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IN THE LAST DECADE South African brandies have been the most awarded brandies in the world. They dominate the biggest blind tasting competitions with almost embarrassing regularity, yet the category struggles where it arguably matters most – in the minds and wallets of consumers.

“The international recognition that comes from winning global awards is incredibly powerful and cannot be underestimated,” says Christelle Reade-Jahn, SA Brandy Foundation director. “When you realise that we compete against thousands of other products from around the globe, the wins are seriously impressive.”

But impressive results in blind tastings doesn’t necessarily equate to sales. “I believe more should be done to promote these stellar performances,” Dr Winifred Bowman, a globally recognised voice on SA brandy, says. “Whenever I share this information at presentations, the inevitable question is: ‘Why don’t we know about this?’”

IMAGE PROBLEM

In the past, the brandy category has suffered from something of an image problem. Cocktails are changing this but it’s gradual and isn’t universal.

“Brandy is still seen as a gentleman’s drink,” Bowman says. “It’s associated with after dinner, smoking a cigar and talking politics of the day.”

Liezl Dippenaar, global marketing manager for Van Ryn’s, says a lack of innovation hasn’t helped SA brandy’s street cred. “In recent years South African brandy unfortunately has had a slow rate of innovation, which will hopefully change in the near future,” she says. “I am of the belief that we are seeing this changing and I’m very positive about the short to mid-term future for SA brandy,” she adds.

Another challenge for the category is the lack of internationally recognised brands. “Millennials often will choose a globally recognised brand name when ordering in a bar,” Reade-Jahn says. Price is also a factor, she adds. South African brandy is expensive to produce due to the high production requirements.

“Our potstill brandies are matured a minimum of three years in French oak barrels of no more than 340 litres,” she says. “A major challenge for us is the influx of large international brands and their global marketing budgets.”

MARKETS

When it comes to local consumption, for many years the brandy category reigned supreme and had very little competition from international brands and spirits. “This changed when powerful international brands entered the market on their own steam with big promotional budgets and aspirational appeal,” KWV marketing executive, Nuno Fernandes says. “The brandy category lacked the status cues of categories such as whisky and, these days, cognac and vodka.”

A lack of innovation, education and consumer relevance left the category with a domestic image crisis as well as an international one, Fernandes says.

“The South African brandy drinker has been lured away by international brands and other trendy categories,” Dippenaar adds.

But all is not lost. According to a SA Brandy Foundation report, brandy regained market share from SA whisky during the latter part of 2015. It said: “The spirits market has been turned on its head. For the past few years whisky was the star performer and taking volumes from the brandy market. This changed in 2014/2015 with whisky losing volumes and brandy volumes stabilising.”

Two significant company moves took place in South Africa in 2015 –the SAB/Anheuser-Busch merger and Brandhouse being split into two separate entities. The three beers – Windhoek, Amstel and Heineken – under Heineken and the spirit products under the name of the parent company, Diageo.

The report says whisky was the only category to gain volumes in 2014, with brandy volumes down by 5% and the other categories flat. This changed during 2015 with brandy up 1% and whisky down by 7%. It says: “Distell took a brave decision in February 2015 not increasing the prices of three brandy products, namely Klipdrift Export, Commando and Viceroy. All these products are popular in the mainstream market and good growth on Commando and Viceroy is the reason that the brandy market volumes stabilised.”

Reade-Jahn says the change in fortunes was down to a concerted effort from all the SA brands. “It has started to impact on sales. The marketing focus on premiumisation and fresh messaging from the bigger brands is starting to impact the consumer choice.”

Bowman adds: “It was all down to aggressive marketing. I was personally involved in several tastings and

presentations showing that brandy can be as trendy as many other drinks.

We use the blended brandies in cocktails and even celebrated Brandy Alexander day – something I did not know even existed.”

Focusing on the younger consumer is key to this, she says: “We are moving into the younger market who are enjoying the younger, fruitier brandies as an aperitif, right up the more mature, heavier brandies for after dinner.”

By way of comparison, the report looks at the retail prices of products popular in the mainstream spirits market. It says: “Products such as Johnnie Walker Black and Jack Daniels have become very expensive. The price of a premium vodka such as Skyy equals the price of Johnnie Walker Red. With the rand/dollar and rand/pound exchange rate at the current rate these products will get even more expensive, resulting in the growth of the more affordable products such as Viceroy, Commando, Gordon’s, Old Buck and Smirnoff.”

VALUE

Domestically and globally, Van Ryn’s Dippenaar says it’s all about value for her company’s consumers. “The growth [in South Africa] was through a small selection of brands which have successfully shown the consumer a reason to believe in those brands.”

“Viceroy and Klipdrift particularly had a good year but what’s most exciting to see is luxury brands such as Van Ryn’s showing some decent growth”, Dippenaar says. “I believe the way the category is marketed will change the face of brandy in the near future and substantial growth will come in the long term.”

The quality is undeniable – just look at the awards cabinet – and that will be South African brandy’s USP.

“Our exceptionally high production standards have resulted in consistent quality from not only our larger producers but also our boutique smaller producers,” Reade-Jahn says.

“SA brandy has exceptionally high quality driven potentially by the strictest standards in the world,” KWV’s Fernandes adds. “Unlike cognac that only requires two years of maturation, South African brandy is matured in 340-litre oak barrels for a minimum of three years. While this has helped drive the quality of South African brandy it has made it challenging to compete at the entry or prop price point against other brandy-producing nations that have less stringent legal requirements, like Spain and France.

“On a small scale, our premium (pot still) brandies are starting to make inroads internationally. South African brandies have always fared exceptionally well at the big international spirits competitions and the quality affirmation is starting to pay off. Even when it comes to cognac or armagnac, we have beaten the best.”

UNKNOWN

If Reade-Jahn could communicate one thing about SA brandy, she says it would be that it is made from the best quality base wine and it take five litres of top quality wine to make one litre of SA brandy.

Van Ryn’s Dippenaar is optimistic change is coming and progress has been made. “A lot has been done to educate the public, but there is always more to do. Now that the word is spreading it’s about finding ways to convert them to usual drinkers. It’s great to see the response of people who engage with our brands or our distilleries. It’s very positive to see the sentiment.”

FUTURE

In terms of the future, Reade-Jahn says it looks very bright for SA brandy. “We have embarked on an exciting strategic repositioning platform to reach a bigger audience with our excellent products and to take the message out there: SA brandy is the world’s best and the epitome of the brandy masters art.”

Van Ryn’s Dippenaar is equally encouraged. She says: “With the way things are going I do believe we are set for some substantial growth over the next few years.”

Bowman concurs. “With more international markets open to SA, we are slowly but surely making ourselves known. In fact, I am presenting a SA brandy and cognac lunch at the Michelin-starred The Harrow at Little Bedwyn in the UK in April.

“This is after chef and owner Roger Jones explored South African brandies with me here in Cape Town. He was blown away by the quality and different styles. And, of course, at many times a fraction of the cost of traditional cognac.”

With tasting competitions just around the corner and a slew of awards to collect, the South African brandy category needs to shout its success from the rooftops and monopolise on the genuine quality cues it has at its disposal.

It has an enviable arsenal to tap into the current climate that demands authenticity and quality as people drink less and better. If lesser liquids can do it, then South African brandy shouldn’t shy away from the fight.