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AT THE TIME OF WRITING, the wild fires in northern California had killed more than 40 people and destroyed some 3,500 buildings and homes, along with more than 68,800ha. Napa Valley Vintners’ association has reported that 47 of its member wineries have sustained direct damage. So it could be years before large tracts of Sonoma county and Napa valley are producing commercial quantities of grapes for winemaking.

Chile and Mexico have been rocked by earthquakes, the Caribbean blasted by hurricanes and Australia has had its fair share of wildfires.

So by comparison, South Africa has had it easy. Just a drought. Well, Rupert St Aubyn of Southern Wines, which represents Vondeling Wines from the Paardeberg region, tells Drinks International: “We are in the middle of the worst drought for about 20 years. It’s a shocker and it will affect production. But that is the same of almost all [wine-producing] countries. Prices are going to have to come up.”

Vinpro – a non-profit company which represents 2,500 South African wine producers, cellars and industry stakeholders – puts a more positive spin on South Africa’s predicament. The company liaises with government and industry on issues that have an impact on the profitability and sustainability of its members and the industry as a whole. It keeps members and the broader industry informed of trends and technical expertise and offers specialist services, ranging from soil science to viticulture, agricultural economics and transformation and development.

It says: “The Western Cape has received 30% less rainfall this winter than is considered to be needed and dam levels are currently at 35%, compared to 62% this time last year.

“Due to innovative production practices and a diversified geographic production area, the drought did not have a significant impact on the total volume of the 2017 harvest, except for a smaller harvest compared to long-term averages. It is too early to predict any impact on the 2018 harvest, though current conditions suggest it will also be smaller than average.

“The majority of our producers adhere to strict water management and many have already made adjustments towards more efficiency with new ideas to store, recycle and save water. The industry is working towards further technological developments and practices to save water and improve infrastructure,” Vinpro adds.

Chief executive of Wines of South Africa Siobhan Thompson says: “South Africa’s growers are facing drought, which is now moving into its third season, and low profit margins which do not allow for reinvestment in vineyards and people. A devalued currency also makes for challenges as brand building in overseas markets becomes more expensive.

“South Africa is now proving it can make world-class wines in a diverse range of styles and flavour profiles. The country has a varied terroir due to the climatic and geographical influences, with mountain ranges and two oceans creating a unique environment to make wine, stylistically somewhere between the Old and New Worlds,” says Thompson

Also on the positive, Liam Steevenson MW, chief executive of Global Wine Solutions, who was a multiple retailer buyer and is an international wine judge, educator and consultant, tells DI: “I think South Africa is the most exciting New World country. It is the land of the brave. The concept of ‘cellar share’, where people can make some wines and just rent some space, was invented in South Africa. It has gone from being the land of cooperatives, to vineyards owned by wealthy people, to a hipster, funky generation of winemakers. Good cooperatives have acres of space.”

Thompson adds: “There are many opportunities for South Africa in the major export markets and the younger generation of winemakers coming to the fore are innovating and building on the foundations laid by the older generation. Sales of our wines at premium prices are growing in established markets such as the UK and also in developing markets such as the US and China.

Distell is South Africa’s largest wine and spirits producer. General manager for premium wines Naas Erasmus says: “The greatest challenge for our industry is the financial sustainability of our growers. Grape and wine prices for the majority of what is produced in South Africa are simply too low. We have made major improvements in quality, now we need to convince markets that our wines are worth more. Our workers and growers deserve better.

“South Africa cannot yet hang its hat on a success story such as New Zealand Sauvignon Blanc, Argentinian Malbec, Australian Shiraz and Chardonnay and Chilean Cabernet. Our best opportunity probably sits in Chenin Blanc and Sauvignon Blanc,” adds Erasmus.

Wine Intelligence communications manager James Wainscott says: “Like a lot of wine-producing countries, SA wine imports have taken a hit in the short term but look pretty stable in the long-term. SA had a 7% decline in 2015-16 which can mostly be attributed to consumers going for Chilean, Kiwi and Argentinian wine instead

“South Africa performs largely in line with the other top markets at converting awareness into consumption. Tracking data shows a stable proportion of regular wine drinkers who drink wines from SA from 2013 to 2016.”

Oldenburg Vineyard is in the premium wine-producing region of Stellenbosch. Managing director Judi Dyer tells DI: “I think the perception of quality in South Africa has changed exponentially over the past 10-15 years.

“We have such diversity when it comes to terroir. The Western Cape has the ability to produce styles that can rival anywhere in the world. We do not have to specialise. We have all the climatic ranges – warm, cool, dry, hot –all sorts.

“South Africa has been growing vines and making wine for more than 300 years. It is older than certain areas of Bordeaux. So, winemaking is part of the country’s DNA,” says Dyer.

TOURISM

Bouchard Finlayson’s Peter Finlayson says: “Without side-tracking the super quality of SA wines I believe our delivery on wine tourism and the beauty of our wine lands have global star quality value. The real life experience of visiting the Cape is certainly first prize in making an impact.”

Thompson adds: “South Africa has some of the world’s best wine tourism offerings. Within easy reach of Cape Town, most are within two hours’ drive of the city hub. The South African wine lands offer visitors an all-round experience of exceptional food, wine, accommodation and entertainment.

