Marking a week of unprecedented buzz in the Cape winelands and involving all aspects of the industry spectrum – right from core business to lavish Cape cuisine – this event was the biggest and probably most far-reaching of its kind to date. Various WineLand contributors filed these reports on important aspects.

Best South African showcase to date – Su Birch

Cape Wine 2006 has been the most successful showcase hosted by Wines of South Africa (Wosa) since the inception of this biennial exhibition, first held in 2000, according to CEO Su Birch.

“We had close to 400 participants exhibiting across the entire spectrum of winemaking, from one-man garagistes to the large corporates, also including new-entry BEE ventures. The enormous variety of producer offerings gave palpable expression to the Cape’s rich biodiversity and underscored the credibility of our new ‘Variety is in our Nature’ positioning.

“Even for those delegates conversant with the Cape and our wines, the focus on biodiversity and the way we presented our ecologically and socially responsible approach to winegrowing and winemaking was considered fresh and insightful.”

Birch added that while attendance at the Wine Diversity conference was lower than bookings would have suggested – which was a disappointment because many would-be visitors had to be turned away – those who did attend were pleased to have been there.

“They were impressed by the range of local and international speakers, the authenticity of the country’s biodiversity claims and South Africa’s proactive positioning that has factored in the increasing desire among consumers for knowledge of provenance in the face of increasing globalisation.”

Delegates praised the clean and navigable layout of the show, the impactful use of flowers and floral banners to highlight the theme of diversity and, most gratifying of all, a number of producers were able to transact deals at the show.

“This is quite remarkable as, historically, the deals that have flowed from the show have been done after the event itself. And this time, too, we expect there to be more business transacted in the coming months.”

Birch said the breadth and scope of the delegates and the countries represented demonstrated that while the major developed markets remained the key selling destinations, newer emergent market opportunities were also presenting themselves.

The event drew 808 international trade and 87 media representatives, 72 local media and 506 local trade. As was to be expected, the UK had the biggest contingent with 147 visitors, followed by the US with 108, Germany with 101, the Netherlands 78, Sweden 68 and Belgium 45. “But we also had visitors from across Eastern Europe, Asia, Africa and even Brazil.”

All the major UK retailers were represented and buyers from leading European chains as well as trade and media from the US and Canada were present.

“But it is easy for us to be positive. Much more compelling is when journalists who are exposed to trade shows the world over offer their praise of Cape Wine 2006. In a recent article that appeared in Harper’s Jack Hibberd writes: ‘Neither Australia nor its South American competitors can muster an event of such professionalism or international scope, while the distinct element of fun and the enjoyment of wine it contains also set it apart from its European counterparts.

Neither Australia nor its South American competitors can muster an event of such professionalism or international scope.
– Jack Hibberd, Harpers

Wine diversity conference

Our future is diverse

“These are the beating hearts of the SA team,” is how Mike Ratcliffe concluded the last conference session of Wosa’s Wine Diversity day at Cape Wine 2006. The audience in the huge ballroom was rather subdued. If the day’s input of landscapes, wines, visuals and opinions had not grabbed their hearts and imaginations, the eight young winemakers who had the last say, certainly did – in a very emotional way.

The Wine Diversity Conference had a slow start in audience numbers, but a highly charged welcome, with South Africa’s Minister of Agriculture, Thoko Didiza, responsible for the introduction.

“Government has a desire to play a facilitating role in the industry,” was her point of departure, following a special welcome to the conference turnout from the African continent. The Minister voiced her support for the new industry forum, and she described the Wine Industry Transformation Charter as “well thought through”.

She emphasised the need for more extensive market access – particularly in expanding local consumption – to include China, India, South America and the African continent.

Transformation and Empowerment

Gavin Pieterse introduced the “vexing” topic of BEE with the argument that ownership and skills pattern shifts in the wine industry require a comprehensive growth strategy. He sees labour relations and a representative structure in the industry as two potential driving forces, but argues that fundamental repositioning is unavoidable. Gavin was also quick to point out that transformation is a complex issue that should not be over simplified.

South Africa: Alive with Possibilities

“We fix” – that is the spirit of South Africa, according to Yvonne Johnston, CEO of the International Marketing Council of South Africa. Ever the inspiring optimist, Yvonne portrayed South Africans as ordinary humans with extraordinary knowledge, wisdom and talent. “South Africans are doing difficult things well,” she claims, also noting that there is a “tectonic shift” happening in the economy.

Global Challenges to Diversity

Reporting on the Millennium Ecosystem Assessment, the results of which had been released in 2005, Prof Albert van Jaarsveld, dean of the US Faculty of Science, emphasised that there is a homogenising trend in the world. He showed how the species extinction rate had been increasing rapidly and how this is impacting on human well-being. Water is a key global challenge, especially when recognising that there is world-wide currently more water in reservoirs than in rivers.

