Michael Fridjhon: SA – two wine industries and very little media

February 22, 2017
by Michael Fridjhon
in Opinion & Analysis
with 6 Comments

It seems that there are at least two South African wine industries, and implicit in this dichotomy lie the seeds which might lead to the destruction of both of them.

On the one hand we have what used to be the portion of the industry which thrived under the protection of the KWV, and now survives courtesy of largely uneconomical bulk exports, alcopops and entry-level beverages such as Fourth Street.

What future wine media?

What future wine media?

On the other hand we have the fine wine industry whose existence serves as a magnet for tourism to the Western Cape. However, within this latter segment there is also a dramatic split: somewhere between 80% and 90% of its volumes are of no interest to readers of Winemag.co.za. Put another way, consumers of craft wines (whether from newly launched artisanal cellars, or special bottlings destined for the CWG auction) wouldn’t be seen dead with a bottle of Nederburg or Bellingham in front of them.

While some might dispute these percentages, a difference of even 20% in the numbers won’t change the outcome. South Africa produces just under 1.2 billion litres of wine annually. Roughly a quarter is taken up by spirits production and juice for concentrate, leaving around 900m litres sold as wine, half as exports, half within the domestic market. Some 70% of what is sold locally is essentially commodity wine – in other words, bag-in-the-box, tetrapak, wines packaged in plastic and returnable glass etc.

Of the remaining 30%, almost all is what might be described as premium branded wine: Nederburg, Bellingham, Spier, but also established and commercially successful former estate brands like Villiera, Backsberg, Fairview and new generation supermarket lines like Porcupine Ridge and The Wolftrap.

The total volume of wines which are of interest to the readers of this publication represent no more than a few hundred thousand cases 9-litre cases – certainly less than 2% of South Africa’s vineyard production. Most sell on allocation: there’s not a lot of Alheit, Sadie, Thorne & Daughters or Newton Johnson wine gathering dust on bottle store shelves. Even the bigger volume, longer established super-premiums (Hamilton Russell, Kanonkop, Rustenberg) which are visible in local distribution are not battling to find customers: supply and demand is pretty well balanced.

Once you understand the South African wine industry in these terms a great deal is explained. Firstly, the major producers don’t care about Winemag – the online publication today, or any of its previous incarnations. They don’t care about the opinions of wine geeks, whose obsession with the whatever is new, unusual or fashionable necessarily makes them a moving target when it comes to any form of communication. Most ultra-premium producers also don’t see the value in investing in communication to this segment, partly for the same reasons, but also because they suspect that geeky consumers have an inherent aversion to paying for brand premium. Part of the appeal of being at the so-called cutting edge is that you can buy the work of art before the artist has acquired a reputation which will necessarily inflate the price of his work.

So if you want to know why Winemag, Classic Wine, or the old hard copy Wine Magazine don’t or won’t survive, it is because they offer nothing of value to the advertiser. The readers aren’t interested in the product. They’re also not interested in paying for content. For most of its existence Wine Magazine had fewer than 10 000 subscribers, many of whom were beneficiaries of corporate subscriptions which, when they ran out, were not renewed. This may seem bizarre: we have a domestic wine industry which is growing in number of consumers and in volumes traded, which sees at least 20 000 copies of the Platter Guide sold each year (much down from the 50 000 sales 20 years ago, but still an impressive number), which sees 10 000 visitors to WineX every year – and yet we cannot sustain a single premium consumer wine publication.

This very pattern has further consequences: the producers who do have marketing funds spend them elsewhere, and from their perspective, more efficiently. Instead of supporting ephemeral wine publications whose readers obsess about the esoteric fringe spaces of the production sector, they buy gondola ends in supermarkets and they bribe their way onto restaurant wine lists. (They would describe the process as buying the on-consumption equivalent of shelf space, and would argue that the whole process is above board. Without getting into this side-track, I would like them to publish details of what they spend – and with whom – for these listings, just as I would like the restaurants to make disclosure of how much they extract from the trade. Like everything else in the South African political economy, if properly exposed, the paymasters and the beneficiaries of these transactions would be embarrassed, but would defend their actions as “the only way to do business here” – see more here.) In any event, insofar as their not buying above-the-line advertising is concerned, it’s hard to dispute a position which says that as long as wine drinkers can’t be bothered to support the publications which communicate with them, why should advertisers invest in them?

