Greg Sherwood MW: Can SA’s fine wine progress continue in tougher times?

South Africa’s wine finds itself in a curious position at the moment as its exports to the UK, its single largest market, keep earning more money while shipping less liquid. So, after a long chat over the phone this week to a famous Stellenbosch producer, I thought it would be interesting to drill down on this subject a little further, ahead of my upcoming trip to the Cape, as I am sure to be asked to offer further commentary on this topic.

Recent industry figures show that in 2025 the UK still accounted for roughly a fifth of South Africa’s total export value even as shipped volumes fell by around 6% to 7% year on year. Industry body Wines of South Africa (WOSA) has openly framed this shift as a deliberate strategy, to prioritise value over volume and retreat somewhat from the bargain-bin battlefield of bulk wine, preferring to fight for space on the fine wine shelves and listings in on-trade wine lists.

The question this raises is bigger than the trade statistics themselves. As European wine consumption contracts and the ageing cohort of serious collectors reportedly drift back towards Bordeaux, Burgundy, Piedmont and the Rhône, can South Africa’s premium category really establish itself as a peer to the old world’s classics, or is it destined to remain a well-regarded but secondary player in the fine wine market?

The backdrop: falling consumption, rising premiumisation

Certainly, looking around the UK market, the broader context is unforgiving. UK wine consumption supposedly peaked back in 2009, and has been sliding ever since, with overall alcohol volumes continuing to soften even as total market value edges up on premiumisation.

Younger drinkers are not replacing the older ones at anything like the same rate, with mindful drinking habits continuing to spread and ready-to-drink cocktails and No/Lo alcohol alternatives eating into wine’s share of the drinks trolley. Even wider afield in France, wine’s spiritual fine wine home, its market it not immune, with recent data showing still wine volumes falling there too, with the red wine category hardest hit.

In other words, South African is not competing in a growing market against entrenched incumbents, it is competing for a larger slice of a market that is itself getting smaller for almost everyone. Paradoxically, that shared pain is possibly part of what makes South Africa’s positioning more coherent.

If the market for cheap, everyday wine is contracting fastest as we are told, and if the surviving demand is concentrating in the premium and super premium tiers, then a producing country’s fortunes depend less on how many bottles it can push and more on whether its top wines are credible at the dinner table alongside a Claret, or a Chianti Classico. South Africa’s export strategy of smaller volumes at better price points is essentially a bet that its reputation for quality can carry it into that shrinking but higher-value space.

The case for a positive outlook

There is of course real substance behind those betting South Africa can and will compete. Regions like Stellenbosch, Swartland, Hemel-en-Aarde and Elgin have spent almost two decades building a track record with the critics and sommeliers, and South African Chenin Blanc, Cape Bordeaux Blends and cool-climate Syrah from various regions increasingly turn up on serious wine lists rather than as house pours.

According to recent export stats, bulk wine pricing has also actually been improving even as volumes fall, which suggests underlying quality is being rewarded rather than the country simply exporting less of the same commodity juice. South Africa also benefits from a currency that keeps its top wine competitively priced relative to Burgundy or Napa Valley equivalents of similar quality. This “quality per pound” argument definitely resonates with UK consumers who are increasingly becoming more price conscious than a decade ago, even at the premium fine wine end.

There is also a strong demographic argument emerging in South Africa’s favour, not just against it. The classic ageing UK collector base that I’ve worked amongst for several decades and that I often refer to in my articles, which is reported gravitating back to blue-chip Bordeaux and Burgundy, is by definition, a shrinking and eventually non-renewing customer group.

Meanwhile, the wine trade press has been fairly consistent in describing younger UK drinkers as wanting “stories in the glass” but also provenance, authenticity and a sense of discovery, rather than simply defaulting to whatever their parents drank. That is fertile ground for a New World country like South Africa, with a genuinely interesting story, post-apartheid transformation, old vine heritage, bio-diversity conscious regenerative viticulture in the Cape’s fynbos kingdom, and a first-generation of independent smallholder producers.

None of these factors guarantee sales of course, but it is a ‘narrative asset’ that the classic regions cannot easily replicate, precisely because their story is much more grounded in continuity rather than change.

The case to consider against South African wine

But as any producer will tell you, marketing, a well-established narrative and a value-for-money proposition only go so far against the centuries of institutional prestige hotwired into regions like Bordeaux and Burgundy. Fine wine, as an asset class as much as a beverage, trades heavily on scarcity, provenance chains, and also secondary market liquidity, the very things Bordeaux first growths and Grand Cru Burgundy have spent generations entrenching through classifications, negociant systems and an active auction and investment market.

Fine wine trading indices such as Liv-ex, tracking Bordeaux first growths have remained comparatively resilient even in a soft market, while wealthy buyers keep chasing rare, sought-after bottlings and Chinese and wider Asian demand shows tentative signs of returning for established names.

South African wines, however excellent, largely sit outside this investment ecosystem, with a few exceptions. A wine buyer nearing retirement age, reallocating a fine wine portfolio back towards “safe” classical names, is not really choosing between Stellenbosch Cabernet and a Pauillac Bordeaux Cru Classé based on taste alone, they are often buying reputational security, resale confidence and status signalling that many South African wines still simply do not have sufficiently.

There is also a structural fragility at home in South Africa, with a shrinking vineyard area, smaller harvests, and a domestic market under real economic pressure, helping to limit South Africa’s ability to consistently supply enough top-tier wine to seed that long-term prestige-building process – something, industry leaders like Mike Ratcliffe, have been opining about for years now.

Old world regions can lean on centuries of stock, library vintages and a self-reinforcing culture of collecting, while South Africa is still, relatively speaking, building up that new, post-apartheid era fine wine archive one vintage at a time.

A challenging global market but signs for optimism

As is normally the case in economic discussions like this, the honest answer is perhaps a little more nuanced than many commentators in Europe tend to let on – that South Africa’s premium wine category can compete but perhaps in a more specific and limited sense. It can absolutely win on the merits at the dinner table, in blind tastings (as I know all too well), and increasingly among sommeliers and adventurous drinkers who value quality and a story over simple ‘brand security.’

What it cannot yet do, at least not within a single generational cycle, is displace the old-world classics as the default choice of the risk-averse collector guarding their capital in a difficult economy.

As the market shrinks, South Africa’s realistic path to growth is not head-to-head combat with Bordeaux and Burgundy for the same conservative buyers, but capturing the more curious, value-conscious, and younger segment of a fine wine market that the classics are still, for the most part, too expensive by default.

South Africa’s premium producers simply need to become more proficient at operating in, and marketing to, these fine margins of the consumer fine wine category. Therein lies future long-term success.

• Greg Sherwood was born in Pretoria, South Africa, and as the son of a career diplomat, spent his first 21 years traveling the globe with his parents. With a Business Management and Marketing degree from Webster University, St. Louis, Missouri, USA, Sherwood began his working career as a commodity trader. In 2000, he decided to make more of a long-held interest in wine taking a position at Handford Wines in South Kensington, London, working his way up to the position of Senior Wine Buyer over 22 years. Sherwood currently consults to a number of top fine wine merchants in London while always keeping one eye firmly on the South African wine industry. He qualified as the 303rd Master of Wine in 2007.