Vinimark has over the past few years been taking a closer look at the African market. This is largely due to the growing interest in and appreciation for wine on the continent and the coming of age of South Africa’s export business. The core function of the Vinimark Africa team is to establish strategic partnerships on the African continent while driving the company’s goals and objectives through enhanced supply chain support in the various markets.
Vinimark has taken a conservative view on Africa due to our highly established domestic business and continued growth in traditional export markets such as Western Europe. This has resulted in slower than usual progression in other markets, but at the same time protected us from various macroeconomic factors that could cripple exporters. These range from the oil crisis in West Africa and Angola to political instability resulting in volatility in cash reserves.
Vinimark specialises in building wine brands and we predict this will be the main contributing factor to our long-term success in Africa. We also steer clear of the large-scale dumping of wine on the continent. Having a wide range of products has allowed us to become a one-stop shop out of South Africa for our importers. By focusing on the evolution of wine drinkers Vinimark ensures long-term loyalty and the deep-rooted establishment of our brands.
Africa’s sheer size and population are staggering and with so many economies establishing themselves both economically and socially the door is wide open for the South African wine industry to invest in these markets. Compared with Europe, for example, where the market is highly competitive, the potential in Africa is obvious.
With this opportunity comes a fair amount of risk that needs to be taken into consideration. Without proper planning and strategy, you’ll burn your fingers. You need brands that can last and have the pull to create the loyalty needed to remain relevant. Constant attention to markets, training and developing wine education are vital.
Over the past few years Vinimark has formed key partnerships with reputable distributors in African countries that share our goal of brand exposure through distribution. An abundance of logistical challenges have been overcome and trading and currency risks mitigated through hard work and experience.
– Niel van Velden
Vinimark export manager Africa
Boasting several flagship brands such as Boschendal, Bellingham, Douglas Green, Brampton and Franschhoek Cellars and exports to more than 70 countries worldwide, DGB is one of South Africa’s biggest independent wine and spirit producers and distributors.
Although we have a strong international presence, we have always had an equally strong focus on our South African business. We believe it’s important to have a strong base in South Africa on which to build our international expansion. Brands such as Concha y Toro, Penfolds and Antinori are good examples of great global brands that have a strong presence in their home countries.
DGB’s success in the South African market is due to our ongoing investment in our warehousing infrastructure, distribution capabilities and well-trained, passionate sales force. Our people are the most important asset behind our brands and they epitomise the vision and lifestyle for each brand.
Over the past few years we’ve invested heavily in wine tourism and upgraded the consumer experience at our wineries. These investments are now paying off: The Franschhoek Cellar recently won the award for most unusual attraction on a wine route in the Klink Wine Tourism Awards out of the ordinary category. These awards are endorsed by Wine Tourism South Africa.
Further reasons for focusing on South Africa include: Easy access to the market, allowing you to engage with the trade and consumers more frequently at trade shows and bespoke consumer events.
A rapidly growing middle class with extra income looking for unique experiences and eager to learn about the lifestyle and health benefits of wine.
An opportunity to build sustainable premium and super-premium brands rather than exporting large volumes of South African wine at entry-level prices.
The ability to build a sustainable wine business without being subjected to the effects of exchange rate volatility or competing with zero inflation in most international markets.
In an article published in the 6 December 2016 issue of Business Day, Michael Fridjhon made several observations based on 2015 domestic and export sales that support our view. These include:
South African bottled wine sales are 20% bigger than the combined sales to international markets. The Gauteng market is three times bigger than South Africa’s biggest export market, being the UK. The KwaZulu-Natal market is the same size as the US market. More South African bottled wine is sold in Bloemfontein than in Sweden and Belgium combined. This don’t mean we should ignore the major investment in our international sales teams working in eight offices worldwide.
– Niel Groenewald
Bellingham winemaker & brand manager
As published in the June 2017 issue of WineLand magazine.