But all these processes have consequences – and they fulfil the direst predictions made about them. We have a corrupt government because we don’t kick out corrupt politicians, but also because, confronted by a cop at a road block we would pay a bribe to avoid being breathalysed, and we would happily pay something “extra” to an official at Home Affairs to fast-track the processing of a new passport and to avoid standing in a long queue for it. We want free editorial so we don’t spend money on a wine press. We are complicit in the polarisation of our wine industry because we don’t do the right thing. If you want better from life, for yourself or for your children – don’t make it someone else’s problem to cause a riot in parliament.

  • Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is founder of Winewizard.co.za and holds various positions including: Visiting Professor of Wine Business at the University of Cape Town; founder and director of WineX – the largest consumer wine show in the Southern Hemisphere and chairman of The Old Mutual Trophy Wine Show.

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6 Comments

  1. BettieMarch 15, 2017 at 9:10 amReply

    I know reading on the computer is the in thing, but I loved the magazine. The feel and smell and I could carry it everywhere and re-read it over and over again. I still have my old magazines for that purpose.

    • ChristianMarch 15, 2017 at 9:15 amReply

      Hi Bettie, We miss the magazine, too, but going digital removes two major business costs, these being paper and printing.

  2. Izak SmitMarch 14, 2017 at 1:50 pmReply

    Don’t miss the point here. I agree 100% with Michael. That is the reason why SAWi was established in 2009 with the specific mission to highlight high-end wines (versus WOSA’s main emphasis on ‘commodity categories’) in a completely new and unique way. It took 7 years to compile a multi-year performance base in the form of an unparalleled index system [i.e. only recognizing performance outcomes of wines with scores above 90 points, within a firm 5 point competition status weight criteria]. As a result, in 2016 SAWi has brought out the first SA cultivar ranking list in terms of its ‘Grand Wines Collection’ (GWC) – 400 wines out of 8000+, making the benchmark of 93/100. In fact a second update will be released in April, with a follow up publication and promotions campaign also on hand for specific market segment aims. For that the SAWi website is currently also undergoing changes.

  3. StevePFebruary 23, 2017 at 2:44 pmReply

    Interesting article. This is the first year in a decade that I didn’t bother with the Platter guide. It seems all rated wines are 3 – 5 stars, with 5 star wines immediately shooting up in price (and still selling well, so there’s your market) while 3-star are not really as good as the supermarket regulars.

    I think I have also grown more comfortable with my tastes, so I now know the wineries that are likely to produce what I like to consume. To be honest, the “new wave” wines don’t really do much for me, and I don’t find them good value.

    What I d notice about newer producers is that their wines in general do not keep very well

    • KwispedoorFebruary 23, 2017 at 3:32 pmReply

      Hi, Steve. I’m interested in what exactly it is you collectively call “new wave” wines. If I look at relatively young labels of modern wines, I would agree that they are generally not exactly cheap in the SA context (although they might be a steal in the international context), but to my mind they represent huge stylistic differences. For instance, compare the Pinotage from David & Nadia with that of Beeslaar or the Syrah from Trizanne with that of Intellego or the Pinot from Johan Meyer with that of Crystallum. There is a lot of different wine styles between all the new wave wines and to dismiss them as a group would just seem a bit odd to me.

      And is saying that new producers’ wines generally don’t keep well not a bit of a contradiction in terms? Surely there has not been enough time to properly mature most of them? Or are you saying that they literally fall apart after just a short couple of years? I find that true of some radically naturally made wines that were not very stable to begin with, but I haven’t had any other notable disappointments with so-called new-wave wines that were just a couple of years old. As for slightly older ones, I had a 2010 Sequillo White the other day and it kicked butt.

      Of course I wouldn’t dispute differences in taste – I’m just trying to better understand your point of view on this.

  4. ChristianFebruary 22, 2017 at 3:20 pmReply

    Mr Fridjhon’s argument is well made but it bears mentioning that Winemag.co.za users have grown from approximately 7 000 when we relaunched in October 2014 to a current monthly average of 15 000, 30% of this being international. We believe SA fine wine deserves a dedicated publication and are exploring every possible means of staying in business!

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Wine magazine was published from October 1993 until September 2011 & now lives on in digital form as Winemag.co.za. We cover everything to do with SA fine wine.

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