Wine exports break new records

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Workers in the vineyard of the Bovlei
wine estate.
(Image: South African Tourism)

The exhibition floor at the 2007 Soweto
Wine Festival.
(Image: Soweto Wine Festival)

Wine lovers all over the world enjoy the
fruits of South Africa’s wine industry.
(Image: Durbanville Wine Valley)

The headquarters of the Wine and Spirit
Board in Stellenbosch. The board is
responsible for granting export licences
to wine producers. (Image: Wineland)

Janine Erasmus

Wine lovers from Angola to Scandinavia are topping up their glasses with South African wines as exports of local products continue to break records in markets worldwide.

Figures from the South African Wine Industry Statistics (SAWIS) show that in the last 15 years exports have risen from a modest 22-million litres in 1992 to almost 314-million litres in 2007. Sales figures for the first quarter of 2008 show an increase of 35% compared to the same period last year. By comparison, the local market is growing at around 5% per year, says Wines of South Africa (WOSA), whose mandate is to promote international sales of South African wines

And, for the first time ever in the history of winemaking in South Africa, exports of wine have outstripped domestic sales in terms of volume. Local sales between January 2007 and January 2008 came in at 314,5 million litres, but a hefty 316,8 million litres left the country for overseas climes.

WOSA CEO Su Birch, who comes from a marketing background, attributes the buoyant sales figures to increased growing demand in Scandinavia, Germany, North America and Africa. South Africa has also taken advantage of opportunities created by the drought and resultant production decrease in Australia, a long-time rival, as well as reduced output in France and Italy because of lower harvest yield.

Recent news indicates, however, that Australian wines are proving quite resilient to the effects of the drought and production is expected to rise by 19% in 2008 although it will still fall well short of the record volumes achieved in 2004/2005.

Birch also names Angola as a new and fast-growing market for South African red wine. The traditional source of red wine in Angola is its former colonial master Portugal, but in recent years South African reds have benefited from the country’s proximity to Angola, because it simply is cheaper to import from South Africa.

Germany a growing market for SA wines

Germany is traditionally known as a thirsty beer market, but recent figures released by the Bonn-based Deutscher Weinbauverband e.V. – the German Winegrowers’ Association, the professional organisation of German winegrowers – show that the demand for wine is increasing.

With a market share gain of 11,2% from February 2007 to February 2008 South Africa now ranks as the fourth-biggest supplier in terms of value, behind the powerful trio of Italy, France and Spain. In terms of export volume Germany comes in just behind Chile, but the value of South African exports to the latter country stands at 3,1% of the total compared to 3,3% to Germany.

According to a May 2008 report in UK wine and spirit magazine Harpers, 2007 beer sales in Germany fell to their lowest levels since 1993, while wine sales have increased by 11,1% in the last five years. Reasons are cited as German wine’s growing international reputation, increasingly health-conscious drinkers and high unemployment.

The Cape Wine trade show

South Africa is preparing for an influx of wine lovers from all over the world for the 2008 Cape Wine trade show, which this year takes place towards the end of September at the Cape Town International Convention Centre. Sandwiched neatly between the prestigious Nederburg Auction and the Nedbank Cape Winemakers’ Guild Auction, the timing of the trade show now means that interested visitors can attend all three events.

According to WOSA, which is based in Stellenbosch, Western Cape, and is headed by Dr Paul Cluver, one of South Africa’s most respected winemakers, the event used to take place in April but has now moved to later in the year to eliminate clashes with European wine trade shows. This means that overseas visitors don’t have to make any difficult travel choices, and also means that the wine farmers can exhibit current vintages as opposed to those from the previous year.

More than 300 wine producers are expected, with over 4 000 wines on display. Floor space has increased by 25% in order to accommodate all the exhibitors, while already bookings have been received from buyers all around the world, not only from the UK, Europe and North America but also from Brazil, Russia, India, China and Korea, and other countries in Latin America and Asia.

South Africa’s wine industry

Grapes have been cultivated in South Africa since 1655. In this year Jan van Riebeeck, the first governor of the Cape, planted a small vineyard which bore fruit for the first time in 1669. These were the very early days of the now-renowned Cape wine region. Van Riebeeck’s successor, Simon van der Stel, planted vines on his farm Constantia, and wines from this estate are to this day numbered among the world’s finest.

The arrival of the French Huguenots in the late 17th century signalled a boost for the fledgling wine industry. The immigrants brought their established winemaking techniques with them, although these had to be adapted to local conditions.

Some 350 years later, the wine industry continues to grow. Figures released in 2006 put the total land area of South Africa’s vineyards at 102 146 hectares, with an additional 24 273 hectares of land used for cultivation of sultanas, currants and other related varieties. The country produces 3.1% of the world’s wine, says WOSA, and more than 1,3-million tons of grapes in total were crushed in 2006.

In terms of volume production South Africa is the ninth most prolific in the world – here France leads the pack with 19,2% of the world total, second is Italy with 17,8%, and third is Spain with 14,4%.

Almost 5 000 wine farmers are currently active in the local industry. Most estates are concentrated in the Western Cape, one of the world’s great wine-growing regions and site of the famous wine route, much patronised by tourists and locals alike.

Transformation in the industry

The total labour force on farms and related industries, such as wine tourism, numbers around 260 000 and of this some 100 000 people from disadvantaged groups are employed in winemaking. While labour on wine farms was traditionally drawn from disadvantaged communities, a growing number of these people are today becoming winemakers themselves. Transformation in the industry is happening through new bodies such as the South African Black Vintners’ Alliance, which was formed in 2005.

Empowerment and transformation projects and black-owned wineries are giving a new face to the wine industry. Among them are LaThiTha Wines (from the Xhosa “lalitha ilanga” which means “sunrise”), Thabani (Nguni, meaning “joyful”), House of Lindiwe (Zulu, meaning “the one we have been waiting for”), Women in Wine, and many others.

Events such as the Soweto Wine Festival, in its fourth year in 2008, are providing a platform for wine farmers to expose their products to the rapidly growing black middle class as well as other stakeholders such as restaurant owners, high-end shebeen owners, spaza shops and corner-shop owners, and consumers. Shebeens are (usually) unlicensed drinking establishments, while spaza shops are small informal shops that sell consumer goods and usually operate from a residential property.

A leader in global wine standards

The Nietvoorbij Institute for Viticulture and Oenology is backed by the Agricultural Research Council. Situated in Stellenbosch, this institute amalgamated in 1997 with the council’s Stellenbosch Institute for Fruit and Fruit Technology and is now recognised as a world leader in wine research, employing what is considered to be one of the most modern experimental wineries in the world.

Before a wine can leave South African shores it must obtain an export licence. Samples of export wines are sent to the Wine and Spirit Board at Nietvoorbij. Here they are tested thoroughly to ensure that they meet the rigorous standards demanded by overseas wine consumers. According to online wine portal Wineland, final rejection figures amount to only 0,27% of all wines submitted. Wines may be submitted up to five times. The most common reason for rejection is an insufficient cultivar character and a thin, watery character, says the board.

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