Transformation in action

by | Apr 3, 2018 | Business and Marketing

The need to transform is a topic that crops up at some point in every conversation about the wine industry but it’s not always clear what progress is being made. We checked in with those doing the work and hear from people whose lives have been changed as a result.

 The Wine Industry Strategic Exercise (Wise), which represents a collaborative effort between roleplayers in the industry to strengthen the wine and brandy value chain, set its sights on 20% of land and water being black-owned by 2025. This ambitious target requires a determined and sustained focus on and investment in black-owned brands, skills development and socio-economic improvement. At this year’s Vinpro information day MD Rico Basson reported that almost 20% (R72 million) of the industry’s statutory levies had been invested in transformation over the past four years.

The SA Wine Industry levy is funded by the industry and its stakeholders must be equally represented. Reaching consensus on the ins and outs of a task as important as the demographic reconfiguration of the wine industry is not unlike steering a large freighter with valuable cargo through the Cape Town CBD at rush hour. At the helm of this freighter is the SA Wine Industry Transformation Unit (TU). It provides guidance on good governance, stakeholder consultation and strategic oversight of transformation projects. Vinpro transformation and development manager Phil Bowes likens the TU to “a cauldron of ideals and viewpoints on how best to fund and implement the kinds of development programmes that will help the industry move its transformation agenda forward”.

Only in its third year of existence, the TU has already made a tangible difference to the many businesses and people who rely on it for funding and expertise.

Fostering passion

Kate Jambela and Graham Knox of The Township Winery can testify to the TU’s contribution to stimulate the development of black-owned brands. They say help received from the TU pays dividends far beyond its immediate benefits and has a ripple effect that extends to others down the line.

Graham works with passionate new growers and enthusiastic wine-lovers from the townships. People like Arleen van Wyk of Mikpunt township. The Township Winery also helps previously disadvantaged people become vine growers and thanks to help from the TU these cases are on the increase. “The recent interventions by the TU have stimulated the pace of development of The Township Winery’s community-involvement township projects,” he says. “Faster cash flow, greater stockholding and increased reserves have strengthened the business as a result.”

Graham also praises the TU’s foresight for providing legal mentorship. The Transformation Unit is in a position to assess the needs of its clients objectively and is determined to support outcomes that will benefit businesses beyond mere sales targets. “Funds for licensing would normally be low on the priority list for sales-driven brand owners,” he says.

Once a novice himself with a love of Sauvignon Blanc but not much brand experience, Graham is grateful for the series of boosts the TU has provided. “I’ve learnt how difficult it is to start from scratch in wine without a pile of capital and borrowable assets,” he says. “I look forward to many more years in this creative industry, no matter how challenging.”

Dreaming big

For Ntsiki Biyela of Aslina Wines, the TU has been instrumental in helping her turn a dream into reality. “It’s difficult for small businesses to get support from the banks even if your idea or proposal is sound,” she says. “The TU helps in these kind of situations and ensures hopes and dreams don’t come to nothing. TU funding helped me scale up my production. My market was growing fast and I needed to have enough wines. The funds came at a time I needed them.”

The TU’s focus extended beyond simply helping Ntsiki meet the current demand. To ensure the business had a solid foundation with a viable future, the TU helped Ntsiki set up an American trademark and contributed to the cost of travelling to Germany to meet with her importers.

Ntsiki was voted one of Fortune magazine’s 20 Most Influential Women in Food & Wine 2017 and is a mentor to young disadvantaged students at the nonprofit Pinotage Youth Development Academy (Pyda) where she is founding director.

Building brands

TU funding helped Cape Dreams Wines reach 20 international markets and achieve sustainable growth. Similarly it helped Bayede! Royal gain listings at major retailers and provide sustainable jobs for the rural women who provide the beadwork for their wines. It also made it possible for Thembi Tobie’s Thembi & Co to look forward to launching its second label at Prowein, which took place in Düsseldorf in March.

And with the help of TU funding, Seven Sisters adopted a sustainable business plan, while
its tasting room has been converted into the only South African restaurant that exclusively markets black-owned wine brands.

Opening doors

As part of its mandate to support new-enterprise development, the TU helped establish the Treasure Chest Initiative (wineshows.co.za) as a marketing platform to help especially black-owned businesses gain market exposure.

The Treasure Chest gave The Township Winery a welcome opportunity to meet potential buyers in South Africa’s major markets outside the Cape. “Retailers and consumers in Gauteng, Bloemfontein and Durban have been unaware of black involvement in the wine trade, so this exhibition created interest.”

Thanks to TU funding the Treasure Chest was able to introduce wines from the African Vintners Alliance to wine industry buyers and consumers in the major cities Bloemfontein, Durban, Pretoria and Johannesburg. The success of the campaign left a lasting impression among exhibitors and attendees alike and has opened doors for many of its participants, including M’hudi Wines. Malmsay Rangaka of M’hudi says the prospects of transformation and business development in the industry look promising – and with good reason. Due to the excellent exposure, M’hudi was able to secure a listing at a local retailer with potential listings at more stores in the SADC countries.

Ramping it up

With the recently revised AgriBEE codes, a new momentum is required. Phil says the TU has already taken steps to improve capacity and sharpen its focus this year. For a start, it has earned the trust of agribusinesses that will invest their enterprise development spending in the TU, enabling further success. “Though we have seen some early successes in the programmes we run, there’s now a serious undertaking to improve our turnaround times and refining our communication processes,”
he says.

The TU’s results speak of a future that everyone can be proud of.

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