The wine industry is under strain due to international wine surpluses and strong currencies that jeopardise the profitability of all wine farmers. Therefore new mindsets are needed about, among others, restructuring the supply chain, right through from land ownership to the markets.
This was the message from the seminar Winds of Change for the Cape Wine Industry, presented by Cape Vine Nurseries, a leading Wellington-based rootstock supplier.
And, although the various presentations left the clear impression that the wine industry has reached a crossroads, some very positive developments and guidance also emerged – none other as encouraging as that from unusual quarters, namely Minister Mosiuoa Lekota.
Yes, the Minister of Defence – himself co-owner of a wine farm in the Free State – was very positive about the quality of South African wines and great opportunities for the industry. With regard to land ownership, he assured that the developments in Zimbabwe had been a “sobering lesson”.
In his keynote address, Lekota added that the South African government was not planning to “reduce the country’s agricultural industry to subsistence farming”.
However, Lekota appealed to wine producers to be empathetic and sensitive about past injustices and supportive of the government’s land restitution aims, emphasising that ownership must be “built into the business over time, or else it would not be sustainable”.
He urged wine farmers to treat labour as a partner in their businesses and said that training was vital in making wine growing more profitable. “The labourers have to feel like they have a stake in the wine industry.”
Referring to the largely white audience there in the Lord Charles Hotel Conference Centre, the Minister said it showed what transformation challenges still lay ahead. If the workers were genuinely involved in the decision-making structures of a company and in the ownership thereof, production would improve significantly and profits need not be significantly low.
Lekota expressed concern about the large proportion of winelands property in foreign hands. “We must ask ourselves if that is the right strategy for South Africa and what this situation holds for the future of our children.”
The agricultural industry in general was one of the instruments through which the country could create more employment opportunities and earn foreign currency. But the industry was facing severe financial pressures due to world-wide surpluses, low levels of profitability and, in the case of the wine sector, huge costs of replanting vineyards.
“If the industry has to turn around, there will have to be a new will and an acceptance that ours is now a competitive world in which the big powers dictate the rules of the game,” said Lekota.
One of presentations that followed, dealt with the international cultivar and wine style trends, presented by Jacques Roux, marketing director of Douglas Green Bellingham. He stressed that with wine being an agricultural product, enjoyed in a fashion-oriented environment, decision-making was complex with regard to the choice and volume of cultivars to plant. Significant trends are the growing popularity of rosé wines the world over, especially in the USA. South African wine producers should consider producing more dry rosé similar to those from the Southern Rhene, France. A varietal whose popularity had soared significantly was Pinot Grigio, which could be worth considering to plant locally as something new.
Sauvignon Blanc, as a single varietal or blended, with Smillon and even Nouvelle, could impress the Americans. Sauvignon Blanc had a strong following in the US. Pinotage remained South Africa’s Unique Selling Proposition (USP). Both old vine Pinotage and Chenin Blanc could offer a unique angle to market wines abroad. And the Cape Blend was “a definite proposition”. Roux urged growers to plant according to the sites and soils available on with a quality-driven approach.
Another marketing expert, Koos Jordaan of Cape Coastal Vineyards, spoke on the realities of export markets versus the domestic market, saying “there is no simple answer”. But benefits of the domestic market were: The sentiment that “local is lekker” and the benefit of having a reachable, familiar address in the country. Then there’s a huge potential of growth with the low per capita consumption and expanding consumer base, easy packaging standards required and few import bands.
“But perhaps our focus in the past was wrong … we should be take wine to the people.
“Remember, South Africa is the second most important market for South African wine, after the UK.”
On the technical side, Bennie Diedericks, soil scientist of Ocean Agri Science stressed that a sustainable and healthy crop is dependant on the health and diversity of the soil-life.
The biodiversity below the soil surface is far greater than that above the surface, also more fragile. He called for careful consideration of the impact on soil-life of cultivation practices – such as irrigation, drainage, pesticide programmes, fertilisation, crop selection – in a world increasingly more conscious of the environment. Nico Spreeth, manager of KWV Vititec, said that the demand for white cultivar plant material was still growing, except for Chardonnay, while the demand for certain red cultivars was also still growing, namely Pinotage, Red Muscadel, Nebbiolo and Sangiovese. At the same time demand for Ruby Cabernet was rapidly decreasing.
The impression left by the seminar was that, despite the world-wide wine surpluses and current local red wine oversupply, producers should not neglect replanting with better red material and later get caught napping when demand swings around again. This also particularly in view of the excellent new wine plant material now available. Important to realise is that, compared with other New World wine producers, we can only compete with Sauvignon Blanc in terms of area under vines. Francois Viljoen, manager of the VinPro Consultation Service – speaking on Future Challenges for Vineyard Management – urged all producers to increase the profitability of each vineyard block. “We must know the market need, the wine style specifications and price points and decide for which market or product each block is planted and managed.”
“Be informed and apply the latest technology and practices. We must ask ourselves whether we don’t have an exaggerated, unscientific perception that lower ton yields per hectare necessarily mean higher quality.”
“Take it slow, analyse and plan thoroughly, tighten the belt and remember you’re in a survival phase,” was Francois’ advice, quoting the popular Afrikaans song:
“As die wind daar waai soos hy nou daar waai
Hy waai my teen ‘n taaibos vas
Hy waai my hier en hy waai my daar
Hy waai my hare sommer deurmekaar
Stadig oor die klippertjies …”