Editorial: Innovate or die – the urgent choices facing SA wine

This year’s edition of the South Africa Special Report by UK MW Tim Atkin was released recently. Make of his scores what you want (as for anybody’s scores) but the section that should be compulsory reading is entitled “South Africa at a glance – The 10 things you need to know” where the hard numbers reveal just what a structural bind South African wine finds itself in.

As Atkin relates, SA shipped 306 million litres abroad in 2024. Sounds impressive until you look closer: 182.8 million litres – almost 60% – went out in bulk. That vast lake of anonymous liquid brought in R2.4 billion out of total export revenue of R10.3 billion. Translation: more than half the wine, less than a quarter of the money. Bulk fetches around R13 a litre; bottled wine closer to R50. Guess where the margins end up – not in South Africa, but in some northern European supermarket bottling line.

Now zoom in on the vineyard. Growers are told they should feel lucky if they can get R15,000 a ton. It sounds like a decent payday until you do the maths: that works out to roughly R35 per bottle before the cellar, the distributor, and the retailer take their cut. In a domestic market where the “ultra-premium” category (R120 upwards) is just 4.3% of 451 million litres, and where the largest segment by far (41.68%) sells for less than R40 a litre – not even a bottle, a litre – it’s hardly Cap Classique and canapés for everyone.

The bigger scandal is how little wine farming pays as farming. The average return on investment in the sector is 2.6%. Forty percent of farms are breaking even or losing money. Only 12% are considered “sustainable” by Vinpro’s reckoning. Everyone else is one bad vintage, one load-shedding crisis, or one missed bank repayment away from exiting. It’s no wonder farmers are tempted to rip out vineyards and plant citrus or nuts – at least those pay. The miracle is that so many stick it out, often out of sheer bloody-mindedness.

The imbalance is structural. At the bottom end: oceans of bulk, sold cheap, eroding any hope of brand equity. At the top end: a tiny but dazzling cadre of producers making wines that can stand on the world stage, selling for R500, R1000, even more. In between? Precious little. Where other wine-producing nations have managed to establish a broad middle tier of internationally recognisable brands retailing at €8-15, offering both value to consumers and enough margin to sustain growers, South Africa remains stuck with a barbell model: boutique brilliance at one end, commodity plonk at the other

Everyone knows what’s required. Premiumisation at scale, better brand-building, less addiction to bulk contracts, a domestic market that supports something more than rock-bottom pricing. But that’s easy to say, hard to do when growers can’t cover their costs and consumers recoil at the idea of paying R120 for a bottle, never mind R300.

Why nothing changes
Why then do growers and the bottom end of the industry resist premiumisation, better branding, all the sensible stuff? Partly habit: bulk contracts are what oupa did, so why rock the boat? Partly desperation: bulk pays immediately, even if poorly, whereas brand-building takes years and a pile of marketing spend. And partly fragmentation: everyone wants their own label, their own quirky story. Collectively, it adds up to noise, not scale.

The most awkward reason is that the industry still doesn’t quite know how to sell wine to South Africans who don’t look like its traditional consumer base. Gauteng – and particularly the emerging black middle class – is the one obvious growth engine, but the industry has been glacial in courting it. Distribution is patchy, messaging is clumsy, and price points often misjudged. Too many producers are still chasing London buyers instead of Joburg professionals who might happily pay R120 – R200 for something aspirational if only it were offered to them credibly.

In fairness to the industry, there remains a cultural gap between much of South Africa’s wine establishment and the emerging market that won’t be bridged overnight. On my visit to Soweto during the annual Stellenbosch Experience earlier this year, I was struck by how much genuine interest there is in wine among new audiences but also how deeply European its codes and conventions remain. Building familiarity and confidence is going to take a very long time, but the appetite for engagement is clearly there.

There’s also the fear factor among producers: what if we bottle at higher prices and nobody buys? What if the shelves remain clogged with under-R40 brands because that’s all the trade will stock? Safer, then, to stick with bulk, even if it’s killing you slowly. It’s bloody-mindedness, but misdirected: stubborn loyalty to the wrong model.

The risk of attrition
The danger is obvious. If 40% of farms are already bleeding, if only one in ten is truly viable, and if bulk continues to define the export image, then attrition is baked in. Vineyards shrink, skills are lost, quality will eventually dip. The irony, and it’s a South African irony par excellence, is that just as our wines are winning more critical acclaim than ever, the economics have never been shakier.

None of this is to say bulk should disappear altogether. There’s a place for it, and arguably even a virtue in the lower carbon footprint per litre shipped. But when bulk becomes the default rather than the exception, the sector eats its seed corn. The industry hollows itself out for the benefit of retailers in Düsseldorf and London.

South African wine is therefore left with a choice. Does it want to remain a bulk supplier with a boutique fringe? Or does it want to fight for a middle ground that can actually sustain farms, communities, and reputations? The first option is easier and it’s what we’ve always done. The second requires coordination, marketing muscle, and consumers willing to pay more than the price of a soft drink for a glass of fermented grape juice.

Until that shift happens, the structural imbalance will remain: too much bulk, too little brand, grape prices that undercut viability, and a sector where financial distress is the norm rather than the exception. Solutions are not immediately obvious. As the Afrikaans saying goes, ’n boer maak ’n plan – and producer ingenuity needs to be forthcoming pretty damn quickly.