The Cape Floral Kingdom

Pointing to a huge picture of a small flower, called the Little Cape Wine Cup, Kristal Maze, director of biodiversity programmes at Kirstenbosch proved again how diverse and fascinating our local floral kingdom is. She explained just how unique this kingdom is, and how a stable climate with no mass extinctions, has resulted in a proliferation of species. Now, however, this kingdom is threatened by intensive land use, aliens, fire and urbanisation.

The Biodiversity and Wine Initiative

The challenging paradox of a thriving wine industry against a thriving floral kingdom was put to a largely international audience with their introduction to this initiative. Project director, Tony Hansen, explained how both the wine industry and the Cape Floral Kingdom shared the same footprint, and then set out the initiative’s objectives:

no further loss of biodiversity
positive contributions to conservation
changes in farming practices
benefits to the wine industry.
He reported that 15% of the current industry is already part of a conservation programme, with the amount of land and BWI members growing by the day.

South African Wine: The next 100 years

In a presentation that appealed to the imagination, and engaged very effectively with a large and diverse audience, Wosa CEO, Su Birch, took everyone on a journey – which started 500 million years ago. This related to her claim that the South African wine industry comprises the oldest viticultural soils in the world, in addition to a unique spectrum of plants, exposure to two different oceans and one of the most diverse societies in the world. She reported that 570 wine producers have already pledged to farm sustainably, to be custodians and to respect the culture of biodiversity.

Viticultural Diversity: Challenges of the Cape

Not only the diversity of terroir, but more importantly, the diversity in cultural practices, management skills and labour, are critical to the success of the industry, says Prof Eben Archer, chief viticulturist of Lusan Premium Wines. “The competency of the hands in the vineyard has a direct effect on results.” Fynbos islands in vineyards and corridors for insects are some of the innovative approaches to biodiversity that he highlighted among a vast array of landscape and vineyard visuals.

Promoting Diversity in a Global World

Well-known UK wine correspondent and commentator, Tim Atkin, launched his session with the news that South Africa’s top selling brand, Kumala, has once again changed hands, and is now the property of Constellation Brands. A perfect example of the diversity dilemma – especially if one considers the fact that Constellation could actually now own some wine aisles, with one in four bottles of wine sold in the UK a brand owned by this US giant.

In sharp contrast to this, Atkin waxed lyrically about the “sensational” Fryers Cove Sauvignon blanc – his latest discovery up the West Coast. It is a wine with “somewhereness” that “whispers in your ear”, he claims. The kind of wine that deserves a future in a global world.

Small is Beautiful

What can you do better than anyone else This was the key question posed by brewer Garret Oliver, who is also a council member of Slow Food International. From the perspective of a small beer brewer in the US, he emphasised the integrity of the product and encouraged winemakers to learn to cook. “Winemaking is not about the liquid, but about the art,” he says. Expanding on the concept of family, he celebrated tradition and values that put people around a table and not in front of a TV set.

Successfully Retailing Diversity

Profiling his unique small warehousing business in the UK, Majestic Wine Plc, Tim How brought a different retailing perspective to diversity. He emphasised the human element and claimed that Majestic is the training ground for the liquor trade industry in the UK. He stocks no mass brands and encourages experimentation, learning and tasting.

There are Other Ways: Marketing Wine Diversity

“The entire world of wine producers are all waiting to have deep, meaningful conversations with the same seven individuals,” is James Herrick’s take on the buying power of the UK’s giant retailers. In his role as special advisor to the wine industry, Herrick challenges the industry to invest the 500 million that we will be paying the UK retailers to sell our wine over the next 10 years, in our own chain. “Lead the world in re-inventing co-operative wine retailing,” he begged.

“Move your cellar door to your customers, and control your own destiny.” Herrick also cautioned against what he calls the second oldest trap in the business world: regarding retailers’ demands as your marketing strategy.

The Changing Consumer

Using a selection of market research examples, Crawford Hollingworth, executive chairman of Henley Centre Headlight Vision, put a spread of opportunities to an audience that had expanded considerably by mid-afternoon. “Time and energy,” he claims, have become more valuable to people than money, space or information. Consumers have become affluent, and are less interested in material things than in experiences – which had become the new status symbol. In a post material world people envy those that have 6 months to travel to exotic destinations – not those with expensive new cars. “Experience is the new currency.”

