Coronavirus and SA wine: David Sadie of David & Nadia
By Christian Eedes, 15 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 David Sadie of David & Nadia in the Swartland replied:
How badly has Coronavirus crisis impacted your business?
For a small business the sudden pause in momentum will always leave scars long term without a doubt, but battle scars are also lessons learned and not always bad so we do see this huge challenge as a time of reflection and working harder as ever on fundamentals. The knock-on effect of this global media pandemic will unfortunately have a big impact on the on-consumption industry, which is a very important part of our business as it brings exposure to new clients, but its also where a culture comes together. We’ve seen importers adapting from this reality and offering wines direct to customers which has had a positive effect, especially in Europe. The most relevant impact of the virus has been an emotional one as we are working harder than ever to keep all our people employed. Its not been easy to work with government institutions in terms of Unemployment Insurance Fund (UIF) or Temporary Employer/Employee Relief Scheme (TERS) and other COVID-19 relief schemes which has added to the emotional strain we are taking up at the moment. All positive and a big privilege to fight the fight for our people and the farms we are involved in.
How many wineries do you foresee closing as a result of the pandemic? What future for growers?
Difficult to predict, but we surely do not hope to see 80 wineries closing down, it would be a sad day for SA’s heritage, but mostly for unemployment figures already sky-high. The pause in wine exports both in bottle and bulk has lead to an oversupply given the time frame, market share lost and a very positive 2020 vintage with better yields, so this might have a counter-productive effect on the base price for a litre of wine, which will sadly ripple down to the farmer’s pocket. The reality of this might force growers to focus on premium quality fruit in dry regions where bulk production is so marginal and not sustainable in my opinion on all vineyards. More and more quality orientated fruit/grapes will hopefully result in more wine being bottled and more international focus on SA which will have a positive impact on reputation, price per litre and momentum. The oversupply in the short term might have the undesired effect of wines being discounted across the spectrum and 10 year’s of great work will be merely forgotten and farmers will be back to square one… within any crises lies challenges and introspection/reflection and hopefully in that, a revolution to change for the better and to see growth… we just hope that its not a mass rebellion first as hunger on ground level is such a reality all over and unfortunately with entitled politicians, time is not on our side.
What plans do you have in place to get going again once restrictions are eased? How will doing business be different?
With export bans lifted we are getting some orders out as we speak, which in these uncertain times world wide is a huge blessing. Constant dialogue with each and every roll-player has been fundamentally important, whether its suppliers or farmers or importers and distributors of our wines. Same storm, although not the same boat… and each and every business owner knows its limitations and shortcomings best and need to do business not at the cost of the next business as we will see a ripple effect which one won’t be able to stop easily. Ultimately we need consumers to earn money out of their economies and support our distributors and importers both locally and worldwide to get the wheel turning again. In terms of plans: we have not gone 100% social media or virtual, we’ve done a lot of research as to how we can farm and produce better and how we can communicate more efficiently to our customers and followers, rather, as we believe in the basics and fundamental part of our wines we can better and hopefully it is something we can communicate and offer to our clients. New vintages are due for release later this year and we hope and pray for an appetite from the world to buy and take up our wines, for that matter, SA wines in general. With Bill&Co. we’ve launched an online shop to create awareness on the Swartland wines and to promote the region’s produce. From D&N’s side we will communicate more frequently with our clients on all levels, but the timing thereof is crucial as we need to be sensitive as well to the reality of the situation we are in.
In terms of what we offer, regardless of how we offer it, we are consolidating more and more as we move on and learn from our very ambitious decisions. We’ve discontinued the Topography wines as an example, during vintage actually, and this allows us to be more focussed and precise in terms of what we offer. More changes will more than likely been seen in the next year of two when we bottle our single-vineyard Grenache noir wines. We are using this time to research, contemplate and re-align what we are about and we need to focus more than ever before as its not easy out there.
What will the South African wine landscape look like after the pandemic? Will the industry recover quickly or will it be changed forever?
The reality of a 5 – 7,5% minimum decrease in the economy of European countries will have a profound effect. Certain stronger economies within the EU will feel the effect less than others, but worldwide one can expect a financial recession, but hopefully not a depression. Fact of the matter is that people want to drink wine, regardless of the challenging times they are in as it goes hand in hand with food and culture, so hopefully once local deliveries are allowed, we can fulfil online orders as well as export orders arising from an increase in online sales at the cost of on-consumption sales which is bitter sweet. The lag phase for the on-trade to start up again surely does have an impact on us, on all of us, so we hope to see clients supporting the producers directly to bridge the gap as painlessly as possible. In Hong Kong as an example they celebrated the re-opening of the on-trade past Friday which will hopefully cause other countries to do the same under strict regulations and respect obviously.
To answer the question: it will not be a quick one to recover from….
Read other interviews:
Chris Alheit of Alheit Vineyards
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
Michael White of Highlands Road