Michael Fridjhon: Stellenbosch – in need of an urgent re-think?

By , 28 August 2019

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Stellenbosch has had a bad press lately: the producers and those who represent it have been criticised for losing focus, for not making the most of the brand value attached to the appellation, for letting themselves down. They can hardly plead innocent. Twenty years ago Stellenbosch stood at the apex of South Africa’s wine of origin leaderboard. If you were shopping for viticultural land, that was where you would be looking. You were entitled to assume that the premium you paid for the land would translate into a premium earned on the sale of the fruit. This was because it was believed that “Stellenbosch” meant something to wine buyers.

The view from Stellenbosch property Le Bonheur.

Some of the changes have occurred beyond the powers of the producers and their representatives. At the same time as they were not burnishing their collective reputations, wine fashions evolved and other regions profited from the changed expectations of consumers. The offering of the Swartland was pretty much the polar opposite of what Stellenbosch aimed to provide. It was less flashy, more craft-oriented, with the sex appeal of old dryland vineyards whose fruit quality was not necessarily compromised by a virus. Some of the varieties it had to offer had long been expunged from the plantings on Stellenbosch’s glamour estates. The Swartland could also more easily accommodate personality-driven rockstar winemaking. In Stellenbosch’s world of high-end properties, many under plutocrat ownership, there wasn’t space enough for all the egos jostling together.

Stellenbosch, however, is not only a world of great wine chateaux, of vast properties with tree-lined avenues leading to Cape Dutch manor houses. It also has hundreds of small growers, hereditary and increasingly impoverished landowners who sell their grapes to their better-off neighbours and to the wholesale merchants. Their revenues have declined as farming costs have increased faster than grape prices. Caught in a cash squeeze they have not been able to invest in their vineyards so that the inexorable spread of the virus has seen grape quality and yields decline, which in turn has exacerbated their predicament. Many are now marginal: some figures suggest that a majority are moving into the realm of cashflow losses, which means that their borrowings will increase. If they cannot swiftly reverse this (and there’s little to suggest they can), the growing interest portion of their debt to the banks will overwhelm them.

In the past couple of years there has been growing recognition amongst some of the region’s key players that a greater effort is required, and this has led to a number of initiatives: the Cabernet Collective comes to mind, as well as the various sponsored roadshows such as the Sanlam Private Wealth junket and, more recently, the Pick & Pay show. (It could be argued that the move from Sanlam Private Wealth to Pick & Pay reflects perfectly the decline in the appellation’s fortunes).

However, ignoring for a moment the plight of many of the region’s producers, the question to ask is what was the leadership supposed to do once it had become clear that the image of Stellenbosch needed a facelift? One of the obvious marketing difficulties is that Stellenbosch has been blessed with many message options: it’s a prime source of great cabernet, on average the best in the country. It has fabulous chardonnay (notwithstanding the fact that Elgin has appropriated this selling point). It still has some of the country’s finest old-vine Chenin. There’s some very good wooded sauvignon, a couple of benchmark syrahs, and the best of the country’s Bordeaux blends. With all this choice, it doesn’t make sense to single out a single cultivar or style.

There’s also huge diversity within the appellation: the varieties giving a stellar performance along the Helderberg and towards Somerset West are not necessarily the same as do well along the Simonsberg. Even when they do (cabernet for example) the expression is completely different. The term “broad church” so frequently applied to the heterogenous nature of the ANC could as easily be applied to the Stellenbosch Wine Routes, a broad amalgam made up of several individually more coherent groupings, a kind of United States of Stellenbosch.

Regional unity in the Cape wine industry has much the same shelf-life as political unity in the Israeli Knesset: it lasts until it’s tested by the first voting resolution. Only in the presence of a life-threatening crisis does everyone pull together. It may now be that this is the predicament confronting the region’s landowners. If Stellenbosch cannot provide a justification for demanding a premium for its fruit two things will happen, for sure. Firstly many of the growers will go bankrupt, probably in the next five years. Secondly, land values will fall faster than elsewhere in the Cape wine-lands as buyers recognise that the potential yield per hectare doesn’t justify the prices the vendors are hoping to attain.

