Tim James: South Africans drinking more wine

Here’s an extraordinary statistic about South African wine for you, though it might not appear so at first. In 2022, local consumption of wine was 453 429 126 litres. It just seems like a big number, really, except when you look at the numbers for previous years. Not only is the 2022 figure more than back to what it was before the Covid-ban blip, it’s the highest ever. Ever. Something worth noting by the doom-and-gloom people, and certainly interesting.

More remarkable still, we’re in a world and time where, just about everywhere, wine consumption has been decreasing at a regular rate since 2018. In Europe, which accounts for nearly half of the world’s wine consumption, the 2022 (estimated) volume is down by about 2% on the previous year. Consumption in most countries decreased – just half a dozen other major countries saw increases, led by Portugal. South Africa’s percentage increase over 2021 was the highest, but of course the liquor bans in 2020 and 2021 led to significantly less drinking, so in itself that spectacular year-on-year increase is not surprising.

Not that those who are keen to see more wine consumption by South Africans are going to be satisfied. Per capita and per adult (15 years by international convention) consumption here is still low by international standards. While the per adult annual consumption of wine also bounced back to pre-Covid levels, at 9.82 litres it’s pretty much average for most of this century since 2002, when it started dropping significantly (it was 11.2 litres in that year). The 2020 local figure of 7.4 litres per adult (low because of liquor bans) compares just fine with Brazil at 2.6, but the USA was 12.2, Australia like most of Europe in the high 20s – France and Italy nearly 50 litres, but Portugal tops at 51.9.

So the pushers of wine will see that they have a way to go, even if they’ll be happy with the direction in which things have generally been moving. It’s worth noting that the increase in local consumption is inevitably at the bottom end – I’ll perhaps come back at some future date to look at what South African’s are actually drinking.

These international stats all come, by the way, from the OIV’s summary in its State of the World Vine and Wine Sector in 2022, available here. To discover some adjacent statistics for South Africa, I turned to the latest compilation of info from Sawis: SA Wine Industry 2022 Statistics Nr 47, also available online.

There, the export figures show that the industry is fortunate that South Africans are drinking more, given that exports have shrunk. In 2022 the total volume of wine exports was approaching 369 million litres, down 20 million on 2021. Higher though than 2020 (317 million), the first Covid year, though it was scarcely down on 2019 – a non-Covid-ban year. Barring 2019-2021, one has to go back to 2011 to find annual exports below those achieved last year.

But, of course, just about all wine exports, around the world, have shrunk recently, given that consumption has been going down. Another interesting source of international statistics that comes my way is a monthly “Global Market Report” by a major “global wine and grape broker”, Ciatti. The latest one sums up the situation by saying that “Ultimately, the wine industry is entering a period of painful but necessary rationalisation of production to bring global supply back into greater balance with demand after 15 years of declining consumption.”

In the light of that, perhaps there should be a change of attitude from those commentators who lament, in somehow accusatory fashion, South Africa’s declining vineyard area and the apparent reduction in the number of primary grape producers. In fact, especially in a declining world market, I can’t think of anything much better for South African agriculture than some poor quality bulk grape producers using water and sunshine to produce crops that the country and the world is more in need of (to the extent that that is happening). To worry that the wine industry is shrinking is pure abstract nonsense if the land and the labour force are better used elsewhere than in producing more grapes to feed the world’s wine-glut.

In fact, despite the continued shrinkage of vineyard area, wine production has tended to grow – implying that the reduced hectarage is being worked harder and harder, which is unlikely to be a good thing for quality. That’s what has needed lamenting. But perhaps that’s changing. 2022’s tonnage was down on 2021’s, and Vinpro’s May forecast for the latest harvest suggested that “in terms of volume, 2023 may be one of the smallest harvests in more than a decade”.

Weather may have had something to do with that, but surely the continued pace of uprootings is having a real effect now. The most notable recent vineyard decline has been in the Northern Cape (industrial farming at its most intense), with reduction of hectarage in Olifants River also notable. (The total hectarage at end 2020 had slipped below 90 000; at the turn of the century it was over 105 000.)

It’s worth returning to the Ciatti Report and noting what these international brokers say about some strengths of the local wine industry at this time of world wine consumption decline:

“The domestic market’s strength, the shorter 2023 crop – down an estimated 14.5% from 2022 and one of the smallest of the past decade – and the greater production of white wine versus red, have helped insulate South Africa against some of the inventory and storage headaches seen in rival producer countries. Some 754-780 million litres of wine was produced from the total 2023 crush of 917 million litres (with the rest going for concentrate and distilling), roughly equal to the combined domestic and international sales of the 12 months to June. Less storage in South Africa than in other producer counties over the years has led to a more efficient industry, traditionally possessing less excess inventory than its rivals – a particularly welcome attribute at this time of global oversupply.”

That sounds pretty positive in terms of a better balanced wine industry. Looking on the bright side, for a change.