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Top South African labels gaining traction
Exports of premium and super-premium wine styles from the Western Cape grew significantly in 2020, according to a recent report by Wines of South Africa.
Its data shows that the overall value of South African exports increased by 7.7% to just over nine billion Rand last year. Nations which saw a positive uplift in value sales included the UK (28%), The Netherlands (19%), the US (12%) and Sweden (17%).
In addition, the popularity of the Cape’s signature grape varieties, Chenin Blanc and Pinotage, was evidenced by the growth in export values of 13% and 12% respectively.
“Although the industry is facing a turbulent period, it would appear that total exports were only 0.2% down on 2019’s export figures,” said Mike Ratcliffe, managing partner at Vilafonté winery in Stellenbosch.
“Despite a drop in volume at lower price points, it is heartening to see continued growth in the premium and super-premium segments, with very solid growth in value and volume.
“The super-premium segment showed growth of 37% in volume, which is a remarkable result and reinforced the massive growth at the top end of the South African wine industry,” he added.
Ratcliffe said that after a slow start, global consumers were increasingly taking the country seriously as a producer of fine wine.
“Regarding Vilafonté, we are approaching 30% YOY sales growth in the UK,” he said. “In late January 2021 our annual Wine Society en primeur offer was released and it sold out instantly.”
South Africa is not alone in a heavy dependence on bulk wine revenues and cut-price supermarket wines. Many of its winemakers have been campaigning for years for higher prices, and a stronger emphasis on premium exports.
“We have to ask for higher prices, and have the guts to stay there. If we keep discounting and cutting our margins, we will never gain respect,” said DeMorgenzon’s chief executive, Carl van der Merwe.
However, some members of the UK trade report that selling upmarket South African wine is still an uphill struggle.
“Between £20-40 we stock a dozen wines, all of which sell through reasonably well, and certainly better than they did five years ago,” explained Jeroboam’s wine director, Peter Mitchell MW.
“But above the £40 mark it requires a concerted effort to private clients, backed up by a tasting or a fantastic review to sell any volume and retail shoppers aren’t yet that interested.”