Coronavirus and SA wine: Boela Gerber of Groot Constantia
By Christian Eedes, 21 May 2020
The current conversation around Coronavirus and its effect on the South African wine industry is perhaps inevitably very emotionally charged.
We put the same set of questions to a variety of industry stakeholders with a view to obtaining a better understanding of what’s happening on the ground and also plotting a way forward. Here is how Groot Constantia winemaker Boela Gerber and CEO Jean Naudé replied:
How badly has Coronavirus crisis impacted your business?
BG: We export about 50% and sell the balance off the farm. The whole world is in recession, so even though exports are allowed, the exports are a bit slower. The majority of the domestic sales are generated off the farm. We rely heavily on tourism, including international tourists, so worldwide travel bans are not good for our business. It is impossible to quantify the full effect, as we currently do not know how and when we will get out of the crisis.
How many wineries do you foresee closing as a result of the pandemic?
BG: It is again difficult to predict. Many wine farms were still battling financially after the recent drought. The lock down comes at a bad time. Industry experts predict that as much as 80 wine farms can go bankrupt in the next three months, with 8 000 farm workers losing their jobs.
JN: It is scary to think of what the net effect of this could be to the economy of towns like Worcester and Robertson for example and the socio-economic spinoff to the neighbouring regions.
What plans do you have in place to get going again once restrictions are eased?
JN: We will proceed with expanding our offering in such a way that we become less dependent on wine products or tourism-related clients, without spoiling brand identity or the ambiance of the estate.
How will doing business be different?
JN: People are creatures of habit and we will return to a state of “normality” but the crisis has definitely sped up the move towards internet sales, less travel, internet-based meetings, working from home and so. Businesses will also have to speed up their movement to accommodate these trends.
What will the South African wine landscape look like after the pandemic?
JN: There will be changes in terms of ownership and the wine industry will lose land to other agricultural industries (less volume will be produced in future). The longer the lock down (with the restriction of alcohol sales) the more intense this result will be.
Will the industry recover quickly or will it be changed forever?
JN: The wine industry consists of capital-intensive and long-term businesses. We will definitely see less of them in future but the remaining ones will not change much without capital investment being pumped in from other resources.
Read other interviews:
Chris Alheit of Alheit Vineyards
Tertius Boshoff of Stellenrust
Gerard Holden of Holden Manz
Johan Kruger of Kruger Family Wines
Bruwer Raats of Raats Family Wines
Mike Ratcliffe of Vilafonté
Johan Reyneke of Reyneke Wines
David Sadie of David & Nadia
Eben Sadie of Sadie Family Wines
Lukas van Loggerenberg of Van Loggerenberg Wines
Michael White of Highlands Road