This was the
crux of the 10th Nedbank VinPro Information Day, which was attended by more
than 800 wine industry role-players at the Cape Town Convention Centre on 22
January 2015. The annual wine industry conference was presented by VinPro, an
organisation that represents close to 3 500 wine growers and cellars, with
a financial contribution from Nedbank Business Banking.
Keep the lights on – Nicky Weimar
South Africa
is showing weak growth for an emerging economy, with strikes, disappointing
growth in key export markets and load shedding hampering momentum towards economic
expansion. Nedbank Senior Economist Nicky Weimar did one of her hallmark, fiery
presentations, managing to bring across a somewhat bleak message in a clear and
entertaining manner. Weimar said the economy was in “low intensity chaos”, with
the mining and manufacturing sectors taking the biggest blows.
On the upside,
the “spectacular” 60% drop in the oil price could be South Africa’s saving
grace, as it promises to put money back into the consumer’s pocket. Weimar
ascribed the drop to excess supply, driven by fracking in the US and increased
production in Iraq and Libya. If the rand weakens South Africa will, however,
benefit less from the lower oil price.
While Weimar
credited the Reserve Bank for sound decision-making, she warned that government
cannot sustain remarkable spending on public service salaries. “Spending more
on public sector salaries needs to be justified by private sector expansion. If
that is not the case, it’s not a sustainable situation,” explained Weimar.
Weimar
concluded that the economic outlook for 2015 should be rosier than that of last
year, but emphasised that “we need to keep the lights on”.
South Africa should take off in the US – Jancis Robinson
South Africa
has the water, soils, stories and diversity to really make its mark –
particularly in the US.
The
influential UK wine writer and keynote speaker, Jancis Robinson, said that the
US is ripe for the picking; a market she sincerely believes South Africa can
make inroads in. “South Africa has the tastes, styles and varieties that the US
market will love!” she commented.
Consumer
interest has shifted from the cellar to the vineyard and wine drinkers are
looking for wines with an origin and heritage. Robinson emphasised that there
is a renewed interest in what happens below the ground, adding that South
Africa is lucky to have a myriad of soil types.
Robinson was
especially complimentary towards South African white wines, singling out Chenin
Blanc and Sémillon. Confessing that she has a soft spot for Sémillon, Robinson
urged producers not to allow this variety – which used to be one of the most
planted cultivars locally – to disappear. Another South African heritage
variety that was mentioned, is Cinsaut. “Put Cinsaut on the label in the US and
you’ll instantly have a young, hipster following,” she quipped about the
variety that used to dominate red plantings.
Savignan,
Assyrtiko, Petit Manseng and Sauvignon Gris were some of the “geeky” varieties
that Robinson said are gaining traction and are also being planted in New World
regions. Commenting on “fads”, Robinson said that although natural wines are very
popular, it is imperative that these wines still taste good. Organic and
biodynamic wines are viewed in a similar vein, with Robinson suggesting that
she is “wary” of wines of which the green credentials are the pertinent
marketing message.
Although
consumers are becoming tolerant to more tannins in both white and red wines,
Robinson suggested that the use of new oak barrels is decreasing, with older, larger
barrels or alternative vessels, such as amphorae replacing these.
Reflecting on
mass market trends, Robinson said that the Pinot Gris craze has reached its
peak, while the rise of rosé is also reaching a plateau. She added that
Champagne is losing its “stranglehold” on the bottle-fermented sparkling
category, with the market share of alternatives like Cava and Prosecco still on
the rise.
Robinson argued
that wine that is going to be drunk shortly after purchase should not be
shipped around the world in glass bottles, mentioning pouches and plastic as
sensible alternatives.
Time to harness sophistication trend – Craig Irving
South African
winemakers are stuck in their own barrels and should adapt to seize African
opportunities.
Straight-talking
Consumer Insight Agency CEO Craig Irving lives his motto that “a desk is a
dangerous place from which to view the world”, having managed projects in over
20 African countries. According to him the continent holds immense potential
for wine, of which the attributes of sophistication should be harnessed for the
African market.
“The new bling
is subtlety and class,” explained Irving, highlighting the importance of knowing
the sophisticated language and understanding the cues of the category, in which
the goal posts of what’s interesting or bespoke are forever moving.
He emphasised
that wine – and particularly South African wine – has lagged behind other
liquor products, which are the “front facing” beverages of the continent.
A lighter, but promising vintage – Francois Viljoen
South Africa
is making more wine from fewer hectares of vineyard. While this is in line with
the global trend, it is not sustainable given the age of some of our vineyards
and would require that the industry invests in new plantings.
The manager of
VinPro’s viticultural consultation service, Francois Viljoen, explained that
pressure on the profitability of wine grape production has led to a shift to
higher yields. This was brought about by new viticultural practices and in
South Africa’s case in particular, the recent plantings of higher yielding
cultivars, clones and rootstocks.
The recent
plantings were predominantly in the irrigated areas such as Breedekloof and
Robertson, while Stellenbosch and Swartland had a notable shortage of recent
plantings. High yielding Chenin Blanc, Pinotage and Colombar saw the highest
new plantings since 2010, with the Cabernet Sauvignon vineyards decreasing by
more than 1 500 ha during the past decade.
In 2014, South
Africa experienced the third ideal winter in a row, with sufficient cold units
and rain. A warm August resulted in one of the earliest harvests in decades,
while a warm, dry and extremely windy summer also contributing to the early
season, requiring significant irrigation. The 2015 crop is expected to be
lighter than the bumper 2014 vintage, while quality is promising at this early
stage.
