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SA wine trends

South African wine trends 2016

The South African wine industry is currently enjoying one of its most exciting phases in history. Overall wine quality has increased dramatically over the last five years and the consumer is now spoilt for choice with a wealth of new producers, varieties and styles.

Roland Peens, the director of wine retailer, Winecellar.co.za, outlines key trends affecting SA wine this year.

Though winery input costs have risen, the battered rand has pushed many struggling wineries into a profitable position. South African wine now offers tremendous value in the export markets and additional profits have allowed for more investment and even greater quality to come.

Here are my predictions for 2016.

 1. Fine South African wine will get more expensive

Expect double-digit increases and decreased supply. While the weak rand has positively affected producers, the knock-on effect will be less kind to the consumer. The demand for fine South African wine abroad is at an all-time high and the pull from export markets will be difficult to ignore.

Developed markets can easily soak up our fine wine production at higher rand prices. The smaller, more fickle and undeveloped South African market will likely be left with less allocation. This leaves producers with little choice but to push up local prices in order to reach better parity with export markets.

Sadie Family’s Columella is arguably South Africa’s best red wine and sells for more than double in the US than it does in South Africa. This is an unsustainable position with ever-increasing globalisation.

A breakdown of our trade agreements with the US and EU will complicate the issue, likely decreasing exports and increasing foreign prices further.

2. Increased quality and higher prices will segment the market

The gap between luxury wines versus alcoholic beverage will widen. South Africa’s most expensive current releases are about 100 times more expensive than the least expensive (R2 500 verses R25). The figure in France is closer to 10 000 times, with a current release Domaine de la Romanée-Conti trading at around €13 000 per bottle on the open market. This leaves a large gap for South Africa at the luxury wine level.

Luxury wines are largely unaffected by the weak economy and require a different marketing and business strategy when compared to supermarket wines.

Supermarket wine prices will likely stay more constant as producers find more efficient ways of production and consumers are squeezed by high inflation.

3. 2015: Possibly our greatest vintage comes to market

El Niño and climate change are causing large vintage variation in the Cape and across the globe, already resulting in two of the earliest harvests (2015 and likely 2016) on record.

The “every year is a good year” notion is no longer valid and fine wine consumers are better appreciating and understanding vintage variation. Both 2009 and 2012 were excellent recent vintages, but many producers believe 2015 could be superior.

2015 enjoyed favourably dry conditions and grapes were harvested with remarkable health and excellent acidity. Early tank and barrel samples suggest a richly textured, pure and lively vintage with lower alcohols. As the 2015s reach the market, will it prove to be our finest vintage yet?

4. Expect a new wave of lighter reds, especially from Cinsaut

The global trend of lighter reds is hitting South Africa and thankfully the 15%+ alcohol, massively extracted reds, matured in 100% new oak, have lost favour.

The savvy consumer is seeking wine with more character, freshness and less alcohol. Lighter reds are also more versatile in our warm climate and more food friendly.

Many of these early-picked, crunchy reds are made from the almost forgotten Cinsaut grape, which can offer fine aromatics, lovely depth and wonderful drinkability.

Winemakers are also using Gamay, Grenache, Syrah, Pinotage and Pinot Noir to produce lighter-styled, more natural and unpretentious wines. Some delicious 2015 reds have already hit the market and have received much popularity, including Radford Dale Thirst, Testalonga El Bandito Made from Grapes, and Alheit’s Flotsam and Jetsam.

Producers not willing to adapt to, or at least acknowledge, these changes in the market could slowly lose market share…..

Moneyweb.co.za: Read the full article

http://today.moneyweb.co.za/article?id=552842#.VoznE1IQbiM
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