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Why cheap and cheerful is not entirely a bad thing

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Fairview Goats do Roam 2018
Fairview Goats do Roam 2018 – yours for R50 a bottle.

Does our new programme of Best Value Tastings (see here) aimed at identifying the best wines selling for between R60 and R100 a bottle reinforce expectations that South Africa is predominantly a source of cheap ‘n cheerful wine (or, even worse, cheap ‘n nasty wine)?

The industry has some major problems, most of which stem from history and official interference rather than terroir or fundamental growing conditions – the KWV for a long time didn’t exactly facilitate the most business-like mindset among growers and then the institutional vacuum brought about by its repurposing has created massive structural instability. As a result, far too much of production is focused on bulk.

Moreover, leaf-roll virus remains endemic and a major constraint on quality while producers are inclined to factor a weak rand into their pricing and returns – this keeps profits up in the short term but through currency devaluation not quality gains combined with the resultant shift in price that this would bring about.

Growers face a situation of more money going out than coming in and the mantra becomes that wine prices must rise. Blissfully wishing away the bottom end of the market is not realistic, however. Rational consumer behavior is to acquire the best quality for the least amount of expenditure and South African producers should embrace this.

For the South Africa wine industry to survive it must undertake a two-fold process: 1). reduce in volume the lower 60% of its business (this already underway given the decline in the national vineyard over the last decade) and 2). ameliorate what it does produce – presuming that markets are more or less efficient, the reason producers don’t get more money is because buyers don’t value it sufficiently. Producers need to move from bulk to large brands which sell initially in the affordable market segments and then as more margin is achieved, the necessary cash will become available to finance the establishment of new markets.

Next, I would contend that the vast majority of international consumers don’t view South African wine as cheap ‘n cheerful but rather have no conception of it all.  

Some might argue that what therefore needs to be done is to this persuade sophisticated consumers that South Africa’s top wines are worth the kind of money many are willing to shell out for the best of France, Italy and Spain and that they way to do this is by raising the profile of site – Cabernet Sauvignon wedded not just to Stellenbosch, but to the Simonsberg, and not just to the Simonsberg but to Kanonkop, for instance, and of course this can do no harm – it will in a small and very gradual way will win over the elite.

In a similar vein, many will point to the stir that the New Wave headed up by Eben Sadie and co. has caused among international wine geeks and their achievements are not to be overlooked. However, relying a small band of independents to sway the opinion of the vast majority of international consumers is frankly ludicrous. These avant-garde producers, along with the better run estates and private cellars, are probably commercially secure, the issue of land tenure notwithstanding, but what we also desperately need is a strongly branded wine businesses operating at the entry level and middle tiers of the global market.

To the extent that the industry has succeeded in the modern era, this has been due to a combination of mid-sized brands and personality-driven initiatives (Bruce Jack of Flagstone and later Kumala as well as Charles Back of Fairview and Spice Route both come to mind) and these surely show the way. Brands bring margins and margins equate to marketing budgets and only then can the story of South Africa wine be properly told.

14 COMMENTS

  1. I believe that our young wine buyers are supporters of this market. They buy a good looking label at a reasonable price (under R100) and if it tastes good, they will return and also tell their friends.
    Any winery that ignores, or tries to sell plonk in this range will be missing the bus.
    These buyers will be the premium wine buyers of the future, treat them with honesty and respect.

    Please don’t ever stop the ‘Best Value Wine Guide’
    It’s worth it’s weight in gold.
    My every day wine comes from this………….I have a personal interest!!!

    • Absolutely correct. Price is a major factor in this country with a basically zero growth economy. We are not all rich or poor but reality is a budget within limits

  2. Perhaps what certain Winemag readers would like more of in this regard are the editor’s personal recommendations at under R100pb. Already, Winemag’s panel of three judges regularly comes across wines below this price threshold that qualify as particularly good value, given that they receive good reviews in the company of higher-priced wines. Just some examples from Winemag tastings in 2018: Durbanville Hills Chardonnay, Org de Rac Roussanne, Koelenbosch Sangiovese, Villiera Down to Earth Touriga Nacional Shiraz – all under R80pb and scored 90/100 or higher.