According to Hollingworth, there are three new angles by means of which you can connect with consumers: authenticity, the damaged planet and ethics. In terms of authenticity, people require products “that are personal and lifts the consumer out of the crowd”. Environmentalism has become a celebrity issue and ethical consciousness is now of mainstream interest. “People are willing to change their behaviour and use their money as a vote,” Hollingworth argues.

“Nature and biodiversity are two powerful unique selling points – in an engaging, not crusading context – they are both chic!”

Conclusion

Pieter Visser’s anecdote (during the Elgin site specific wine tasting) about baboons in the vineyard throwing stones back at one of his colleagues became a metaphor for what biodiversity is all about. Several speakers repeated the example in a way that honoured the place and respect for all species, beings and living things that regard the South African wine industry as their home and habitat. The Wine Diversity Conference was an important opportunity to make this visible to an international public, and strengthen the local commitment to this initiative.

– Hymli Krige

Which way in the UK

That South Africa’s largest export market has in recent years steadily become less attractive for local producers is not exactly hard news. A complex jumble of factors including the strength of the rand, a frighteningly large global surplus, the consolidation of retail buying power and a consequent contraction of margins – mostly bemoaned by grape growers – are to blame. Two supermarket buyers and one distributor from the United Kingdom addressed the industry in an effort to answer the provocative question posed by Wines of South Africa (Wosa): “Why bother with the UK”

At this seminar, Mike Paul, lamented various current features of the trading environment in the UK.

These include:

South Africa’s static market share
a 1 billion litre Australian surplus
suffocating annual duty increases absorbed by primary producers
the uncompetitive cost of goods in the SA supply chain.
The above leads to a reduced level of commitment to this, the most sophisticated of wine markets by local brand owners.

However, Paul – CEO of Western Wines and the man credited with Kumala’s rise and rise – is convinced of lucrative opportunities and SA’s potential for growing the niche it has carved for itself in the past ten years among the 130 million cases of wine sold annually in his country.

The market for wine grew by 4% in 2005, while the 5+ sector grew by 20% in the last two years. This, according to Paul, indicates that the average British wine drinker is ‘trading up’ – a trend UK supermarkets are keen to capitalise on, with Tesco, for one, already having announced a sizable expansion of their premium+ portfolio.

Paul lauded UK supermarkets for their “commitment to wine at all price points”, and for positioning wine in the minds of consumers as a destination category (as opposed to products competing in the opposite or ‘convenience’ category).

As chairman of Wosa’s Importers’ Committee in the UK, Paul helps formulate South African wine’s official generic advertising message, thus far directed at the trade and not consumers. Paul admitted that the generic advertising of wine in general does not have a good track record, though confidently added, “we believe we’ve cracked it”. Wosa’s efforts and budget will for the first time target consumers in their upcoming advertising burst this summer. The tagline, subtly incorporating biodiversity, reads, “In South Africa, amazing discoveries happen each year. Make yours in the wine aisle.”

Paul urged producers to “walk the streets” in an effort to know and understand the market and competition in the UK. Retailers, he said, need brands that offer a way of trading up to consumers and points of difference that are brought to the market by proactive suppliers delivering outstanding customer service.

He concluded by urging producers to approach the UK market with confidence and only after having done their homework. South Africa often attempts to enter the UK market with “ill thought-through propositions” and hence lag behind other producing countries in terms of marketing savvy, he said.

Jonathan Butt, wine buyer for South Africa at the Thresher Group, Britain’s biggest independent wine retailer with 2 100 stores, called Fair Trade a “massive” opportunity for South Africa. South Africa has a better proposition in this regard than Latin America, he said.

Butt also cited opportunities for being “first to market” with rosé and Sauvignon Blanc and welcomed Wosa’s move to targeting consumers as part of their generic campaign. “This is Africa,” he urged, “sell the story!”

What do you want to be famous for Butt posed to the audience, urging producers and marketers alike to identify SA’s generic quality cues. Chenin Blanc, he insisted, has not been explored to its full potential for flying the flag for the whole of the South African category.

Justin Howard-Sneyd, recently appointed as buyer for the South African category in up- market grocer Waitrose’s portfolio, suggested SA’s limited success with brands thus far is due to the country’s wines, in most instances, not portraying real authenticity.

Howard-Sneyd added his voice to Butt and Paul’s on the subject of SA’s potential for establishing a unique position in the UK market with Fair Trade. UK consumers have shown their willingness to “give something back” with Free Trade coffee and relief following 2004’s tsunami.

South Africa’s diversity of wine producers from small to large and especially within the small to medium segment is, according to Howard-Sneyd – who until recently was responsible for procuring the retailer’s Chilean range – an enormous strength. “In Chile there is no such thing as a small winery!” he exclaimed.

