South Africa’s wine industry has long been synonymous with value. For years, consumers across the globe have delighted in the country’s ability to deliver wines that outperform their price tags. Yet this very success may be leading South Africa down a dangerous path. While offering great value has undoubtedly attracted buyers, it’s increasingly clear that selling top-tier wine at bargain-basement prices might be holding the industry back from its true potential.
The question is: has South Africa become a victim of its own success?
The answer may lie in how the industry is positioning itself globally—and whether its wines are priced to reflect the true quality they deliver.
The Price-Quality Conundrum
At the heart of the issue is the dichotomy between the quality of South African wines and the prices they command. As Tim Atkin MW points out, “South African wine is too cheap… There’s no reason for somebody to trade up from an eight-pound bottle to a fifteen-pound bottle.” This isn’t a criticism of the wines themselves—it’s a recognition of a structural problem within the industry. Simply put, consumers are getting more than their money’s worth, but that’s not necessarily a good thing.
Wines that should be celebrated as premium offerings are priced at everyday levels, making it difficult for South African producers to convince buyers to pay more for their high-end products. This situation is compounded by the fact that many consumers are unaware of the true quality of South African wines because they associate low price with average or modest quality.
The wine world often thrives on narratives: France’s Bordeaux blends are coveted for their depth and aging potential, and California’s Napa Valley commands high prices for its powerful Cabernets. But South Africa, despite producing wines of similar quality, remains pigeonholed as a “value” producer. If the country doesn’t change this narrative soon, it risks undervaluing itself in the eyes of the global market.
Price Wars and Profit Margins
South Africa’s low pricing strategy may be working well for consumers, but it’s creating real challenges for producers. Many South African wineries are operating on razor-thin margins, particularly small- and mid-sized producers who struggle to remain competitive while facing rising production costs. Atkin is blunt on this point: “South Africa’s price is too low for its own good.”
This low pricing model leaves little room for reinvestment in crucial areas like sustainability, innovation, and marketing—all of which are key to the long-term success of the wine industry. Without the ability to reinvest, many producers risk stagnation or, worse, falling behind in a global market that is increasingly demanding innovation and environmental responsibility from wine producers.
The issue isn’t unique to South Africa. Other wine-producing countries, like Chile and Argentina, have faced similar challenges. Both have historically been known for producing good, affordable wines, but they’ve had to evolve their strategies to stay competitive. Chile, for instance, has successfully shifted its focus to terroir-driven premium wines, while Argentina has had to raise its prices out of economic necessity due to extreme inflation. In both cases, the push toward premiumization has helped these countries reposition their wines on the global stage.
Why Consumers Aren’t Trading Up
Convincing consumers to pay more for wine is no small feat. Many people have grown accustomed to South African wines being associated with affordability, and breaking that perception is a significant challenge. For South African producers to succeed in raising prices, they must offer a compelling reason for consumers to trade up.
This is where South Africa’s rich winemaking history and unique terroirs could be its greatest asset. South Africa boasts some of the world’s oldest vineyards and a remarkable diversity of climates and soils, from the cool coastal regions of Hemel-en-Aarde, perfect for Pinot Noir and Chardonnay, to the sun-baked Swartland, known for producing expressive, terroir-driven Chenin Blanc and Syrah.
The challenge for South African producers is to communicate the story of these wines effectively. Consumers need to understand that paying more isn’t just about getting better wine, but about investing in a story—a story of place, craftsmanship, and sustainability. Atkin recognizes this, explaining, “There’s no reason for somebody to trade up from an eight-pound bottle to a fifteen-pound bottle unless the industry gives them one.” This is the crux of the issue: how does South Africa give consumers that reason?
The Sustainability Edge
One of the most compelling reasons for consumers to trade up could lie in South Africa’s commitment to sustainability. As Atkin notes, “Ethical production and sustainability could play into South Africa’s favour if marketed properly.” The global wine market is increasingly driven by consumers who are not only interested in the taste of the wine but also in how it is produced. Organic, biodynamic, and Fairtrade certifications are becoming more important to a growing segment of environmentally and ethically conscious wine buyers.
South Africa is already making significant strides in this area. Many wineries are embracing sustainable viticulture, with some adopting regenerative farming practices and aiming for organic certifications. Bosman Family Vineyards, named Viticulturalist of the Year by Atkin, is one such example. They have pioneered sustainable practices, focusing on drought-resistant varietals and reinvesting in their community. This holistic approach to winemaking—one that prioritizes both the environment and the people—could be the key to shifting consumer perceptions of value.
By tying price increases to sustainability efforts, South African wineries can make a more compelling case to consumers. They can move beyond simply being a source of good, affordable wine and become leaders in ethical and sustainable winemaking. This, in turn, can help justify higher price points while allowing producers to maintain their integrity and appeal to a new generation of wine consumers.
Changing the Narrative
The path forward for South African wine lies not just in raising prices, but in fundamentally changing the narrative surrounding its wines. Consumers need to be educated on why South African wines deserve a higher price tag. This involves not only marketing the uniqueness of its terroirs and the quality of its wines but also highlighting the ethical and sustainable practices behind those bottles.
The goal isn’t to abandon South Africa’s reputation for value entirely, but to reposition that value. Instead of being seen as “cheap” wines that overdeliver, South African wines should be seen as premium offerings that reflect the true skill, history, and effort behind them.
As Atkin puts it, “South Africa needs to raise its prices while maintaining its reputation for quality.” This is a balancing act that will require a strategic shift in how the industry markets itself, but it’s a shift that must happen if South African wine is to thrive in the long term. The time has come for the industry to embrace its full potential—not just in terms of quality, but in terms of value. After all, the world’s best wines aren’t cheap, and South African wine shouldn’t be either.