  3. I think that’s a slight concern regarding the “value” tastings, Mike. The wines you mentioned did well amongst a variety of wines, including very good (and expensive) ones. I’m worried that the value tastings will not bring too many high scorers because panellists will be in the “value” frame of mind (let’s say roughly the 82 – 90 points bracket). The best blind tastings are the ones where you can get ANY wine. If you know the wines you taste blind are all going to be below R100 a bottle, you are not going to score anything 96. That’s just how it is. At least the wines will be ranked comparatively, which should be useful.

    Hopefully they will include a few ringers (wines that the same judges have scored highly or raved about in the media) for some sort of calibration and hopefully they will not judge too many wines on a day, which always makes the results a bit more random. I’m looking forward to discovering some good value gems!

  4. Sadly I often see only the cheap and cheerful wines on the shelves during my frequent global travels with only a few fine purveyors offering wine at the other end of the price and quality spectrum. Philip PS anyone have any Kanonkop Paul Sauer for sale? That aside, I share Rolf’s opinion and personal interest and cannot find a better value for money wine than the Alvi’s Drift Chenin Blanc!

  5. I agree with Kwispedoor that “value” tastings may have the unintended consequence of great quality and value wines being scored below 90 simply because of the category. A true reflection, i believe, of wine quality and value can only be established when tasting is conducted blindly across all price points. Who can forget how the excellent but rather cheap (then @R72 p/b) Buitenverwachting Meifort 2014 upstaged its more illustrious “bordeaux blend” rivals to win the Old Mutual Riedel Trophy two years ago?

    To Rolff’s point, the young wine buyers market is only in its infancy in SA. Producers need to be strategic and creative in how they curate the messaging to this aspirant market segment. I think the marketing message to this segment should be linked to provenance, craftsmanship and lifestyle. Whisky and more recently Gin has done this successfully with this market.

    • Hi Jabulani, The problem is that producers are generally not inclined to enter wines selling for sub-R100 into “open” category tastings for fear, I suppose, of being outgunned. As for your point regarding the success of whisky and gin, I agree in broad terms but would also point out that a 750ml bottle of Inverroche Classic Gin costing R385 a bottle gives you 30 25ml servings while a 750ml bottle of wine at the same price gives you only five 150ml servings…

      • Hi Christian, i find it intriguing that producers would be less inclined to enter wines selling below R100 in open category tastings. On balance, a outgunned sub R100 wine is of no great loss but the opposite will most certainly enhance the valuation of the said wine.

        Fair point on the Whisky and Gin argument, but price is not always a deciding factor in a choice between drinking wine or whisky/gin.

  6. An interesting comparison between whisky and wine. In the UK a 10/12 year old malt whisky will cost between £20/£30 and a 15/16 year old about £45 – there are of course some exceptions. A cheap SA wine bought in a supermarket will be about £5/£10. Many are over-priced for what they are (I know their SA prices). A better quality 4 star SA red wine will cost between £12/£16 and a 5 star keeper about £30+. I do think there are some great whisky bargains out there just now with production fuelled by growing demand for malts – which until recently have been a very small fraction of total whisky sales – most sold being blended, cheaper grain full whiskies. This growth in demand has led to the production and sale of numerous non age statement (NAS) whiskies which are sold on the basis of the type of barrel they were matured in – various wine varietals etc. Not a good long term move in my opinion.

    I drink whisky generally as an aperitif, with wine either with or without food – and the latter certainly gives me more pleasure. Quality/pleasure consistency with malt whisky across all price and brand ranges is high but with wine there is a wide variance and herein lies the problem. There is just too much low priced and low quality SA wine in overseas markets. There is plenty good in the £12+ range if you search for it but consumers will buy the lower priced bulk produced wine in the supermarkets and probably end up disappointed.

    I would certainly like to see more reviews of wine at the say R150 and below price range and certainly more ‘ringers’ in blind tasting competitions. I agree that if the tasters know the price range they will likely sub-consciously mark lower.

  7. Hi everyone,

    I love a bargain and when I find a decent wine that is selling for R100 or less, I have to tell someone about it. So I started the Wine Hundred Bucks Instagram page. It’s an illustrated guide and every month I select 6 different wines to showcase. No tasting notes, simply wines that I enjoy and would recommend.

    Please check it out.

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