Michael Fridjhon: SA wine – where’s the vision?

By , 21 April 2021

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SA wine volumes as sold through the major international retailers are arguably not as high as they could be.

If being a national player in the world of global wine can be likened to the role of a protagonist in a boxing match, Covid-19 dealt South Africa a second blow below the belt. The first thumping was less visible at the time, more of a surreptitious knee-to-the-groin, but with enough power to leave the industry weakened and debilitated. It came in the form of a sudden decline in exports. It was as if we had fallen out of favour with international wine buyers just as we were bathing in the positive attention of several international wine critics. That’s probably why we didn’t notice – or at least never paid it much attention. At exactly the same time as Tim Atkin MW was awarding a Cape wine its first (“international”) 100 point score, export literages began a precipitate fall.

Allowing that 2013 was an aberration – a jump from 417m to 525m litres exported – the trend in the past decade had been solid but gentle growth, taking us from a little under 400m litres to 448m in 2017. Because we had once topped 500m it seemed that our trajectory was ever upwards. In retrospect perhaps even 2017’s export volume was a bit of a fluke, South Africa taking advantage of the seriously depleted European cellars following the massive frost damage in April of that year. Looking back on it, 2016’s 428m litres was the real peak. 2018 saw volumes easing back to 420m litres, 2019 a massive drop to 319m (long before the word “Coronavirus” had even entered the vocabulary) and then the catastrophe of the year of the pandemic.

It’s easy to see how we can allow the bleated complaint “we wuz robbed” to enter our thinking. For all the support from a portion of the international media (which in turn prompted mainly European buyers to make slightly more of an effort to drink Cape wine) we finished last year on 319m litres, fully 100m litres shy of the three-year average of 2014 – 2016, and 200m litres off 2013’s remarkable achievement. Figures like these don’t lie – we have some soul-searching to do.

Some issues are self-evident. Despite the positive press we get from the few critics who have made an effort to understand our best wines, we are still a bulk industry. Atkin’s selection may be broader than Neal Martin’s, but essentially they are sharing with wine geeks the achievements of our hipster winemakers. Not much of this message reaches the broader wine community.

Martin’s list of key players includes Sadie, Alheit, Mullineux, Savage, Keermont, Klein Constantia, Crystallum and Thorne & Daughters. Atkin’s universe is bigger and includes several producers who can put thousands rather than hundreds of cases into the market. Jancis Robinson has a regular (rather than annual) focus on Cape wines, but she too reviews many of the same producers. If you add up the total literage attached to this international commentary I’d be surprised if we’re talking about more than 3% of the country’s total wine production.

So what about the other 97%, and does this make us any different from France or Italy, or Australia and Chile? On the numbers, not necessarily by much: there’s plenty of very ordinary wine produced in all these countries. The difference lies in the nature and visibility of what is happening at the top end of the table, rather than in the vast subterranean lake which seems to afflict most wine producing countries.

Comfortably 80% (by name but not by volume) of the South African wine brands which feature in the reviews of international critics are produced in quantities of between 5 000 and 10 000 cases annually. Their producers sell all they are able to make, which means that while they raise the profile of the Cape wine industry, they are largely invisible in the retail trade. The remaining 20% are generally bigger volume producers. They may have up to 50 000 cases to sell, but a significant percentage of what they make is good, commercial wine intended to bring economies of scale to the winery.

In the last month, I have sat in on several meetings with major US retailers. For almost all of them, South Africa is an unknown quantity. Their customers have not been hammering on their doors asking for Cape wine. While the major buyers know that a few of the critics have started enthusing about what we produce, either they are not the voices whose scores really ratchet up the volumes or the message hasn’t yet trickled down to their consumers. If they did want to give us a punt, we would battle to make available real volumes of the cultivars which sell well in the States. Just how much decent cabernet and chardonnay are we in a position to offer? Shiraz hasn’t really gained traction in the US, pinotage and Chenin may be our international calling cards but they assume a market already attuned to our strengths.

