Confidence was a recurring concept at the Vinpro wine industry information day. Then followed a confidence-boosting week with decisive action and wise words by the man of the moment, Cyril Ramaphosa. What can the South African wine industry gain from these lessons in confidence?
The importance of investor confidence is familiar to anyone keeping an eye on the volatile South African economy. Never was it more clear than when we were amidst the drama of firing and hiring finance ministers some time ago. While the economy and Rand have been under pressure for a while, it was the loss of confidence in leadership and economic savvy that really resulted in investor doubt.
Confidence does not only depend on the measurables. As soon as Cyril Ramaphosa was elected as the new leader of the ANC (closely contested as it was), it seemed that there was hope for South Africa. And the markets agreed. Whether Ramaphosa holds the answer to all our challenges remains to be seen, but his confidence is surely catching. Applauding him for tackling Eskom, it is his performance at Davos that might again stimulate investor confidence in South Africa. Biznews.com reports: “Ramaphosa captured the hearts and minds of the jam-packed gathering, inspiring 130 or so guests with a 35 minute off-script talk outlining his plan to return confidence – and investors – to SA. It’s the message he has shared in private meetings with dozens of power mongers assembled in Davos. My guest, a top London banker, shared: “This new president of yours is a class act.” Quite. – Alec Hogg”
So how does confidence relate to the wine industry?
Wine as an industry requires South Africa to have credible and responsible leadership as well as certainty when it comes to political and policy issues to ensure investor confidence. This was the message of Nedbank Economist Isaac Matshego at the Vinpro day. The result of such confidence is a stable banking system and macro-economic growth, both fundamental to a positive business environment. Vinpro CEO Rico Basson concluded that business confidence is the “cheapest form of economic stimulus”.
To thrive, the wine business, like any other, requires a stable environment and healthy economy. But other than the bigger economic picture, the South African wine industry has quite a few unique challenges. Although not everyone agrees on what they are or what the possible solutions could be, it would, for one, be ignorant to not acknowledge the rough terrain for agriculture and land ownership in South Africa. Being part of the global industry, SA wine is also affected by what happens in other wine producing countries and wine being an export product, the global economy and the performance of our own currency are issues we cannot ignore.
How much vines we plant, how we brand the wine and how we market it, are all contentious issues often debated by passionate thought-leaders in the industry. One thing we can agree on, however, is the importance of confidence. And confidence in this instance, means more than only in the field of business. Other than making the wine industry a more reliable place economically, we also need to be confident with who we are as South African wine producers. I agree with Mike Ratcliffe that the South African wine industry has earned the right to be confident. Not claiming we are perfect or all in agreement or not in a crisis with regards to the current drought, for instance, but just confident that we have a coveted product and that we can make it work.
Confidence also implies the absence of insecurity, meaning to not feel threatened, to accept guidance and to work together in ensuring that as an industry, we are informed and responsible. In the words of Emile Joubert, SA wine might come to the understanding that “the commercial importance is as fundamental as the agricultural nature thereof”. It is only when confident about our product as well as our knowledge of the industry and market, that producers will be able to really take responsibility for what happens to their own brands and for their contribution to the image of South African wine.