The Wine Routes have elected Mike Ratcliffe, co-owner of Vilafonté in Paarl, to represent them. This is at least a good start: he’s a creative thinker, with ample experience and no shortage of ideas. Unfortunately, since the sale of Warwick, the Stellenbosch property that was owned by his family, he no longer has skin in the game. This may not matter to him (though I can’t see why not) but it matters to everyone else. He needs to offer a plan of action with quantifiable deliverables. Unless he is seen to be investing (more than just his time, which people generally think has no cost) it will be hard to persuade his compatriots that they need to spend what it will take to fix the badly depreciated asset they call their appellation. 

Will it work? I’m not sure. My sense is that the Israeli Knesset analogy applies, with everyone squabbling oblivious of the extent of the threat. More importantly, it’s going to take more than leadership. The Six Day War or the Battle of Britain (as you prefer – it’s hard to tell who these comparisons offend), was not only won because there was a strong leader to unite behind: it required a great military machine, a brilliantly planned campaign, and the resilience and courage which comes from knowing there is no alternative, no easy way out. So far nothing I’m seeing suggests this kind of mindset, this kind of resolution.

  • 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.

Comments

7 comment(s)

  • Francois-Jacques Malan2 September 2019

    “Twenty years ago Stellenbosch stood at the apex of South Africa’s wine of origin leaderboard.” – This sentence reads as if it is no longer the fact. Stellenbosch certainly doesn’t have a monopoly on premium/luxury wine (>R200 for the purpose of this comment), there is Chocolate Block, a Swartland wine made in Franschhoek, Hamilton Russel from Hemel & Aarde and a few Constantia wines that are very successful. Stellenbosch is however still the leader by long shot when it comes to this category, to name a few: Meerlust, Kanonkop, Rust & Vrede, Alto, Waterford, Vergelegen, Thelema, De Toren, and that list doesn’t even consider the likes of Rupert & Rothschild and Boekenhoutskloof, that are major buyers of Stellenbosch grapes, pushing up the price of Stellenbosch grapes.
    It might not be a homogeneous image across the town, but the Stellenbosch appelation is as healthy as ever, and poised to leap to the next level.

  • Anita31 August 2019

    I think you must all just be patient, there is a lot of positive debate around these issues you’ve raised and Mike and the entire team at Wine Route are working hard to get people talking and getting strategies in place. Stellenbosch is a strong name and Cabernet is definitely a strong variety for Stellenbosch. Change also doesn’t happen overnight and I’m seeing a whole lot of heavy weights getting more involved in discussions around very important issues. Things are happening but can also only happen when people choose to get involved and come to the party so to speak. This is just my humble opinion.

  • Duncan28 August 2019

    Once a cartel always a cartel?

  • Michael Fridjhon28 August 2019

    Hi David – everything you say is true: Stellenbosch can produce edgy, exciting wines as well as chateau-style grands vins. Strategies like this will also serve to save old vineyards and keep growers with well-sited vineyards in the supply business. My fear is that this will be too little, too late for many, and reversing the downwards trajectory needs a decisive response.

    • David Clarke28 August 2019

      Agree Michael, whilst not wishing the downfall of any wine businesses, it seems a regeneration of Stellenbosch can only happen with a (group)mind-set change.
      And if individual minds can not be changed, then a change of individuals is what’s required?

  • David Clarke28 August 2019

    Meanwhile, the cracks in the traditional monolith of Stellenbosch have allowed other producers to reveal themselves. Thinking of Craven, Van Loggerenberg, Scions of Sinai, Keermont, Reenen Borman, B Vintners, Raised by Wolves et al.
    This is a good thing for Stellenbosch and South Africa in general.
    Especially given the fact that many of them support growers in the region to farm with more of a quality mindset and, extremely importantly, remunerate them for the effort so the farmer can make a living and reinvest in their vineyards. It is a win-win situation.
    When an extra R1000 a ton means roughly an extra R1.25 to the cost of the grapes in each bottle, there is no excuse to pay what is fair for well-farmed, high-quality grapes.

    • Kevin R29 August 2019

      @David – Agreed 100%. Give the grapes to producers who will do something interesting with them, not for the sake of it, but for improved quality.

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