Exploring the duality of big-brand wines

Where are South Africa’s big-brand wines? It’s a perennial question. The UK is South Africa’s biggest export market and yet you won’t find any locally produced wines among that region’s top 10 leading brands when measured by sales. Australia, on the other hand, has the likes of Hardys and Yellow Tail, Chile has Casillero del Diablo and Isla Negra, California has Barefoot and Echo Falls…

It’s a problem because brands add value – about 60% of all local wine that’s exported gets shipped as bulk rather than packaged.

What’s the answer? It’s a conversation I had recently with Mike Ratcliffe, owner of Vilafonté, and Arlene Mains, winemaker of Seriously Old Dirt by Vilafonté, as we drank her 2021 vintage – this is a wine consisting of 88% Cabernet Sauvignon, 8% Malbec, 2% Cabernet Franc and 2% Merlot, total production amounting to 330 000 bottles, the recommended retail price domestically being R265 a bottle (£22 for the 2020 from UK merchant The Wine Society).

Ratcliffe and team are clearly trying to scale, as are the likes of Rupert & Rothschild with Classique, Boekenhoutskloof with The Chocolate Block and Kanonkop with Kadette… Other brands that have potential to go big are Alto Rouge and Roodeberg from KWV while it’s going to be fascinating to see what Heinken does with the wine portfolio it acquired from Distell – rationalise Nederburg? Sell off Durbanville Hills and Zonnebloem?

Branded wines have both strengths and weaknesses. In the world of wine, big and relatively prestigious names often cast a long shadow. Well-established wine companies have the reputation and resources to earn the trust of a broad cross-section of the wine-drinking public. They do this based on consistency. These wineries have mastered the art of producing wines that taste the same year after year. This reliability is appealing to consumers who are risk adverse and prefer a predictable flavor profile when they open a bottle.

Crucially, corporate wine companies also have reach. They have the infrastructure and distribution networks to make their wines widely available. This accessibility means that consumers can find their favourite big brand labels in wine shops and restaurants across the globe, making them an easy choice for those with only a passing interest in wine.

Then there is the matter of economies of scale. As Ratcliffe pointed out, he can drive a hard bargain with all his suppliers from cork producers to carton manufacturers because of Seriously Old Dirt’s size. Large production volumes often translate into cost savings. Big brands can leverage this to produce wines at lower per-bottle costs, which can result in more affordable options for consumers.

Before we decide that big brands are the panacea for all that ails the South African wine industry, there are some inherent shortcomings to the model and the first is surely homogeneity. While consistency is a strength, it can also be a weakness. Big brand wines may become formulaic, lacking the individuality and nuance that characterizes smaller, artisanal producers. The quest for uniformity often stifles creativity – wine as fast-moving consumer good rather than product of curiosity.

The flip-side of economies of scale is mass production challenges. Managing vast and far-flung vineyards and winemaking facilities can be a logistical nightmare – grapes for Seriously Old Dirt come from the greater Robertson area, Swartland and Stellenbosh, which means a lot of driving for winemaker Mains during harvest. In some cases, quality can be compromised as the focus shifts from craftsmanship to quantity. The art of winemaking may take a backseat to production quotas.

The dominance of big brand wines in the market can stifle competition and limit consumer choices. Smaller wineries may struggle to gain recognition and shelf space, potentially depriving wine enthusiasts of diverse offerings. You don’t really need more than three or four choices when it comes to baked beans or toothpaste but it would be a sad world if the same applied to wine regardless of price…

In any event, the modern South African wine industry might simply not be geared to produce big-brand wine. The number of primary grape growers has dropped from 4 786 in 1991 to 2 487 in 2022, and this exodus from the wine industry does not appear to have ended yet.

For a while, the decline in growers has been matched by an increase in the number of wine cellars crushing grapes – from 212 in 1991 to 582 in 2011. However, this trend is now in reverse, the total number having dropped to 523 in 2022.

Even so, the number of commercially available labels has not decreased, perhaps because producers are increasingly inclined to share winemaking facilities to keep production costs down. Micro-cellars (vinifying fewer than 100 tons) make up approximately 41% of all producers and have become a powerful force in the industry. They are often the most cutting-edge producers in terms of both production techniques and marketing.

Ultimately, the appreciation of big-brand wines comes down to personal taste and values. Most consumers will find comfort in the predictability of established labels, while some  will seek the diversity and character of smaller, artisanal producers. All I would add at this point, is that Tassies doesn’t get the respect that it’s due…