As an industry, we must confront some unpleasant truths. We lack a coherent strategy. Australia drafted a blueprint in 1996 which outlined what was needed to grow its business over the next 30 years. It achieved its targets in half that time. Our Vision 2020 has long been forgotten. We stumble from one crisis to the next. While our winemaking is better, cleaner, more commercial and our profile has been lifted by a generation of hipster winemakers (most of whom own no vineyard and depend on marginal growers simply to remain in business) we’re not structured for success. Our largest national wine business has been dumbing down its selection for years. Our growers have been abandoning the industry at the rate of at least one per week for the last twenty-five years. We used to be able to blame the government for our plight – but that was when we thought it was capable of doing something, and was just ignoring us. Now we know better.

We are an industry made up of several largely unconnected parts: rugged individualists who grow grapes in ancient vineyards, edgy winemakers who turn the fruit into striking and original wines; a few dozen mid-volume producers, mostly family-owned and family-run; and about half a dozen big players, several of whom are largely unknown in the local market and who spend their time fighting for space on international supermarket shelves. We need a representative body that understands how these component parts function, one which embraces the needs and aspirations of the whole industry, and not just a segment of it. Instead, with no real strategic leadership, the minister missing in action, declining exports coupled with a currency which remains resolutely strong, its full steam ahead towards the iceberg with a riot at the lifeboats and no one on the bridge.

  • 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 Old Mutual Trophy Wine Show.

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  • Angela Lloyd21 April 2021

    The following message was sent to me by Larry Jacobs, founder of Mulderbosch and latterly owner, winemaker at Hahndorf Hill in the Adelaide Hills, South Australia. He agreed that it should be posted as a comment under Michael’s opinion piece.
    ‘Michael Fridjhon’s comments are interesting and valid in many other countries.
    No more so than in Australia. Here we have perhaps 4500 producers, of which the biggest 10 of these 4500 producers generate 85% of ALL the wine. So, the remaining 4490 producers fight it out for 15% of market share. And it’s the 2500 really small producers (under 15,000 cases per year) that are home to many of the artisan producers, who generate much of the review paragraphs both locally and abroad.
    Not too different to other New World producers perhaps. But it’s always hoped that the slip steam of publicity created by these high-end small producers will embellish the overall standing of the Australian market – including the top end Giants.
    So far it hasn’t worked for Australian wine in that the main western markets (USA, UK, Germany) who simply refuse to pay more than a couple of dollars for a bottle of Australian wine. It was the China market that was happy to pay 2-4 times that amount for the same wines. But of course, that is now history. So, SA will have to battle it out with Oz wines for the entry level markets of US and EU.
    I really think there is a HUGE opportunity for SA wines to get into the China market – Go there with corks (not screw caps) and capitalise on the *history* and historical connection the *FRENCH* Huguenots and the Germans connection
    It’s very important for SA producers to note that the Australian wine producers discovered, to their joy, that the market in China was prepared to pay 2 – 3 times more for their good wines than the USA/EU markets were prepared to pay. They readily recognise the value in good wine, so SA producers should be prepared to ask prices that truly reflect the value their products. The market in China is definitely not a race to the bottom of the price barrel, and SA producers would be doing themselves a huge disservice if this was to part of their strategy. I can’t over emphasise this point. Be prepared to offer discounts on these prices of about 15% when indicated.
    Invite them to SA, and wine them and dine them and show them SA history and hospitality-*glamour*. And the wine makers must be prepared to spend a lot of time in CHINA schmoozing and making friends and eating and drinking strange things till all hours of the night.
    PS: If SA is part of the Belt and Road initiative, then SA Agriculture Minister should get into the ear of high-up Chinese officials and ask them to ‘advise’ the China public to enjoy SA wines. The public will respond in droves! But just do it! No good just talking about it! They will suck up every drop you can make if this works! There won’t be enough container ships to take the wine to CHINA!! Please get this message out!’

    • Michael+Fridjhon21 April 2021

      Valuable insights from the man who designed and oversaw the production of SA’s first first icon sauvignon blanc, thanks Larry

    • Angela Lloyd23 April 2021

      Larry asked me to post his clarification on the discount advice as follows:
      Be prepared to offer discounts on these prices of between 10-15% when indicated, such as volume incentives. But the customer is usually happy to understand that sometimes, such as on very special and rare offerings, that there may be no discount or perhaps a 5-8% offer.’

  • Reinie Biesenbach21 April 2021

    I agree. A compelling vision and associated strategic plans are sorely needed. A quick search led me to Australia’s latest document in this regard, entitled “Vision 2050 Australian Wine: Enjoyed and Respected Globally” (published in April 2020), which might be of interest to readers.

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