Wine Vision: Black consumers key to South Africa's potential

Opportunities for wine sales in South Africa will be limited until black consumers start to drink more wine, according to a panel of South African wine industry experts.

Speaking at Wine Vision, the London-based conference for the global wine industry, Tim Rands, MD of Vinimark Trading, said South Africa has “huge potential” if the country’s black population adopts a wine culture.

 “The challenge is to get black people to drink wine,” he said. “If you can penetrate that market you can have huge success – we would not produce enough wine domestically to satisfy the potential.

“The wine market in South Africa is still very small – [as a company] Hardys sells more than the total volume consumed by glass in South Africa. Consumption is seven litres per capita, beer is 63 litres per captia and there are 50 million litres of whisky imported each year. “

Carina Gous, business director of wine at Distell, said despite there being only 12 million wine drinkers among a population of 50 million, there is a positive trend among black middle income consumers is towards international brands. “We are seeing huge growth of brands of whisky, Champagne and cognac – people are drinking brands [not categories].”

Tim RandsAccording to Rands, there are indications too of a pathway to wine consumption among black people. “There has been some success with natural sweet wine –which is now 15% of the market. We think it’s the beginning of a wine drinking culture among black people in South Africa.”

But Rands said connecting with black consumers would not just involve a shift in drinking culture but expanding and sophisticating distribution chains and sales transactions, particularly in townships. “We are hamstrung by our inability to arrange distribution and payment. Even if you take your GPS into areas such as Soweto, you can easily get lost.

“In Soweto it is very hard. The tavern operators mostly work with cash.” We have to take an order, make the delivery, get paid and get out alive. Africa is not for sissies.”

Gous said with more understanding of the local business environment, countries such as Angola and Nigeria could also offer sales opportunities for wine companies. “We were one of the first sparkling wines to enter Angola and now we sell 500,000 cases of J.C. Le Roux there– which is more than we sell in South Africa.”Carina Gous

Distell’s wine business director warned, though, that infrastructural deficiencies have to be negotiated. ”Your ships can be lying in the harbour for a month, and it depends on the distributor whether you can keep the wine cool. In Angola and Nigeria retail is informal and wine is often sold in an open-air market.

“You have markets in Luanda [the capital of Angola] where you can buy freshly slaughtered monkey and a bottle of Moët [& Chandon]. I have seen a bottle of Pétrus selling in a shack – the wine could have been sitting there for three years.”

“When you see the garbage on the streets in Angola you think this could have been London 300 years ago but it’s a developing country and there is energy and vibrancy. People want to business and get things done.”

Rands added: “The risks of dealing in Africa are substantial but the opportunities in places like Nigeria and Southern Africa are huge. South Africa can be the seen as a gateway to Africa.”