South Africa – Trade Talk

WE ASKED: “What should South Africa do to improve its market share in the UK?”

“South Africa needs to continue promoting wines retailing above £5 in order to grow its value market share and to build a long-term sustainable future for the Cape wine industry. We must champion the diversity we can offer and develop areas of the trade where we are currently under performing – the on-trade being a prime example. From a generic marketing perspective, we are also seeking ways to market our wines more agressively to the consumer. We have a good foothold in the UK off-trade now with 10% share and it is time to broadcast our message to this wider audience.”
Sophie Waggett,  Wines of South Africa

“South Africa is currently at a disadvantage compared to a number of its competitor countries in that its wine input costs are at a higher level. Added to this is the continued strength of our currency and lack of export support from government. This makes it very difficult for South African brand owners to compete for the volume area of shelf space required to increase its market share considerably. To increase market share will require a combination of focusing on the sectors of the market that are not as price sensitive and/or a consolidation of suppliers at source to drive the input costs down and in so doing afford South Africa greater opportunities to fight for the price/volume sector of the market.”
Paul Meihuizen, PLB Wines South Africa

 “In the UK it is important now to work with the main retailers, as it is important for them to diversify as well. South Africa should enjoy 12-15% of the UK wine business for the foreseeable future. To increase market share, the South African wine industry can take advantage of the fact that it is not controlled to the same extent by corporations, when compared to countries like Australia. We also need to make a difference between promoting and discounting – ‘20% off’ isn’t a way of promoting a country category.”
Simon Halliday,  managing director, Raisin Social

“I believe that South Africa needs to work at building its price quality ratio in view of the competition, as the average selling price per bottle is falling (driven by BOGOF). This is difficult given the strength of the rand, but essential for long term survival and growth.
A new approach as to how we build the image of South Africa is needed given the slip in the sales of wines over £5.00. The current strategy while correct at the time of implementation is clearly now not working. South Africa working more closely together as an industry and seeing more consolidation in what is still a fragmented infrastructure will be essential given the global competition.”
Gary Procter, managing director,  Edward Cavendish & Sons

“First of all are we talking about volume or value here? I think that South Africa has to concentrate now on only building value because the wine glut that is happening in the rest of the world – that isn’t happening in South Africa – means there is a definite cost advantage for other countries. So we have to get consumers to try the wine, build awareness of the wines and build word of mouth recommendations without spending an enormous amount of money that the industry simply doesn’t have. How to do that is the question no one has yet successfully answered and we have to remember that we are already 10 years or so behind Australia in this. I would suggest there is an opportunity with Chenin Blanc, with Pinotage and with pushing regionality but this all has to be at the top end; that is imperitave.”
Paul Sulivan, marketing manager, Western Wines

“Innovation is vital to creating and building market share. At Graham Beck we are focusing on our vineyards in order to get the best possible quality from our sites. Familiarity is also a vital element in winning the consumer’s heart. South Africa has a strong palette of varietals, both indigenous and foreign, and a fantastic country where the energy and excitement for the future is tangible. With superior quality, intelligent marketing and education we can and will build South Africa’s market share in the UK.”
Lisa McGovern, UK marketing, Graham Beck Wines

“South African wine producers are facing many challenges, and for many, the solution would probably involve a combination of consolidations and more rigorous control of costs throughout the value chain. Producers need the necessary scale economies and leverage to drive their sales and marketing efforts. The challenge for South Africans is to create a more diverse and profitable presence in the UK with an increasing focus on value-added marketing (brand building) activities.”
Johan Hewett, marketing manager,  Omnia Wines

“To grow the category as a whole, South Africa needs to focus its attention on value for money wines, but at higher price points.  South Africa should emphasise its diversity and recognise the potential locked up in the unique character of its wines, rather than try to mirror that of other wine producing nations.”
Bob Rishworth,  marketing director, Halewood

db  March 2006