Exploring the duality of big-brand wines

By , 12 September 2023



Arlene Mains of Seriously Old Dirt by Vilafonté.

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…


3 comment(s)

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    PK | 13 September 2023


    Interesting article as usual. I find that the word brand is maybe misunderstood sometimes and what some of the SA producers want to achieve with their brands, are just unrealistic in terms of approach. Firstly mentioning Hardys and Yellow Tail, Casillero del Diablo and Isla Negra, Barefoot and Echo Falls in the same article as Seriously old Dirt and Chocolate Block makes no sense. It is like having a comparison between Temba Bavuma’s batting average and Pieter-Steph Du Toit’s 80 minute performance against Scotland, it makes no little sense and there is nothing to compare apart from the fact that they both represent South Africa at national level and are elite sportsman.

    The above mentioned brands are operating in the UK at £2.50-9+/bottle and just to compare, Chocolate Block at £20-25/bottle and Seriously old Dirt at the same price point, this is high-mid to high-end pricing in the UK retail market, what are we comparing when talking about brand building and mentioning million bottle+ production operations sourcing the high volume online and supermarket category in the UK?

    We are talking about our premium producers having a ultra premium range and then a premium range underneath that, but nothing comes near the entry level high volume production wines that the before mentioned brands like Barefoot and Echo Falls, Yellow Tail, etc can produce. They have built brands on entry level wines and in some cases have an option of something a little finer but even then hitting the mid-range level of pricing, but nothing gets close to high end pricing in the UK market for these brands. Are we perhaps coming at this from the wrong direction and this is potentially where Heineken and Distell partnership can really turn things around, with the approach to the market and focus of some of their brands.

    I just look at it sometimes as a little bit of confusion, not being 100% clear of what you want to do and wanting to play in different categories and fields, but not having the right gear for the event. Got brand new batting gloves, pads and GM cricket bat just knocked in, but I am going for a game of touch rugby in the park. We always mentioning the high % of bulk wines being exported, but we never mention the brands attached to those bulk %, perhaps there is no brands attached and is this maybe where the brand building is missing a trick?!?!

    Very rarely that we see premium and ultra premium brands in the wine world also supplying the low to entry level categories and in doing so, building a strong brand. Penfolds perhaps one and I may be missing some Cali brands.

      Christian Eedes | 13 September 2023

      Hi PK, Fair comment about not conflating entry level and more premium brands (which wasn’t my intention but I can see how my article could be read like that). The global wine industry might well be differentiated into two broad sectors, namely 1) commodity wine and 2) fine wine but they are, of course, inter-related. Whether you sell your old-vine Chenin for 5 GBP a bottle or 20 GBP depends significantly if not solely on marketing…

    Jeremy Sampson | 13 September 2023

    Well done Ed for raising yet again the fact that many in our wine industry are brand Philistines.
    If you want to suceed in busines you need to build a strong brand.
    Remember the 5 x P’s?
    Think about the stages of the marketing funnel.
    This applies to ALL business, not just wine.
    If you think I am talking double dutch you need help.
    Around 120 years ago the Chairman of Quaker Oats said: ‘ If this business were to be split up, I would be glad to take the brands, trademarks and goodwill and you could have all the bricks and mortar – and I would fare better than you.”
    Even today some still don’t get it. I call them dinosaurs. They will continue to belittle and snipe at Chocolate Block, Kanonkop, Vilafonte, Seriously Old Dirt and those who have built their brands and as a result have a loyal clientele and are able to charge a considerable premium. Someone once said ‘markeing is war.’ They were not wrong. Just ask the Aussies.

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