Groot Expectations: South Africa Wine Report

P1070420South African wine is not as well known as it should be (and soon will be) here in the United States, which is both surprising and not. You might think that South Africa would have a higher profile given its long history and large wine production, for example.

Cape winemakers produced about 10 percent less wine than Chile in recent years, about 10 percent more than Germany and about four times (!) the total wine production of New Zealand (according to OIV statistics).

That, my friends, is a lot of wine. Given those figures and how ubiquitous Kiwi, German and Chilean wines are, you might expect to see a South African wine on every shelf or nearly so.

South Africa Surprises

But numbers aren’t everything in this case. South Africa produces a lot of wine and much of it is consumed at home or shipped off to Europe, the traditional export market for more than three hundred years.

The lack of a strong presence in the U.S. market is due to this and to other factors. The South Africans like to say that Americans don’t seem to know very much about geography and I think this is true although not exclusively a Yankee trait.

Some Americans are surprised to learn that South Africa is a country and not a region, for example, but even my friends who follow soccer and therefore know that South Africa is the country that hosted the 2010 World Cup are often surprised to learn about South African wine.

The Invisible Wine

Ignorance is therefore one reason why South African wines are not better known but there are others. South Africa reentered the global wine market in the 1990s, which in retrospect was a critical moment for the world of wine. Australia, New Zealand, Chile and Argentina all had “coming out” parties within the span of a few years. It wasn’t always easy to get noticed with so much new wine on offer.

Easy to get lost or forgotten — ask Bulgaria, which had previously had an important presence in UK supermarkets! South African wines were among the replacements in the UK, but had less success in the US market, which is structurally difficult to penetrate and hotly contested by both domestic and international firms. Add to that logistics issues and some early problems with consistent quality and you can begin to see why South Africa got off to a slow start.

But times have changed and Sue and I wanted to see how South Africa was changing, so we flew to Cape Town where I gave the keynote speed at the NedBank VinPro Information Day program, a meeting of more than 500 wine industry leaders, and tried to learn as much as we could in a short (three week) period of time.

Intense and Extreme

It was quite an intense (and extreme) experience as we visited 30 wineries, talking with owners, winemakers and export and marketing executives. I will paste the list of wineries at the end of this post to give you some idea of who we met and where we went. This was Sue’s first visit; I was here in 2012 to open the Nederburg Auction (click here to read about that visit and to see all the columns about South Africa).

A lot has changed in just a short period of time and I will be writing about what I learned in the next few Wine Economist columns. Perhaps the biggest change I found was in a clearer sense of direction.

When I visited two years ago many winemakers knew that they needed to explore new paths (entering or reentering the US market was the most common topic of conversation but perhaps that’s because of my American roots), but when and how were usually questions without answers. They had some idea of what had not worked in the past, but no clear sense of what to do differently this time.

Great Expectations

Fast forward to our many conversations this year and the change is dramatic. Many perhaps most know what they want to achieve and they have developed clear strategies to get them there. The plans are not all the same (nor should they be) and they probably won’t all succeed (that’s the wine business for you), but there is a certain confidence as they put their best feet forward. We were impressed!

Next week I will tell you more about our reasons for optimism about South African wine. And then, since I am an economist, some necessarily dismal science perspectives since wine is such a difficult game and dark clouds and silver linings are difficult to separate.

Finally, we want to tell you about a few of the extreme wine people we met on this trip. Wine is a people business as most of you already know and it is the people of South African wine who are the greatest reason to be optimistic about its future.

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The image at the top of the page is a painting of four seasons of wine at Klein Constantia Estate.

Here is a list of most (but not quite all) of the wineries and winemakers we visited on this trip. Special thanks and deep appreciation to everyone who took time to meet with us!

Groot Constantia

Klein Constantia Estate

Cape Point Vineyards

Lanzerac Wine Estate

Glen Carlou

Paul Cluver Estate

Spioenokop Wines

Iona Vineyards

Joubert-Tradauw

 De Wetshof Estate

Excelsior Estate

Springfield Estate

Van Loveren

Durbanville Hills

DeGrendel Wines

Diemersdal Estate

Fairview Winery

De Toren Private Cellar

Jordan Winery (Jardin in the U.S.)

De Trafford Wines

Warwick Estate and Vilafonte

Waterford Estate

Backsberg Wine Esate

Stark-Condé Wines & MAN Vintners

Rupert & Rothschild Vignerons

Anthonij Rupert Wines

La Motte

Kanonkop Wine Estate

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3 responses

  1. I recall living in Greenwich ST in themed ’80s and seeing SA wines being closed out by shops for political reasons. Considering the time it takes to gain the “15 minutes” in the USA market, this must have been a setback for them (although it seems a long time ago…)

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