Agri-processing to drive growth – Minister Alan Winde
Transforming
the industry through land reform projects and looking beyond production, with a
focus on agri-processing, is top priority.
Western Cape Minister of Agriculture, Economic Development and Tourism,
Alan Winde, emphasised the importance of the agricultural sector – specifically
agri-processing – in driving growth and job creation in South Africa. “As the
Department embarked on a new term, the focus was on game-changing industries
and projects that will deliver meaningful jobs and growth within the next five
years. Agriculture is one of these game changers,” explained Winde.
The country’s
National Development Plan (NDP) has set a target of 20% transfer of
agricultural land to previously disadvantaged South Africans by 2030. “The
Department of Rural Development and Land Reform has launched the District Land
Reform Committee, which will be responsible for identifying land reform
opportunities in specific areas,” said Winde.
Failure to
address land reform will impact negatively on competitiveness and market
access. Agri-processing is already a large contributor to the economy and holds
significant growth potential. It directly contributes R12 billion in gross value
added and accounts for 79 000 formal jobs in the Western Cape.
“We will have
to tackle key challenges, such as the scarcity of energy, and aim to improve
water management by developing new infrastructure and implementing water use
efficiency programmes. Barriers to market access, such as certifications and
other requirements in export markets need to be addressed,” explained Winde.
Think design with wine tourism – Alayne Reesberg
Wineries are
encouraged to tell their authentic stories, focussing more on local design.
Design Capital
Cape Town CEO, Alayne Reesburg, urged delegates to find something in design
that works for them, something that will put the consumer at the centre of
their strategy. Design is a transformative modality and can used to transform
society and the lives of ordinary people. “There is a hunger for an authentic
story which comes from your soil,” said Reesberg.
When taking
wine tourism to the next level, focus on projects that offer tangible evidence
of transformative design and that is uniquely South African. “Your African ideas
will speak to the rest of the world, bridging the divide,” explained Reesberg.
Wine Industry Strategic Exercise – Rico Basson
The South
African wine industry is in the process of crafting a new industry roadmap,
aiming to ensure an adaptable, robust, globally competitive and profitable
industry.
VinPro MD,
Rico Basson, gave an update of the progress made in the Wine Industry Strategic
Exercise (Wise), following the announcement of its initiation at the 2014
Nedbank VinPro Information Day. Transformation, land reform and skills
development; market development and promotion; a social compact to improve
collaboration between government, producers and labour; and information and
technology transfer are the key projected outcomes of the process.
Basson provided
“2025 ideal future” targets for some of the pertinent Wise drivers. He said
that the wine and brandy industry will need to make a fundamental shift from
being production driven to being market and value driven. While the majority of
South African wine is currently being exported in bulk, Basson said that more
than 60% of exports should be packaged.
As part of the
market development drive, Basson emphasised that promoting local, responsible
consumption of wine is a priority. Local per capita consumption needs to
increase from 6 litres per capita currently – the lowest of all wine producing
regions – to 9 litres in 2025. This will create a market for more than 120
million litres. Globally, South Africa’s
market share in the growing US, Chinese and African markets is expected to
increase.
Agreeing with
Minister Winde, Basson stressed that wine tourism holds enormous potential for
job creation, with the proposed income generated from this industry expected to
grow from R6 billion to R15 billion in 2025.
Successful
transformation and land reform are key priorities for the industry’s strategic
plan. In this regard VinPro has committed R50 million to initiate (and
coordinate) various transformation initiatives on district level.
Basson said
that the industry has the potential to provide 100 000 more jobs
throughout the value-chain by 2025. The ideal future target for black-owned
land and water is 20%, currently at 1.5%. He said that by 2025 all South
African wine should have an ethical accreditation.
According to
Basson an open process, entailing consultation with key stakeholders and
industry participation, is crucial to the implementation and eventual success
of the plan, encouraging delegates to visit www.wisewine.co.za
to give input or obtain more information. “Creativity, courage and a can do
approach all constitute to South Africa’s winning hand,” concluded Basson.
Nedbank’s
commitment to Cape Wine Industry – Daneel Rossouw, Divisional Head: Agriculture
Nedbank Limited
Nedbank
has been sponsoring the Nedbank VinPro Information Day since 2007, to provide small,
medium and large enterprises with networking opportunities and cutting edge
industry insights from local and global leading experts. The bank’s support of
this initiative has helped the VinPro Information Day to grow significantly
over the past eight years. “More importantly, it continues to create awareness
and an opportunity to transform the industry allowing for aspirant winemakers and
wine grape producers from previously disadvantaged communities to participate
in the wine industry value chain,” said Rossouw
The
South African wine industry, including the growing wine tourism sector, is
responsible for total employment of 275 000 people – which is key to supporting
government’s efforts in job creation. Rossouw adds that this year, 30 students
from previously disadvantaged communities and a number of BEE projects attended
the event, boosting the industry’s skills development drive.
“As a
bank for all including small businesses, we recognise the significance of this
industry and it is for this reason that Nedbank continues to partner with
small, medium and large enterprises for growth. We believe our partnership will
go a long way in contributing to sustainable social and economic and development
for the advancement of all in South Africa.”
Download the
presentations from www.vinpro.co.za.
For enquiries
contact Lee-Anne Davidson, tel (021) 276 4060, e-mail leeanne@vinpro.co.za.