The three presentations were followed by a lively, if short and frustratingly inconclusive discussion between the speakers and a panel consisting of heavyweight UK journalists Tim Atkin, Jack Hibbert and Chris Orr. Mr Atkin was especially animated on the subject of the ever increasing power of the already mighty UK supermarket chains, saying that a handful of buyers are in effect “closing the category”.

Atkin clearly had an agenda and the appetite to pursue it and went on to suggest that wine in the UK is, in general, under-priced. When a movie ticket in central London costs 9 pounds, why, Atkin asked, are UK consumers not paying more for (entry-level) wine “Because they don’t need to,” he concluded. To the audience’s cheer and delight, Atkin continued hammering the supermarket-led off-trade for not doing more to educate consumers and for squeezing the life out of wine growing. Atkin’s scepticism of UK retailers’ intentions was starkly contrasted with his colleague Anthony Rose’s in a recent newspaper column. Referring to Tesco’s venture into fine wines (50 wines between 4,99 and 18,99 pounds have recently been added to the 750-strong portfolio), Rose tells of a 1 million investment in refurbishment, and says this is indicative of “a genuine effort to raise standards rather than simply dress the shop window”.

One concrete tip offered by the panel had to do with SA’s “enormous” potential in the on-trade. With a wholly different costing structure and much fatter markups, this channel has the potential to reward embattled producers with higher returns. “This is a very, very real outlet for South African wine,” Tim Atkin said. Mike Paul added that producers should take a long-term view and be sure to partner with an agent with experience of and passion for the on-trade.

But before heeding Atkin and Paul’s advice, consider this: Charlotte Hey informed readers of the drinks business in the March edition’s editorial of recent research findings making prospects in the on-trade, and for that matter the independent retail sector, less than rosy. A report of late has indicated that on-trade sales will take an 8% knock when a total smoking ban comes into effect mid-2007. In another study, the All Party Parliamentary Small Shops Group found that most independent retailers and so-called ‘corner shops’ will have disappeared by 2015 if the major supermarkets continue to consolidate buying power.

Ms Hey delivers a strong appeal for the world’s wine producers’ continued investment in the UK market: “don’t underestimate the power of the UK consumer or the opportunities that this market presents,” she implores. She adds that Britons have “a reputation for experimentation” which resonates in a statement of Jonathan Butt’s made at the Wosa seminar.

“The UK market”, he said, “is a market open to everything.” South African grape growers and brand owners will no doubt agree that notwithstanding the need for developing other outlets for South African wine, very few markets, if any, can claim that.

Ms Hey’s closing statement announces a new era in marketing activity in the United Kingdom: “… in order for a brand to survive, its level of direct access to the consumer needs to increase and not necessarily via the traditional routes.”

While we may have answered, “Why bother with the UK” how to go about it remains as challenging as before. Perhaps not the most popular conclusion but one that has to be made is this: changes in the way we do business in the UK may be just what we need, as an industry, in the long run. In the words of Howard-Sneyd: “To have one’s skills honed in the UK market bodes well for one’s business in other markets and makes for a really competitive industry inside and out.”

– Jeanine Wardman

For Africa from Africa …

“Africa should drink its own wines,” was the message from John Platter, the prominent SA wine personality, during an address to an audience including numerous trade delegates from Africa and guests of the SA Wine Industry Trust (Sawit).

At the same time, an inspiring experience was to see the venue for this, a small hall upstairs from the main Cape Town International Convention Centre expo area, bedecked with posters of wines resulting from transformation initiatives. The event took the form of an intimate wine exhibition – called the Sawit Africa Trade Lounge – where the wines of these participants were available for tasting.

The 16 African delegates were brought to Cape Wine 2006 by the dti and expressed great interest in the wines on show. In attendance were the four sprightly ladies from divas uncorked, who happened to be here for the Nederburg Auction during the following weekend – all making for a very colourful gathering which gave another dimension to the theme of diversity, not only of the Cape, but Africa as a whole.

Platter, of course famous for establishing the phenomenally famous wine guide and former trustee of Sawit, said African countries should start supporting each other. France has a problem in that it produces 25% more than it needs … and South Africa gets caught up in the crossfire of such surpluses of the “old order”.

“It’s time we all stood together; we have the quality not to have to go abroad to look for the right product. We have to get to know each other better and, for instance, link up with Algeria which has its own winemaking tradition.

“South Africa is the most advanced of the winemaking countries in Africa, but is willing to share and we could have good relationships in wine terms. We can run a ‘Proudly African’ campaign.”

Platter was supported by wife, Erica, who in a brief address suggested that there could be Pan-African winelists at guest houses.

The chairman of Sawit, Gavin Pieterse, said, “We must find markets that are the most immediately accessible. And we can compete with the African currency.”

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