A rollercoaster ride for SA wine in 2020 – the topic of my blog on 24 January last year. The caption proved to be right on the money. Almost two years later, after more tribulation than what we could ever imagine, what awaits SA wine?
Before Covid, the economy and policy uncertainty were cause for concern even though quality and volume expectations were better. With the pandemic putting tourism in a coma and the liquor bans creating havoc both in our bank accounts and cellars, the challenges since March 2020 prevented significant progress. So when the wine industry gathers to discuss its current state, what do we say to each other? What are our new plans when it comes to volumes, cultivars, legislation, social responsibility, sustainability, tourism, etc.?
SA wine needs a holistic approach – something that was on the carts since the introduction of WISE in 2015, but our recent challenges have been a brutal reminder of how important this is. What does it mean when our industry has to institute legal action against the SA Government, the dreaded surplus word re-enters our wine vocabulary and tourism is predicted to only recover by 2023?! Should we try to bounce back to what we were? I don’t think there is any going back to the way things were, we need to find new solutions. In Rico Basson’s words, we have to “bounce forward”.
When we are talking exports and opening doors with Chenin Blanc and Pinotage, we also need to consider production volumes and margins. When we comply with accreditations, are we using it sufficiently in our marketing and, more importantly, are we sure that our status is really making a difference? Is it worthwhile to keep on making plans when there is a lack of political will to negotiate trade agreements with our BRICS partners? Can we survive locally when wine’s economic contribution and job creation ability is written off against possible harm and health hazards such as binge drinking, violence and road safety? All of this sounds really negative, but much of what we are facing are challenges globally. We might have a few extra curve balls, but we are resilient and we can claim excellence when it comes to sustainability, diversity, traceability…
Here are some of the focus areas for SA wine:
According to SAWIS figures, we’ve done well at working away the surplus left in cellars, but we are not out of the woods with 59.7 million litres of uncontracted bulk wine still in stock. While I support a focus on premium bottled exports, it does make sense to renegotiate trade agreements to allow for those bulk volumes to be shifted. Yvette van der Merwe indicated that although we’ve already lost 10 000 hectares of vineyard over the past couple of years, it has not had a significant impact on production – we still have record harvests. For prices to stabilise, volumes have to be managed.
For SA Wine to not only survive, but to thrive, WOSA’s Siobhan Thompson says our global strategy has to focus on premium quality, but also on what it is that makes us exciting and distinctive. If trade agreements with China are not on the table, then we also have to focus elsewhere. Marketing is important, but of course we have to ensure that we have the product to back it up. Focusing on holistic vineyard conditions, Conrad Schutte emphasised the importance of a carbon footprint and the role of site selection, soil preparation and drought tolerant varieties when it comes to addressing climate change.
When international travel came to a halt, we had to rely on local tourism. This focus on cultivating a loyal and growing local market remains important. According to Marisah Nieuwoudt, it is only in 2023 that we can expect a return to 2019’s R7.2 billion tourism contribution to the GDP. While tourism has been impacted globally, with 1 in 10 wineries unable to reinvest in tourism, in South Africa, this figure is 1 in 5. The wine tourism worker stipend did, however, support most workers and wineries and we can look forward to exciting new initiatives. The development of tourism goes hand in hand with skills and a well-considered training and development plan kicks off in December this year. Involved with tourism and training on many levels, this prospect gets me excited. Just as with the Transformation Plan and focus on people development, it is about results and return on investment. Being able to not only give bursaries, but to walk the whole way to employment and to enable people from the community to make a contribution in their place of work.
I think these 12 points by Christo Conradie do well in summarising what a holistic approach to success in SA wine should look like:
- Owners have to be involved
- There has to be a strategic vision that leads to action
- Balance is crucial – get the job done but also manage the spreadsheets
- Stay informed about the industry
- Embrace technology
- Understand the market
- Spend time in the market
- Spot gaps and opportunities (this will happen when you are not removed from the market)
- Focus on proper yields without compromising quality and get the cultivar mix right
- Monitoring and record-keeping are essential
- Keep stakeholders responsible by asking the tough questions
- Be assertive and act swiftly!