Michael Fridjhon: Time for SA wine to adapt or die

It’s kind of hard not to approach 2024 with just a little trepidation. On an international level, things are not looking rosy. Many strategic analysts – not necessarily the scaremongering types – are suggesting that we may be moving towards a worldwide war with the same inexorability that characterised the second half of the 1930s. Here in South Africa an election year looms with nothing suggesting a clear route out of the cul-de-sac of the past few decades. As long as the ANC clings to power, the economy will continue to serve as carrion for a corrupt kakistocracy.

Failing ports and infrastructure, no reasonable prospect of regulations easing, and foreign markets constrained by their own crises – how much worse can things really get? Well – if there is a global conflagration, we still have an unimaginably long way to fall. If there isn’t, it’s easier to see that however badly things turn out, there will be winners as well as losers. In an epic Darwinian battle, it’s crucial to ensure that you have what it takes to emerge victorious.

In this fight for survival we have a mountain to climb: the 2023 export figures blanketed the winelands in stygian darkness. While it’s easy to blame WoSA for the decline, much of what has gone wrong lies beyond the capacity of any producer organisation. The comparable figures for Australia – while are still vastly better than South Africa’s – reflect a similar trend. Their wine exports declined by 2% in value and 3% in volume (compared with South Africa’s 11% and 17% respectively) in the 12 months to December 2023. At least they enjoyed huge growth in Hong Kong (as Covid-19 restrictions were finally lifted), a silver lining to the lead sarcophagus which has been weighing them down since the trade dispute with China cost them 99% of that once lucrative market.

The USA and Europe are de-stocking, partly because it was the first response to the anticipated recession which everyone incorrectly thought would ensue from the inflation spike. But where the retailers weren’t wrong was that the market was changing in front of their eyes. Suddenly wine has become a lot less sexy, while alcohol as a category has taken an additional hit.

Some trends are compounding the problem: GenZ is drinking less alcohol, more exotic fruit juices, more beverages with added nutritional or metabolism-enhancing components, more fizzy drinks. The fashion curve – which added so much excitement to the wine category for the past 35 or so years – is on a downward trajectory. And the only consolation is that everyone is in the same boat.

However, South Africa has some advantages which it’s going to have to exploit to the hilt if it’s going to pull out of the death dive. Key among these is the absolute quality of our entire offering, a factor not based on our devalued currency – as a number of blind tastings in the past few months has shown.

The pattern was certainly discernible when the results of what used to be called the Tri-Nations Wine Challenge (now the Global Fine Wine Challenge) were announced late last year. Among the judges, some of whom were MWs based in Australia, together with a rotation from the wine producing countries, was Anthony Mueller, the Robert Parker critic under whose brief South Africa falls.

He was there as a representative of the United States – having made the selection against which South Africa competed. The final results tell their own story. South Africa (tying with New Zealand) garnered five best in class trophies – one fewer than Australia. The US by comparison managed only a trophy for Merlot. Overall our best results were in red wine categories (and New Zealand’s were in whites). There’s no doubt we’ve begun to shake off the stigma of gawky, green-edged red wines.

When it does come to whites, the recent blind tasting hosted by Wines of Elgin tells its own story. A line-up of several of their best chardonnays were presented against some not unimpressive examples from Burgundy (mostly selling for two to three times the price of our wines). The outcome showed incontrovertibly that our wines are not simply doing well “at the price point” – they are doing well, irrespective of the price-point.

Much of this isn’t news to wine-savvy South African wine drinkers. However, the fact that our sales have so under-performed compared with our New World competitors in a recession year tells us that our messaging has failed. If we are to emerge from the current melt-down with at least the key components of our industry intact we are going to have to change the way we do things.

This is not a job we can afford to abdicate to WoSA: administrators are not salesmen. The wine industry is packed with hot marketers – think Mike Ratcliffe, Eben Sadie, Ken Forrester – and it is to them we should turn if we wish to stop the inevitable slide into oblivion.

• 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.