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South African wines might not be sexy enough to take the global market by storm.

This according to Jane Robertson, category development director at Accolade Wines in the UK, at the annual Nedbank VinPro Information Day in Cape Town.

Following strong growth, South African wines have fallen back 7% in value and volume in the UK – a market which represents 28% of total exports. 

Although 71% of UK adults buy wine, new entrant figures are dwindling and consumers look for bargains. Close to 60% of South African wines are sold at below 5£, with very little mid-tier wines and a few popular brands in the premium category.

In the off-trade, consumers want simplicity, leading to many UK retailers cutting their shelf space significantly. “Retail gatekeepers also don’t have the love for and belief in South African wines,” said. Robertson. 

She encouraged the industry to start building brands in the on-trade, where sales are looking more positive. “Piggyback on the trend towards South African cuisine and make sure your brand is recognised and trusted by consumers.”

For the South African wine category to become more appealing, it needs to create a credible mid-tier, which will help consumers discover the great wines South African has to offer – and get the retail gatekeepers on its side. “Use native varietals such as Chenin Blanc and Pinotage as heroes to set your wines apart,” said Robertson.

Although international varietals such as Sauvignon Blanc and Shiraz have helped the category grow, but growth in these categories will most probably be driven by Australia, Chile and New Zealand.

“A lot of the same consumer trends are seen throughout the world,” said Robertson. Premiumisation is one of the leading influences on market trends at the moment. Wine knowledge is improving – along with greater experimentation with wines – and consumers are increasingly interested in craft products, such as craft beer. “Winemaking is a craft – we could own this if we just apply ourselves,” she added.

Consumer demands are currently driven by millennials and females – particularly bringing about growth in sales of prosecco and a trend towards sweeter, fruitier wines.

According to VinPro MD, Rico Basson, the UK and Germany represent nearly half of South African exports, with good growth potential seen in China, the US and African markets such as Angola. These are the key focus areas of the Wine Industry Strategic Exercise (Wise), through which the industry aims to increase both the volume and value of wine sales. 

By 2025 the share of South African exports to the US and China should each have increased to 7% (compared to 1% and 2% respectively in 2015), with a goal to grow the African export share to 10% from 5% in 2015. “Following extensive research, we now know what these consumers want and have a strategy in place to get to these targets. What is crucial, however, is for each role-player in the wine value-chain to make this strategy their own,” said. Basson.

For more information on the WISE export growth strategy, visit: www.winesouthafrica.info

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