Michael Fridjhon: Succession Crisis? What succession crisis?

By , 28 September 2016



View onto the vineyards of Jordan Winery at sunrise, Stellenbosch, Western Cape, South Africa

View onto the vineyards of Jordan Winery at sunrise, Stellenbosch, Western Cape, South Africa

There’s no one who seriously disputes that the Cape wine industry has made enormous progress in the past decade. From playing serious catch-up after 1994, and achieving something of a middle-of-the-road equilibrium by 2010, it has powered ahead, garnering critical acclaim, stronger-than-ever exports, and a real visibility amongst modern wine aficionados all over the world. It’s not about to unseat Bordeaux or Burgundy among traditionalists – but for a new generation of wine drinkers for whom the old classics may be benchmarks rather than compulsory purchase, South African wine is definitely on a shopping list.

It is, however, not an industry free of commercial and strategic problems. We all know that most of the growers are under-recovering on their real costs. At the same time too much Cape wine is sold in bulk and at price points which continue to compromise the image of the better producers. Finally, as an industry, it is under-transformed and therefore dangerously exposed, its relationship with government too tenuous to optimise anything like its full potential.

In the midst of this there lurks the question of its future: its sustainability in the financial sense, its exposure to climate change and diminished water availability (and, of course, to competition between users of this increasingly scarce resource), the seeming absence of a guiding hand on the tiller. There are even concerns about the next generation of leadership – across the commercial entities, the producer organisations, the critics and the entrepreneurs who play a role in generating the excitement upon whose tide it moves forward so much more easily.

Some of these concerns are more easily disposed of than others. After a leadership vacuum which followed the transformation of the KWV from industry manager to simply another commercial player on the landscape, there are now new structures which are playing a valuable role at the production side of the equation. VinPro has emerged from the shadows, and under Rico Basson and his team is increasingly assuming the kind of behind-the-scenes leadership which has largely been absent since the late 1990s. The quality of their research, the data available to growers and producers, and the interface that VinPro facilitates with other key players is a measure of the capacity that is being created.

The big commercial players have been getting on with doing what they do best. Under Richard Rushton who took over as CEO of Distell at the end of 2013, the company has seen solid growth in both revenue and profitability. While figures for the other major players (all of whom are not listed companies) are not the in public domain, there’s no indication that they have been anything except equally successful. The recent loss of Tim Rands, founder and driving force behind Vinimark, was not unexpected, and the company he created now has a momentum of its own. His legacy will, in part, be reflected in how it manages this transition. The same is equally true of all the mid-size players in the wholesale and distribution side of the industry: they have already attained the critical mass which gives them a viability which will outlive their current incumbents.

At the production side much of what has raised the industry’s profile internationally has come from a new generation of winemakers – whether they are the rockstars/young guns/lunatic fringe beloved of critics and commentators, or the lower profile players who have made such an extraordinary difference to the average quality of Cape wine. This is a succession success in its own right: as the Old Guard passes out of the cellars there is a depth of talent waiting in the wings – and while this is not grounds for complacency (the game internationally is very competitive), it is a sign that there is no immediate cause for concern.

Critics, writers, pundits? It’s a different industry today from the one which needed the likes of John Platter to build an interpretive bridge through editorial, guides and hard copy literature. We don’t have a vibrant wine press, but that has been a process of long-term erosion which pre-dated the demise of Wine Magazine, and has gathered pace with the hurtle into the chasm of print media generally. There’s no shortage of commentary, online, at wine events (which hardly existed in the days when print flourished) and in social media. Sometimes succession is not about continuity but transformation.

The WineMag editor briefed me to write about what he believed was a gaping void in the next wave of leadership. I’m not on the same page. While there is a tendency to imbue the major figures of the past with a gigantic stature (and therefore to diminish the form and perceived influence of those who succeed them), the reality is often different. As far as I can tell, the South African wine industry is – at least from a succession perspective – in robust good health and it’s a privilege to be part of it.

  • Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is 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.


4 comment(s)

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    Mike Ratcliffe | 4 October 2016

    A stimulating piece. In my opinion, farm worker education and worker upliftment remains the biggest and most complex challenge for the entire wine industry. It also remains the soft exposed underbelly of the entire success story. It will only be effected by strong leadership and the imposition of some sort of enforcement mechanism. Some sort of ‘carrot and stick’ approach will need to be found as the industry, in general, has shown that it will not self-correct.

    Tim James | 1 October 2016

    Perhaps a significant weakness of Michael’s overview is that he doesn’t discuss further (political, social, racial) implications of his correct suggestion that “Sometimes succession is not about continuity but transformation”. If he did ponder this lack of transformation in the succession that’s taking place, I think he’d see more to disturb him.

    Tim Aktin | 29 September 2016

    Excellent piece, Michael, and good to read a South African wine writer emphasising the positives.

    Christian | 28 September 2016

    The above opinion piece is encouraging but as Winemag editor, I don’t think I was completely misguided in posing the question about succession.

    From my point of view, our corporates (DGB, Distell and KWV) are devoid of a strong wine culture – there are no charismatic individual leaders in the mould of the late Ronnie Melck or what Mondavi was to the US or Evans to Australia. Moreover, the corporates are heavily implicated in driving the grape price down.

    Meanwhile, the Young Guns, for all the fabulous wine that they are making, typically have no tenure of land. And as for wine media, we are allowing our future to be dictated by fly-in, fly-out international commentators.

    Eagerly await further comment…

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