Never a dull moment! The year got off to a bumpy start, with Agoa negotiations continuing to balance on a knife’s edge. Judging by its first few days, this won’t be a year in which to be chicken.
Besides the looming threat of additional duties of about R7.50 per bottle exported to the US through the suspension of South Africa’s Agoa (African Growth and Opportunities Act) benefits, the drought, fires, a plunging rollercoaster rand and general political and economic uncertainty made sure that most of us hit the ground running after the December holidays.
Deemed to be the year of the shake-up, in 2016 it is projected that more wine grape producers are likely to call it a day or turn to other crops. Trendspotting is a risky pastime, but at the start of the year many opinion-formers confidently stuck out their necks to give their predictions. One of the most common forecasts was the growing impact of climate change, most probably linked to what has been one of the driest vintages in the history of the Cape wine industry.
This is also a consideration in terms of new plantings, with drought- and heat-resistant varieties gaining a larger following among consumers and producers alike. Cabernet Franc was, however, tipped to be the hot variety for 2016 by Bloomberg’s Elin McCoy (a notion that Bruwer Raats will support year after year). Closer to home, Wine Cellars’ Roland Peens maintained that the trend of lighter reds, which according to him are more versatile in our warm climate, is hitting South Africa.
The long-expected surge in alternative packaging to 750 ml bottles could perhaps rather have come in the form of technology that allows wine by the glass with far less spoilage. Wine by the glass – a trend highlighted by Entrepreneur – is growing globally at a rapid pace and is also a means through which brick and mortar enterprises can counter their online counterparts by offering samples, something which is not possible online (yet).
At a macro level, respected economist Mike Schussler suggested that prospects for wine – and the Western Cape in general – are looking much rosier than for the likes of mining, manufacturing and other parts of the agriculture sector. The rand’s record lows could bode well for both wine exports and tourism.
The South African wine industry’s outlook is still also significantly better than that of our nemesis in the market place and on the sports field. Australia uprooted a mammoth 32 000 ha (compared to 1 500 ha in South Africa) over the past five years and this trend is set to continue.
Yes, local spikes in food prices – including a projection that the price of steak will be in excess of R200 per kilogram – will inevitably put pressure on local wine consumers’ pockets. But on the other hand, the 2015 vintage – viewed by many as one of the best in recent decades – is likely to convince many to rather buy less steak!
This special Wine Industry Strategic Exercise issue takes a closer look at some of the initiatives aimed at improving the prospects of wine and brandy industries to assure a sustainable future for a more robust, adaptable and competitive industry.
With the 2016 vintage heading to the cellars, the road may be bumpy, but the wine by the glass remains half full.