South African Wine Industry is on the Upswing Again

South African wine exports are back on the rise after a brief decline. It turns out that exports are higher than the same period last year, and the growth rate will continue through 2007.

Wines of South Africa News reports Nielsen figures for the twelve months to June 2007 showed that the average retail price per 750ml bottle had risen to £3.91. Large UK wine retailers are reporting higher than average growth numbers in the volume of South African wine sold in 2007.

According to Su Birch, CEO of Wines of South Africa, the South African rosé variety is the fastest growing in UK wine retail. South Africa's biggest export brand, Kumala, can still boast its top 10 retail brands status. Other wine brands like FirstCape, Namaqua, Pearly Bay, Robert's Rock, Spier, Stormhoek, Douglas Green, Nederburg, Beyerskloof and Boschendal are all showing a healthy growth spurt. South African wine exports to other vital markets such as Sweden, Denmark and North America were also on the rise.

Although growth in the South African wine industry is on a strong upswing, the South African wine industry still faces many challenges. South African wine producers have little collaboration. Unlike Napa Valley and Sonoma, wine producers in South Africa rarely get together to share ideas and voice opinions. Secrecy limits the industry's growth and effectiveness. In addition, South African winemakers are not responsive to the conservation of indigenous vegetation that shares their land, which is in contrast to Californian wine growers who have gone green. Most importantly, as reported on News 24's "Black People Prefer Beer", industry experts are trying to change the drinking habits of South Africa's black clientele who are more inclined to drink beer and brandy. Today, there is only 1.5 percent of black winemakers, a small growth rate from a population that was once given no opportunity to own much of anything, let alone a vineyard, during the apartheid era. Soweto is the newest area of South Africa where the buzz to change the drinking ways of black South Africans has begun.

South African wine growers face challenges not just at home, but overseas. According to the Web site SouthAfrica.info, the kind of challenges that South African wine producers face in the UK and in other wine markets abroad are slow growth in overall value and a surplus of wines from California and Australia. Competition remains strong in the wine industry. South African wine producers should analyze their competitive position in these markets and growth opportunities in restaurants and retail, not just in the United Kingdom, but around the world.

South Africa is the world's ninth biggest wine-producer and accounts for 3.3 percent of the global market.

Sources: www.wosa.co.za, News 24 (news24.com), SouthAfrica.info