A new survey shows signs of a gradual turnaround for the wine industry as it recovers from the global recession hang-over.
But wineries dogged by high debt levels are still struggling to survive.
Deloitte's annual financial benchmarking survey for the industry shows New Zealand wineries have improved their profitability during the past year.
Paul Munro, the Deloitte partner who led the survey work, says the smaller and larger operators have made the biggest gains and the signs from this year's survey are positive.
He says if the industry gets the balance right in terms of supply and demand and continues to position the New Zealand brand at the premium end of the market, then the business models can provide a profitable result for many of the operators in the industry.
But Mr Munro says there's still some way to go before the wine industry fully recovers.
He says high debt levels and reduced land values continue to plague the industry, and many wineries are still struggling to become profitable.
New Zealand Winegrowers chief executive Philip Gregan says the survey also identifies the exchange rate as the number one issue for wineries, with the high New Zealand dollar continuing to erode export returns.