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The estatewas started by David Hohnen, the founder of Cape Mentelle Vineyards in Western Australia's Margaret River region. Established in 1985, Cloudy Bay became one of the first five wineries in Marlborough. The winery has four estate vineyards in the Wairau Valley subregion, and buys fruit from nine other Wairau vineyards.
The Wairau Valley itself was the product of several glacial periods ending 14,000 years ago. The resultant soils vary from washed stone to gravel, alluvial silt and clay. Marlborough has a maritime climate and has some of the longest sunshine hours of anywhere in New Zealand.