wine competitions? 

It varies from customer to customer, and market to market, but as a general rule third-party endorsements from critics and competitors have a huge bearing on a wine's success.  

Like most wineries, we will always back the quality of our wines; we put our heart and soul into what we produce; and we are proud of what's in each and every bottle.  

However, although buyers and consumers know this when they see that a respected wine critic or competition has given a wine the thumbs up, it gives the buyer confidence that the wine will sell through. The consumer will have the confidence that they'll be bringing something great to the table. 

How important are relationships with the on-trade and sommeliers in terms of Babich's business? 

From a commercial perspective, the on-trade makes up almost a third of our total business, so in that sense, they are very important. At the same time, the on-trade and sommeliers tend to be thought-leaders in wine so when they have a positive perception that does great things for brand strength at a consumer level.  

Trying Babich wines in an on-trade setting is a great way to experience the brand at its best, creating a positive perception for the consumer to share with friends and take away to other outlets and channels 

Image Source: Babich Wines.

What do you view as the five greatest challenges facing the industry over the next five years? And how will Babich navigate those obstacles?

 - Grape supply: There is very little viable vineyard land remaining for development in Marlborough which will put pressure on the industry's ability to supply the increasing global demand for our wines. For us to continue growing there will need to be a renewed focus on premiumisation and continuing to ensure the quality stacks up to the price point. There is also the opportunity to diversify production with alternative varieties, wine styles, or production methods like organic, regenerative, and biodynamic wines.

- Environment: For a long time issues with climate change and the environment seemed like next century's problem, but the reality is it's happening right now. When people's homes and lives are threatened, it feels redundant to talk about the wine business, but the reality is a large number of people rely on the industry for their livelihoods. We're already seeing disruption from more extreme weather events like droughts and cyclones, and even harvest timings have moved in the last decades. Future-proofing all sides of the business - viticulture, winemaking, production, and distribution - through our sustainability program has to be a focus.

- Legislation: There is currently a strong anti-alcohol lobby influencing national and global health organizations. There's no doubt that alcohol can harm when not consumed responsibly, but there are also health and social benefits when it is. Removing some of the hysteria and extremism around alcohol and finding some balance in the conversation around alcohol might go against the prevailing dialogue. Still, it's a conversation that must happen.

- Logistics: New Zealand is a long way from the rest of the world, and getting our products to market consistently and on schedule will be critical. It's a challenge that can be met with good people and good processes, but this reliable continuity throughout the supply chain will potentially require more collaboration at an industry or government level. 

In conclusion, Babich Wines evidences the New Zealand wine industry’s resilience and innovation. With a rich history dating back to its humble beginnings in 1916, the company has evolved into a global leader known for its quality, sustainability, and commitment to excellence. Under the leadership of CEO David Babich, Babich Wines continues to push boundaries, embracing new challenges and opportunities with a spirit of adventure and determination. As the company looks to the future, its focus on premiumization, sustainability, and strong relationships with consumers and the on-trade will undoubtedly continue to drive its success. 

 Header Image: David Babich