“Wine tourism is a great opportunity for South African wines and there are plans in place to grow this sector. The offerings are a great drawcard to get people from around the globe to visit the wine lands once they have become ambassadors for the country. It’s cost effective, with a sound infrastructure that makes exploring the wineries easy and enjoyable.”

Oldenburg Vineyards’ proprietor, Adrian Vanderspuy, says: “We have recently refurbished our family home to create the luxurious ‘homestead’, offering visitors a chance to stay in the vineyards. Our tasting room offers a peaceful and tranquil environment in which to enjoy a glass of our award-winning wines.”

PLANTINGS

On the issue of varieties, Thompson says: “The Chenin Blanc grape affords South Africa an opportunity for growth, especially in the on-trade where its food-friendly style is well suited. As South Africa’s most planted variety and one in many older vineyards, there is the opportunity for the country to take ownership of this variety. South Africa is proving capable of producing high-quality Chenin Blanc from several regions.

“There is a clear movement towards planting lighter-style varieties such as Pinot Noir, Grenache and Cinsault, and also varieties that are well suited to a warmer climate. South Africa’s Méthode Cap Classique wines are increasing in popularity too and these will be showcased at Cape Wine 2018, our international wine showcase.”

“Chenin Blanc is South Africa’s most widely planted variety and its versatile profile is proving popular with many consumers around the world,” says Thompson.

Vanderspuy says: “Our key plantings at Oldenburg are Chenin Blanc, Chardonnay, Merlot, Syrah, Cabernet Franc and a Cabernet Sauvignon and we have seen great success with these. We also plant a few other varieties, such as Viognier and Grenache Noir, which are becoming increasingly popular.”

Finlayson adds: “I fully endorse the fact that Chenin Blanc, Pinotage, Shiraz and Sauvignon Blanc are winners. There are certainly marvellous Chardonnays emerging from Hemel-en-Aarde and Elgin – as good as any. The local bubblies are also worth trumpeting about. Cabernet Franc is a further one to watch.”

He continues: “With the realisation of global warming, cooler wine regions such as Walker Bay with its Hemel-en-Aarde wards are certainly making their mark. Elgin is also strong in quality white wines.”

Distell’s Erasmus says: “The key trend at the top end is, without doubt, wines made from old vines. We see a lot of good Chenin Blanc-based blends being produced and the consumer is reacting positively to this. In terms of plantings there is a trend towards white varieties in the higher production regions, while Cabernet and Chardonnay are favoured in some of the premium-growing regions.

“In North America soft reds remain popular and there is a definite awareness of Chenin Blanc developing.

“South Africa is still a major supplier of quality entry-level wine in the UK, Germany and the Netherlands and prices unfortunately remain under pressure. In Sweden there is a lot of focus on ethically certified wines – Fairtrade, Fair for Life and the Wine Industry Ethical Trade Association.

“Our white wines offer probably the best value for money and that at most price levels. Our commercial Sauvignon Blancs have improved tremendously over the past 10 years and the recognition that Chenin is receiving on the world stage is worth noting.

“Pinotage is still carrying some of the baggage of the ’90s but huge progress has been made and we are turning out world-class wine. Top-end Pinotage is selling really well on the international markets, so consumers are embracing it,” says Erasmus.

SUMMARY

Wine Intelligence’s Wainscott says: “Volumes of SA wine in the UK are down but this may not necessarily be a bad thing. There has been a concerted effort across the SA trade to premiumise its offering and avoid a race to the bottom with cheap bulk wine, so naturally volumes will decline.

“Part of the industry’s effort has gone into defining sub-regions and identifying terroir. With region awareness/reach so low for a behemoth such as Stellenbosch, producers should recognise that most consumers are motivated by variety over country of origin, while the specific region of origin is only considered important or very important by 60% of regular wine drinkers in the UK.

“South Africa also faces challenges from Chile, Argentina and Australia, which are all around about the same point of development. They are all mostly brand and variety-led, most started out by flooding the market with good quality cheap table wine and are now trying to establish a more premium identity with more regionality.

“There are great success stories such as Penfolds, Montes and Cheval des Andes, but I think Chocolate Block (Boekenhoutskloof, Franschhoek) is the strongest showing in the UK and it doesn’t command anywhere near the same prices.

“With these three countries taking a very similar marketing approach (tourism, experiential wine tastings, food matching, premiumisation, regionality), South Africa is operating in a very crowded space,” Wainscott concludes. Oldenburg Vineyards’ Vanderspuy counters: “South Africa is staking its rightful claim as a producer of top-notch wines that can compete on any stage.

“With this momentum and continued drive from so many within the South African industry to produce only the very best, it will remain a hard-fought battle but I am positive that the future is bright.”

Vanderspuy adds an addendum: “An increase in funding from outside of the industry to support a wider ‘brand South Africa’ marketing campaign would help to put SA on a more even footing with other wine-producing countries.

“Opportunities lie in increased awareness for the quality South Africa has to offer and the popularity of tourism to the Cape and the high-class wine tourism offering from many of the SA wine producers,” says Vanderspuy.

EXPORT MARKETS

UK

GERMANY

NETHERLANDS

SWEDEN

US

CANADA

CHINA