Delegates from the global wine industry descended on Cape Town in September for the Cape Wine 2018 international trade show. This theatre spectacle showcases what the South African wine industry has to offer.
Although Cape Wine 2018 was a colourful kaleidoscope of exhibitors, wine varieties, seminars, speaker’s corners, conferences, themed tasting areas and just about every South African wine brand under one roof, the event was also a platform for the local trade to voice its concerns about some of the more pressing issues facing the industry.
The 2018 event was themed around economic, environmental and social sustainability, using the hashtag #Hannuwa – an ancient San adage that highlights the importance of living in balance. The pricing crisis and subsequent sustainability of the South African wine industry were hot topics at the event. These issues reached boiling point when DGB decided to release a well-timed video documentary titled ‘The inconvenient truth about South African wine’. Directed mainly at foreigners, it applies equally to the local trade. To top it all, acclaimed international wine critic Tim Atkin (MW) released his seventh annual South African Special Report 2018 and awarded his first ever 100-point score in the New World to South Africa’s Kanonkop Paul Sauer 2015.
Tim Atkin’s report, lauding the Cape’s 2015 and 2017 vintages as South Africa’s “best ever harvests”, added more fuel to the fire, leaving many producers, wine traders and winemakers with the burning question: “If our wines are so good, why are our prices still so low?
”South Africa is still burdened by high unemployment, high inflation and a volatile rand. Add to this cauldron the recent VAT increase and drought, which resulted in an estimated direct revenue loss of R700 million and winemaking in the Cape becomes increasingly expensive.
Yet, wine prices are not rising, sufficiently.
With sustainability high on the agenda, keynote speakers highlighted structural issues in the Cape’s industry that need to be overcome to bring greater profitability to South Africa’s winemaking fraternity against a backdrop of global uncertainty.
In her presentation Wines of South Africa (WoSA) chairperson Carina Gous said that while exports have risen to 52% of production, they consist mostly of bulk wine, while higher-priced bottled exports remain small. Of all the biggest wine-producing nations in the world, South Africa has the lowest price/litre – even lagging behind Chile. Carina says there’s a need to increase prices and the wine industry can’t continue to look after its people and communities unless it has partners. “We have a lot of uncertainty in South Africa,” she says. “Profitability remains a huge challenge. About a quarter of grape producers have left the industry in the past 10 years and the areas under vine have declined.”
But it wasn’t all doom and gloom. Rick Tigner, CEO and president of global wine conglomerate Jackson Family Wines, spoke about why international investors have invested heavily in the South African wine industry. “South Africa’s future is greater than its past,” he says. “The most impressive thing about South Africa is its beauty. I love this place! We’ve invested here because we believe South Africa’s wine industry has a lot of potential for growth.”
To improve sustainability, Capensis is focusing on cultivating biodiversity by removing alien plant species, creating wildlife corridors and restoring natural springs. Part of its sustainability philosophy is water saving through drip systems and irrigation control, and implementing state-of-the-art water-saving and solar technologies.
Remgro investment executive Raymond Ndluvo and cofounder of artisanal premium winery Black Elephant Vintners spoke about the sustainability of the industry through effective transformation. “Holistically speaking, sustainability is the bedrock of transformation,” he says. “We need to change the depth, breadth and structural integrity of the industry to ensure true transformation.”
To help meet those aims, WoSA and the industry at large have made several commitments centred on developing people in the industry and moving them up the ladder. The wine industry currently employs 300 000 people directly and indirectly, and the aim is to increase this number to 375 000 people by 2025.