Michael Fridjhon: Opportunity in adversity for SA wine

It’s hard to decide whether to laugh or cry: the great Cape drought of the second decade of the 21^st century has turned into the great flood a few years later. Not since 1957 has the region experienced anything like the deluge of the last three months. In addition to the wash-aways and the damage to infrastructure, there is an unquantifiable cost in human misery. It’s difficult to remember that only a few years ago a bath was an unheard of luxury for residents of metropolitan Cape Town.

Meantime in 2024 in the Northern Hemisphere, climate change has thrown a saw-sawing curved ball at vignerons in many of Europe’s most prestigious appellations. From devastating hailstorms via months of summer rainfall, to baking heat which has brought forward harvest dates (where there is still fruit worth harvesting) earlier than ever. For growers who thought they were managing the transition to organic viticulture, 2024 has been a year to break even the most resilient of them.

If you have to choose where you would want to be producing wine you need to factor which of these prospects is the more easily navigated. It can’t be difficult to conclude that if it’s wet conditions you have to manage, better to have the rain in your winter rather than during flowering and the ripening season. On the other hand, devastating heat in summer is an equally destructive prospect: the kind of conditions which shrivel berries and make the surrounding countryside a tinderbox. Given these circumstances, you have to ask why anyone would choose to farm grapes and make wine.

This is not the end of their misery. In Bordeaux (and to a lesser extent Burgundy) prices are in free-fall, the result of a string of generous vintages (for which, you might argue, 2024 was an inevitable correction) as well as a marked decline in the consumption of high-end wine. Flat wine sales are not the exclusive province of the French. The Cape’s premium producers may not be as keen to share their latest trading updates, but you can be sure that the vast majority are selling below their historic averages.

Declining wine sales are a worldwide phenomenon. There are many reasons for this trend, ranging from the demographics of ageing baby-boomers, to the consumption patterns of Gen Z and Millennials – who supposedly drink less wine, less often. But a key explanation, perfectly outlined by Oliver Styles writing for Wine-Searcher, is that consumers pretty much everywhere simply don’t have the discretionary spending power for this kind of indulgence.

As Styles writes “It seems relatively obvious to me that the main driver of the decline in wine consumption is due to the real growth in income inequality over several decades, compounded of late by the likes of inflation/cost of living crisis. Personally – and I’m perfectly happy to be alone on this – I believe this is the major factor behind wine’s declining fortunes.”

So here you have it: if you grow grapes climate change puts your enterprise at risk, pretty much wherever you are. If you make or sell wine, you are faced with a surplus of supply over demand at exactly the same time as cash-strapped consumers are either forced to buy down or are turning to other beverages.

It has to be said that this may be a particularly tricky time in the history of the wine industries of the world, but it’s not a first for the Cape’s producers. The years of isolation, when export markets were closed to premium Cape wine and the local market was significantly smaller than it is today, is not a distant memory (even if the current generation of producers doesn’t have first hand experience of this).

Those who have been through difficult trading conditions are better equipped the next time there’s a crisis. But what can they do to make a difference – especially if margins are under pressure because more prestigious appellations and producers have been forced to discount? The answer, it appears to me, is that we should be playing to our strengths, and it’s well worth enumerating what these are.

Firstly, in relative terms, we are a low-cost production area: we can handcraft wines for less than any competitor playing in the fine (not bulk) wine market. Secondly, Cape wine has benefited from a considerably raised profile in the past decade – the result of the work done by our rockstar winemakers in international markets, the efforts of the Old Vine Project and the way that Cape Chenin now occupies a central position on the world stage (even if the category is still very much in an evolutionary phase.)

Thirdly our performance with the key so-called “international varieties” namely chardonnay, sauvignon blanc and cabernet has never been better. Cape cabernet has moved beyond the era of virused vines contaminating the fruit, while at the top end the Cabernet Collective is drawing attention to our best examples. Sauvignon Blanc has likewise begun to make a name for itself, especially in those international markets which discovered its virtues in the years when New Zealand’s vintages were compromised. Finally, Cape chardonnay is now spectacularly good – as Lisa Perrotti-Brown pointed out after judging the class as the 2024 Trophy Wine Show.

So we should be looking at the tumultuous state of the world’s wine markets and instead of panicking, we should treat these troubled times as an opportunity. If limited disposable income is really what is driving down wine sales around the world, we are better positioned to deliver competitive value than any other major world producer. Now is when we need to work together, to take advantage of new and enthusiastic leaders occupying the corridors of power, and to take the message of fine Cape wine to an audience ready to discover the excitement of what is being produced in our vineyards and cellars.

• Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is the founder of Winewizard.co.za and holds various positions including Visiting Professor of Wine Business at the University of Cape Town; founder and director of WineX – the largest consumer wine show in the Southern Hemisphere and chairman of The Trophy Wine Show.