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Take-outs from Cape Wine 2015

This was SA putting its best foot forward in a superbly organised affair, and selling its quality, variety and astonishingly beautiful terroir/winelands as something truly unique.

The three-day event featured about 350 producers, out of the 600 or more now operating. Organisers, Wines of South Africa (WOSA), have called it the biggest wine show to be staged in the southern hemisphere. They had lots of DTI support, too, who funded the ferrying of a throng of selected buyers and journalists from every corner of the world.

Cape wine scenesAt the tipping point

Speaking at the opening of Cape Wine, WOSA CEO Siobhan Thompson has said the SA wine industry is ‘still a work in progress’ and that more needs to be done to penetrate the premium end of the market, an ongoing lament for many years now. Thompson said the industry must build its distribution networks so that ‘when people ask for our wines they will always find them’.

However, the WoSA head added that the picture is improving thanks to overseas interest. ‘Ongoing investment in our wine industry by Europeans, North Americans, Indians and the Chinese is a mark of affirmation,’ Thompson said. ‘It is an endorsement of our history that carries weight and generates interest.’

Also speaking at the opening ceremony, WoSA chairman, erstwhile super-banker, Michael Jordaan, said that innovation will play a key role in South African wine’s future.

‘We have an industry that despite its success in exports is still in its infancy,’ Jordaan said. ‘I believe we are at a tipping point where all the cumulative innovations will start trading results.’

The past is another country

While SA the oldest of all the New World producers, with a heritage going back some 350 years, Thompson said it is now 21 years since South Africa emerged from its apartheid past and became a democracy, and that the wine industry in the apartheid and post-apartheid eras are very different. In this sense she likened the 21-year period as a coming of age and hoped that for South African wine, it meant the industry is past its growing pains and can now mature into a thriving industry.

Take these simple facts: in 1992, the country produced 22m litres of wine, now it’s 422m; the number of wineries has jumped in the same period from 200 to 600.

However, the industry is still plagued by its pre-1990s reputation for bulk, low-quality wines, mainly the upshot of the KWV quota system, which limited the number of vines farmers could grow, and international sanctions which meant growers were unable to obtain new vines.

Time to dump cheap and cheeful

South Africa may export half of its wine production, but half of those exports are in the form of bulk wine bottled on arrival by – in the case of the UK – supermarkets looking to extract higher margins from discount labels. It is a pre-apartheid legacy that SA’s producers are eager to overthrow.

‘Why are we always at the bottom?’ asked Jacques Jordaan, marketing manager for Stellenbosch winery Simonsig. ‘The costs of doing business here are just the same as in other countries – Stellenbosch is prime real estate. There’s no reason that we can’t do the same as New Zealand, where their Sauvignon Blanc sells like hotcakes.’

According to Jordaan, the industry needs to work together to ensure higher prices at the premium end, although he acknowledges that will take time.

That is also Emile Joubert’s prescription, but the veteran South African wine marketer takes a different approach. He says wine making skills have improved enormously since the advent of democracy (‘nothing like an inferiority complex to get your arse in gear’) but the industry lags in creating a unified, simple message that it can use to sell to the rest of the world.

‘We have to discover the power of brands,’ said Joubert for whom the most important brand is South Africa itself.

‘If you ask people ten things about South Africa, wine will not feature at all,’ he said. ‘That would be unthinkable if you did the same with France or Italy. For France, the image of the man on his bicycle with his baguette and bottle of wine is clear to everyone. We don’t have that in South Africa.’

Several steps are being taken, including the launch this year of the Cape Vintner Classification (CVC), a system of accreditation that is trying to raise the profile of South African premium wines as a group. Nineteen wineries, including Graham Beck, Simonsig and Waterford Estate are already on board, and organisers hope that as many as 50 will eventually be included.

Entrants must meet a number of qualifications – they must be an estate wine, have more than five vintages and be accredited for ethical and social responsibility. (No other wine-growing region has to contend with these complex and costly issues, and most are goverment subsidised, too!)

‘We’re very fragmented as an industry,’ explained CVC chairperson Francis Bayly, one of South Africa’s first Masters of Wine and a former board member at Distill. ‘We are trying all kinds of things and we’re hoping this seed that we plant will bring the industry closer together. We can raise the whole image of the industry – and the quality.’

The CVC is also trying to ensure that producers sell their wine for what it is worth, and wants them to sell their premium wine in, for example, the UK for no less than £10 a bottle. ‘But, now wine is selling for £4,’ said Bayly. ‘Where’s that going to get you? We don’t want to be in the cheap-and-cheerful market.’

Bayly said South Africa’s problem is that it has a product as good as any in the world, but few consumers are willing to pay premium prices for it. He likens it to Skoda, Volkswagen and Audi – the cars are all made by the same company, and use the same basic structure, but the Audi sells for twice the price of the Skoda.

‘I think we as an industry are coming closer together and working closer together, for the benefit of everybody in the industry, for the thousands of people that we employ,’ Bayly says. ‘If we don’t work together there is no future for us.’

Despite, this however, Bayly believes there is still a future for South Africa’s bulk wine, but as a commodity so that its volume is a value and not a hindrance. ‘We can’t drink all the stuff ourselves,’ Bayly said. ‘I tried, but it was bloody difficult.’

Michael Jordaan noted in his opening speech that was immensely frustrating that top-end, not even premium end, Napa wines can retail for $1000 p/b, while a Cape wine of even better quality would only fetch $100.

Those cheeky Swartlanders

‘Rule-breaking’, ‘trailblazing’, ‘daring’, ‘superb’ and ‘exciting’ are the adjectives increasingly linked to South African wines, and none so descriptive of the so-called ‘Swartland Revolution’ that has been a shot in the arm for the South African wine industry.

This group of about 30 young and enthusiastic producers, whose wines fall under Swartland Independent Producers’ (aptly SIP) umbrella, were at Cape Wine in force.

Almost doing for wine what craft brewers have done for beer in SA, they have won plaudits across the world for their freshness and flavour using less famous (for South Africa) grape varietals such as Grenache, Mourvedre and Picpoul, a variety of wine grape grown in the Rhone Valley and Languedoc regions of France. That, in turn, has seen other producers show an interest in the varietals. However, almost six years on from SIP’s creation, that attention is beginning to cause some problems.

SIP member David Sadie started producing Swartland wines five years ago and, together with his wife Nadia, operates four labels. But, whereas before it was easy to negotiate contracts with farmers in the region for grapes, increased competition from a growing number of Swartland wineries is now pushing up prices.

Also, the buying power of bigger companies is, says Sadie, marginalising small producers such as himself. The only leverage he has, he claims, is through his strong relationships in the region and the contracts he can offer that are more beneficial to farmers.

There is, however, an understanding within Swartland’s new generation of wine makers that increased grape prices are beneficial for the industry.

Additional sources:, Cape Wine 2015

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